Flores Hernandez v. Village Natural Restaurant Corp.

Background

Martin Flores Hernandez sued Village Natural Restaurant Corp. (doing business as Village Natural), Lai Thuy Quach, and Larry Chuy for alleged violations of the Fair Labor Standards Act, New York Labor Law, and orders issued by the New York Commissioner of Labor. The parties asked the court to approve a settlement agreement.

Court’s analysis

The court explained that private settlements of Fair Labor Standards Act claims requiring dismissal with prejudice must be approved by the district court or the Department of Labor. The court therefore considered whether the agreement was fair and reasonable, including the plaintiff’s possible recovery, the burdens and expenses of continued litigation, the parties’ litigation risks, whether the agreement resulted from arm’s-length bargaining between experienced counsel, and whether fraud or collusion was possible.

The court found that the settlement amount for the plaintiff was fair and reasonable. Although the plaintiff alleged a maximum possible recovery of $331,338, the case was at an early stage, the factual issues were sharply contested, and the defendants had produced employment records contradicting the plaintiff’s claims. The court also considered the risks and delays of trial and information that the COVID-19 pandemic had significantly reduced the viability of the defendants’ business, which could have made collection of a larger judgment more difficult. The agreement appeared to result from arm’s-length bargaining, and the court found no evidence of fraud or collusion.

The court rejected the proposed $20,000 payment to the plaintiff’s attorneys for fees and costs. It found Michael Faillace’s proposed hourly rate of $450 unreasonable and reduced it to $400. It reduced Jesse Barton’s proposed hourly rate from $375 to $275. Using those rates, the court calculated a lodestar—the reasonable hourly rates multiplied by the reasonable hours worked—of $4,867.50. Applying a multiplier of three produced $14,602.50 in attorney’s fees. Adding $400 in documented costs resulted in total fees and costs of $15,002.50.

Disposition

The court granted the parties’ request for approval of the settlement, subject to reducing attorney’s fees and costs from $20,000 to $15,002.50 and increasing the plaintiff’s award from $40,000 to $44,997.50. The court directed the Clerk of Court to close the case.