Alt v. Social Impact 360, Inc.

Background

Allison Alt sued Social Impact 360, Inc. and Thomas Raffa on claims under the Fair Labor Standards Act (FLSA), New York Labor Law, and an employment contract. The parties first submitted a settlement for approval. On November 9, 2020, the Court declined to approve that agreement without prejudice because it included an overly broad release, an impermissible non-disparagement clause, no stated allocation for Alt’s wage-and-hour claims or attorney’s fees, and insufficient support for the requested fees.

The parties then submitted a revised settlement agreement and an amended supporting motion. The revised agreement stated that Alt’s general release was consideration for resolving her non-wage-and-hour claims. It also allowed Alt to make truthful statements about her experience with her wage-and-hour claims, specified that $35,038.54 was allocated to those claims, identified a proposed attorney’s-fee award of $11,259.67, and included documentation supporting that fee request.

Court’s Analysis

The Court independently reviewed whether the settlement was fair and reasonable. The parties agreed that the $35,038.54 allocated to Alt’s wage-and-hour claims represented the total back pay at issue. The Court therefore found that allocation fair and reasonable.

The Court also found the attorney’s-fee allocation fair and reasonable. The requested $11,259.67 represented 25% of the net recovery for all claims and 24% of the fee award plus the amount allocated to the wage-and-hour claims. Although counsel reported 83 hours of work and hourly rates of $650 and $450, the Court noted that the hours were high for the early stage of the case and that the rates exceeded the usual range identified for experienced wage-and-hour litigators. The Court did not need to decide whether those figures were reasonable because even a calculation using 30 hours at $250 per hour would produce a $7,500 lodestar—the reasonable hourly rate multiplied by the reasonable hours—and the proposed fee would still be reasonable under that comparison.

Disposition

The Court held that the revised agreement otherwise represented a fair and reasonable settlement. Judge Edgardo Ramos granted the parties’ request for approval of the revised agreement and directed the Clerk of Court to close the case.