Yugsi Morocho v. VIP Nail Salon Inc.

Background

Blanca Etelbia Yugsi Morocho brought this wage-and-hour case under the Fair Labor Standards Act (FLSA) against VIP Nail Salon Inc. doing business as “VIP Nails,” Joo In Oh, also known as “Domina,” Hye Sook Oh, and Jane Doe, also known as “Clara.” The parties consented to Magistrate Judge Sarah L. Cave’s jurisdiction to review their proposed settlement.

Earlier Settlement Review

On August 8, 2020, the court denied approval of the original settlement agreement because it contained an overly broad release and a typographical error concerning the payee of part of the settlement amount. The court found that the agreement was fair and reasonable apart from those two provisions.

Amended Agreement

The parties submitted an amended agreement correcting the release and payee provisions. The amended agreement contained a more limited mutual release and corrected the payee information. The court reviewed the amended agreement under Cheeks v. Freeport Pancake House, Inc., which governs judicial review of FLSA settlements in the Second Circuit.

Ruling

The court stated that FLSA settlements are generally subject to a strong presumption of fairness and considered financial difficulties that some defendants might face if the settlement were not completed. Judge Sarah L. Cave found that the terms of the amended agreement, including the allocation of attorneys’ fees and costs, appeared fair and reasonable. The opinion text does not separately state in express terms that the amended agreement was approved after making that finding.