Perez v. Sixth Avenue Restaurant Management LLC

Background

Maria Perez sued Sixth Avenue Restaurant Management LLC, Peak Management Services, LLC, LT Hospital Management, and Laurent Tourondel. She alleged that she worked as a food preparer for the defendants from July 2017 through September 2018. Her allegations included working more than 40 hours per week without receiving overtime pay because of a time-shaving policy, receiving improper wage statements, age discrimination and harassment, denial of a request for leave under the Family and Medical Leave Act, and constructive termination. The amended complaint asserted claims under the Fair Labor Standards Act (FLSA), the Family and Medical Leave Act, New York labor and human-rights laws, and the New York City Human Rights Law and Administrative Code.

The defendants moved to dismiss some claims from the original and amended complaints. The parties later submitted a proposed settlement of the FLSA claims for court approval. They had separately settled the non-wage-and-hour claims and stipulated to their voluntary dismissal. The parties also submitted a revised settlement agreement without a nondisclosure provision.

Settlement Review

Under the governing appellate precedent, an FLSA settlement that dismisses claims with prejudice requires approval by the court or the Department of Labor. The court evaluated whether the agreement was fair and reasonable by considering the possible recovery, the burdens and expenses of continued litigation, the parties’ litigation risks, whether the agreement resulted from arm’s-length negotiations by experienced counsel, and any possibility of fraud or collusion.

Perez estimated that her maximum recovery on the wage-and-hour claims was approximately $6,238.50. The proposed settlement totaled $12,500, including $8,000 for Perez and $4,500 for attorneys’ fees and costs. The court found the amount reasonable in light of the risks and factual disputes. It also found that the agreement resulted from arm’s-length negotiations, that the parties had exchanged relevant information, and that the record showed no fraud, collusion, or coercion.

The release was limited to claims based on Perez’s employment with the defendants. The agreement contained no confidentiality or non-disparagement provision. The court also found the $4,500 fee and cost award reasonable. Counsel had recorded $26,680 in fees and costs for 66.7 hours of work, including preparing the complaints, conducting discovery, opposing the partial dismissal motion, and filing a motion to certify a collective action.

Ruling

Judge Ona T. Wang approved the parties’ proposed settlement agreement as fair and reasonable. The court ordered that the action be dismissed with prejudice without costs and directed the clerk to close all open motions. The opinion approves the settlement; it does not decide whether the defendants actually violated the FLSA or the other laws alleged in the complaint.