De Jesus Prudente v. Brother's Bakery Cafe Corp.

Background

Adan de Jesus Prudente brought claims against Brother’s Bakery Café Corp., Antonio Salinas, and Oscar Salinas under the Fair Labor Standards Act (FLSA) and the New York Labor Law. After the parties negotiated through the Southern District of New York’s mediation program, they reached an agreement to resolve the case and jointly moved for approval.

Settlement review

The court explained that federal district courts must independently review FLSA settlements for fairness and reasonableness. It considered the circumstances identified in prior decisions, including Prudente’s possible recovery, the litigation burdens and expenses the settlement would avoid, the risks of continuing the case, the parties’ arm’s-length negotiations through counsel, and the possibility of fraud or collusion.

Settlement amount

The agreement requires the defendants to pay Prudente a total of $12,500. The parties stated that Prudente’s possible recovery could be approximately $50,000, but the defendants disputed the factual bases for his claims. The court noted that recovery through continued litigation would depend in part on Prudente showing that the defendants’ time records and wage statements were inaccurate. Because of 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 and costs

The agreement provides $3,929.73 in attorney’s fees and $710.80 in costs for Prudente’s counsel, totaling $4,640.53. The court reviewed counsel’s contemporaneous time records and independently determined that the requested fees were reasonable. It also noted that the fee amount was one-third of the settlement after litigation costs were subtracted, a percentage courts regularly approve in FLSA cases.

Release and non-disparagement provisions

The court approved the release because it was limited to claims in the action and labor claims, including claims under the FLSA, the New York Labor Law, and other wage-and-hour regulations. It did not release unrelated claims.

The agreement did not include a confidentiality provision. It did include a non-disparagement clause, but that clause allowed the parties to truthfully communicate their experiences concerning the action or settlement. The court found that this carve-out made the non-disparagement provision fair and reasonable.

Disposition

The court approved the settlement agreement and dismissed the action with prejudice in accordance with that agreement. It directed the Clerk of Court to terminate the motion at Docket 18 and close the case. The court also stated that the parties could notify it by May 26, 2021, if they disagreed with the assumption that no further referral to a magistrate judge was needed.