Smith v. BRP Development Corporation

Background

The parties submitted a joint request for approval of a fully executed settlement agreement under Cheeks v. Freeport Pancake House, Inc. The agreement resolved Rashiem Smith’s claims under the Fair Labor Standards Act (FLSA) and the New York Labor Law (NYLL) against BRP Development Corporation, United DBT Security Corp., and Darrul Brown.

The parties stated that they reached the agreement through arms-length bargaining before a neutral mediator. The total settlement was $17,500. Of that amount, $7,800 would go to Smith in full settlement of his claims, and $9,700 would go to his counsel, Abdul Hassan, consisting of $9,030 in fees and $670 in expenses. The parties represented that Smith’s payment was more than 100% of his estimated actual damages, excluding liquidated damages, if he prevailed on all issues at trial.

Settlement Terms

The agreement had no confidentiality provision or other restriction on the parties’ ability to discuss the case or settlement. The defendants released Smith from claims they might have against him as of the agreement’s execution. Smith released the defendants from claims connected with his employment as of that date. The court found that the releases favored Smith because his release was narrower than the release he received, and therefore found no fairness problem.

The court also reviewed the fee request. Hassan’s retainer agreement allowed a fee based on the greater of a percentage, an hourly calculation, or a separately recovered fee award. Although the stated hourly rate was $600, counsel reduced it to $500 for the settlement. The resulting lodestar—the hourly rate multiplied by the hours worked—was $15,321.67, but counsel reduced the requested fee to $9,030 to facilitate settlement. Based on 30.64 hours of work, the effective hourly rate was $294.71. The court found the fee reasonable in light of the retainer and the reductions.

The requested expenses totaled $670. Counsel provided receipts for the $400 filing fee and $270 in service fees. The court noted inconsistencies between the agreement and the parties’ letters about the division of fees and expenses, treated those inconsistencies as clerical errors, and approved the figures in the agreement because they totaled $17,500.

Ruling

Judge Barbara Moses found that the settlement terms were fair and reasonable under the required judicial review. The court APPROVED the proposed settlement, with $7,800 going to Smith and $9,700 going to his counsel for fees and expenses.

The court ORDERED that the action be DISMISSED with prejudice and without costs. It also directed the Clerk of Court to close the case.