Zavala Artiega v. Griffin Organics, Inc.

Background

Mauricio E. Zavala Artiega brought claims against Griffin Organics, Inc., Griffin’s Landscaping Corp., Hilltop Nursery and Garden Center, Inc., and Glen Griffin under the Fair Labor Standards Act (FLSA) and the New York Labor Law. He alleged that the defendants failed to pay overtime wages and failed to provide required wage-and-hour notices and wage statements. The complaint was filed on behalf of Zavala Artiega, proposed collective plaintiffs, and a proposed class, but no collective or class was ever approved. The settlement application before the court concerned only Zavala Artiega’s individual FLSA claims.

Settlement terms and review

The parties asked the court to approve their settlement under the Second Circuit’s requirement that a district court review private settlements of FLSA claims. The proposed individual settlement provided for a total payment of $15,000, with $10,000 going to Zavala Artiega and $5,000 going to his counsel for attorneys’ fees and costs. The parties’ term sheet stated that only the federal claims in this action would be dismissed with prejudice. The court stated that its review did not cover other potential claims involving Zavala Artiega or any other parties.

The court found the settlement fair and reasonable after considering the relevant factors. Zavala Artiega estimated that his best possible recovery for FLSA overtime wages was $36,109, while the defendants calculated that his overtime damages were $10,000. The court noted that the settlement amount paid directly to Zavala Artiega represented about 27.7 percent of his claimed maximum recovery and could represent a full recovery under the defendants’ calculation. The parties also faced the expense and burden of further discovery, motion practice, and trial, as well as risks concerning the time Zavala Artiega worked, the number of hours worked, and the rates he was paid.

The court found that the settlement resulted from arm’s-length negotiations during mediation between parties represented by experienced counsel and found no reason to suspect fraud or collusion. The court also concluded that the settlement would not adversely affect similarly situated employees because their claims were not released. The agreement contained no confidentiality or non-disparagement provision and included only a narrow release of Zavala Artiega’s FLSA claims. The court approved the $5,000 fee and cost allocation despite the absence of contemporaneous time records because counsel’s extensive work in the nearly five-year-old case made clear that the proposed fee was a small portion of the work’s likely value.

Ruling

Judge Andrew E. Krause approved the individual settlement of Zavala Artiega’s FLSA claims as fair and reasonable. The court directed the parties to submit, by May 26, 2021, a stipulation dismissing those FLSA claims with prejudice. It directed that Zavala Artiega’s counsel receive $5,000 in attorneys’ fees and costs and that Zavala Artiega receive the remaining $10,000. The court also directed the clerk to amend the caption because the action had never been certified as a collective or class action. The opinion stated that, if the parties intended to dismiss Zavala Artiega’s New York Labor Law claims without prejudice, that dismissal could also be included in the same filing, but the ruling itself approved only the individual FLSA settlement.