Polanco v. Marjan International Corp.

Background

Julio Cesar Polanco and Manuel Elias Cruz brought claims against Marjan International Corp. and Morad Ghadamian under the Fair Labor Standards Act (FLSA) and the New York Labor Law (NYLL). The court considered the parties’ proposed settlement agreement and their fairness letter.

Settlement Terms

The defendants agreed to pay a total of $60,000 in exchange for releasing the plaintiffs’ wage-and-hour claims. After attorneys’ fees, Polanco would receive $23,000 and Cruz would receive $16,500 in damages. The court noted that these amounts were lower than the plaintiffs’ estimated best-case recoveries of $45,000 and $21,000, respectively, but found the settlement reasonable because of the risks of trial.

The court approved $20,500 in attorneys’ fees and costs for plaintiffs’ counsel. It found that this amount was approximately one-third of the settlement and reasonable under the percentage-of-the-fund method.

The court also approved the release. It was limited to wage-and-hour claims under the FLSA and NYLL arising from the plaintiffs’ prior employment by the defendants, including claims for unpaid wages, minimum wages, overtime, spread-of-hours premiums, liquidated damages, and related penalties. The release did not cover all past or future claims against the defendants.

Ruling

Judge Ronnie Abrams approved the settlement agreement. The court retained jurisdiction for the limited purpose of enforcing the agreement. It dismissed the action with prejudice and directed the Clerk of Court to close the case.