Flores Galloso v. 3821 Food Corp.

Background

Jesus Flores Galloso sued 3821 Food Corp., doing business as Super Foodtown of Washington Heights, under the Fair Labor Standards Act (FLSA) and the New York Labor Law (NYLL). The complaint also named 3821 Broadway LLC, 3821 Broadway Café LLC, and Tasa Wholley, but the motion stated that those defendants were improperly named and that all claims against them would be withdrawn. The settlement agreement submitted for approval was between Flores Galloso and 3821 Food Corp.

The parties reached the agreement after arm’s-length negotiations through the Southern District of New York’s mediation program. The court explained that federal district courts must independently review FLSA settlements to determine whether they are fair and reasonable.

Settlement Amount

Under the agreement, 3821 Food Corp. would pay Flores Galloso a total of $25,000. One-third of that amount, $8,333.33, was reserved for attorney’s fees. Flores Galloso estimated that his possible recovery could reach $55,000, but stated that recovering that amount depended on corroborating his disputed allegation that he was required to work after punching out. The court noted that corroboration could be difficult because of the employer’s records and witnesses who would oppose his account.

Considering the legal and evidentiary challenges and the uncertainty of recovering damages if the case continued, the court found the settlement amount fair and reasonable.

Attorney’s Fees

The court reviewed counsel’s contemporaneous time records and independently evaluated the requested attorney’s fees. It approved the proposed $8,333.33 in attorney’s fees and costs, concluding that one-third of the total settlement was a reasonable percentage of the recovery in this FLSA case.

Release and Other Terms

The court approved the agreement’s release provisions because they were limited to claims asserted in the action, claims concerning alleged unpaid wages and compensation from Flores Galloso’s employment with 3821 Food Corp., and claims that could have been asserted under the FLSA and NYLL. The court found that the release was limited to the wage-and-hour issues in the case or related claims that could have been asserted.

The agreement did not contain confidentiality or non-disparagement provisions. The court noted that such provisions require careful review in FLSA settlements but did not identify any problem with their absence.

Disposition

Judge Ronnie Abrams approved the agreement and dismissed the action with prejudice in accordance with the Settlement Agreement. The court directed the Clerk of Court to terminate the motion at Docket 22 and close the case.