Gonzalez Basurto v. 3 East 48th Rest. Inc.

Background

The plaintiff alleged that the defendants failed to pay required overtime wages and other amounts. The claims arose under the Fair Labor Standards Act, a federal wage law; the New York Minimum Wage Act; and New York Labor Law provisions concerning annual wage notices and wage statements. The plaintiff sought unpaid wages, additional damages, interest, attorney’s fees, and costs. The defendants denied and continued to deny the allegations.

Settlement Proposal

The parties reached an agreement after mediation. The plaintiff estimated approximately $22,317 in back wages and approximately $84,815.13 in total damages, including liquidated damages, interest, spread-of-hours damages, wage-notice and wage-statement damages, and tools-of-trade claims, as his best-case scenario.

The defendants asserted that the plaintiff was paid in full. They stated that he worked as a dishwasher and also performed general cleaning and similar duties; that he was paid above minimum wage, received overtime at one and one-half times his regular rate, and received a weekly cash bonus for additional duties. The defendants also stated that some earlier payment records had been destroyed in a restaurant flood, while later records showed payments for all hours worked and signed paystubs. They further contended that the business had permanently closed because of COVID-19 and that the plaintiff might not be able to establish that the individual defendants qualified as employers under the federal and New York wage laws.

To avoid the factual and legal risks of continuing the litigation, the parties agreed to settle the claims for $29,500. The proposed payment to plaintiff’s counsel was $10,543.33, consisting of attorney’s fees and costs. The submission stated that counsel’s lodestar—the amount produced by multiplying reasonable hourly rates by reasonable hours—was $6,140.

Court’s Analysis

The court reviewed the proposed settlement under decisions requiring judicial review of Fair Labor Standards Act settlements. It found that the agreement was fair. The court also found the attorney-fee amount reasonable because it was calculated using a percentage method and represented one third of the total settlement amount.

The court expressly stated that it was not making any finding about whether counsel’s hourly rates were reasonable or whether any particular hours billed were reasonable.

Disposition

The court approved the settlement and dismissed the case with prejudice, meaning the case was closed in a manner that barred refiling the dismissed claims. At the parties’ joint request, the court retained jurisdiction to enforce the settlement. The Clerk of Court was directed to terminate all pending motions, adjourn remaining dates, and close the case.