Fenton v. Criterion Worldwide
- Edgardo Ramos
- 1:18-cv-10224
- U.S. District Court · Southern District of New York
- 3
In Fenton v. Criterion Worldwide, Judge Ramos declined to approve the FLSA settlement without counsel’s billing records, allowing revised submission, abandonment, or dismissal without prejudice.
Siobhan Fenton, Criterion Worldwide, Lewis Morton, and Fenton’s counsel were affected by the court’s conditional nonapproval of the proposed settlement and the available next steps.
What happened
In Fenton v. Criterion Worldwide, Siobhan Fenton sued Criterion Worldwide and Lewis Morton over allegedly unpaid overtime and minimum wages, along with wage-notice and recordkeeping violations. The court had previously compelled arbitration and dismissed the claims against Criterion Worldwide.
Fenton and the remaining defendant asked the court to approve a settlement. Fenton estimated that her full recovery could be about $27,235.84, while the proposed net settlement was $7,500. The court found the amount fair and reasonable given disputes about the allegations and whether Fenton was an exempt employee. It also found the release and confidentiality terms acceptable.
Judge Ramos did not approve the settlement because the parties had not provided counsel’s billing records and hourly rates, which were needed to check whether the proposed attorney fee was reasonable. The parties could submit a revised agreement with those records, jointly state that they were abandoning the settlement, or stipulate to dismissal without prejudice.
The detailed version
- Fenton v. Criterion Worldwide · No. 1:18-cv-10224
- Edgardo Ramos
- Dec. 9, 2020
Background
Siobhan Fenton brought claims under the Fair Labor Standards Act (FLSA) and New York Labor Law against Criterion Worldwide and Lewis Morton. She alleged that she was not paid required overtime or minimum wages and that defendants violated New York wage-notice and recordkeeping requirements. On March 27, 2020, the Court granted defendants’ motion to compel arbitration and dismissed the claims against Criterion Worldwide.
The pending matter was the parties’ application for approval of their Settlement Agreement. Under Second Circuit law, parties cannot privately settle FLSA claims with prejudice without approval from the district court or the Department of Labor. The court therefore evaluated whether the agreement was fair and reasonable under the circumstances.
Settlement Amount and Attorney Fees
Fenton estimated that a full recovery on her claims could total approximately $27,235.84 in damages and penalties. The parties proposed a net settlement of $7,500. They identified factual disputes and defendants’ argument that Fenton was a non-exempt employee as litigation risks. The Court found the settlement amount fair and reasonable in light of those risks.
Fenton stated that she would receive $3,521.92 and her counsel would receive $2,354.62. The Court found the fee reasonable as a percentage of the settlement, but explained that courts also use the lodestar method as a cross-check. The lodestar is the reasonable hourly rate multiplied by the reasonable number of hours required for the case. The parties had not submitted counsel’s billing records or hourly rates, so the Court could not perform that cross-check.
Other Agreement Terms
The Court found the settlement agreement otherwise reasonable. It contained no objectionable confidentiality provisions, and the release covered only claims related to this case.
Ruling
Judge Edgardo Ramos stated that the Court would not approve the settlement unless the parties corrected the missing fee documentation. The parties could submit a revised agreement with counsel’s billing records by December 16, 2020; file a joint letter stating that they intended to abandon the settlement; or stipulate to dismissal of the case without prejudice, which the Court stated did not require approval under then-current Second Circuit law.
Read the full 3-page opinion on CourtListener, the free public archive maintained by the Free Law Project.