Shah v. 786 MS Corp.

Background

Sharyar Shah brought this action against 786 MS Corp., Ayaz Mukhadas, and Safaie Mostafa under the Fair Labor Standards Act and Article 19 of New York’s Labor Law. The parties initially moved for approval of a proposed settlement, but the court denied that request without prejudice because it lacked enough information to determine whether the settlement amount was fair and reasonable. The parties then submitted additional information about a revised settlement agreement.

Settlement Amount and Release

Under the revised agreement, the defendants agreed to pay $21,750.00. Shah would receive $13,938.54. The opinion states that Shah calculated his damages for unpaid overtime and payment below the minimum wage at $12,692.50, including liquidated damages. Because the payment to Shah exceeded that calculated amount by $1,246.04, the court found the settlement amount fair and reasonable.

The revised agreement included a release and covenant not to sue. The parties limited the release to claims related to conduct arising from the factual basis of the settled claims and limited the damages covered to the claims at issue in this action. The court concluded that the revised release was no longer too broad.

Attorney’s Fees and Disposition

Shah’s counsel sought one-third of the settlement amount in attorney’s fees and expenses. Counsel submitted billing records showing $33,644.40 in legal fees for 82.10 hours, plus $572.56 in expenses and court fees. The requested attorney’s fees totaled $7,811.46, which the opinion states was significantly less than the amount counsel billed. Judge Kenneth M. Karas found the request reasonable based on the submitted evidence and the practice of awarding one-third of the recovery in Fair Labor Standards Act settlements.

The court granted the parties’ motion for approval of the revised settlement agreement. The Clerk of Court was directed to close the case.