Dunbar v. 4399 Bronx Chicken LLC.
- Analisa Torres
- 1:20-cv-07884
- U.S. District Court · Southern District of New York
- 5
In Dunbar v. 4399 Bronx Chicken LLC., Judge Torres denied settlement approval and ordered the parties to file a revised agreement.
Krystal Dunbar, the defendants, and Dunbar’s counsel were affected because the court did not approve their proposed settlement and required a revised agreement. The court’s ruling also addressed confidentiality and non-disparagement terms in an FLSA settlement.
What happened
In Dunbar v. 4399 Bronx Chicken LLC., Krystal Dunbar sued the defendants over alleged unpaid minimum and overtime wages, retaliation, and other wage-related violations under federal and New York law. The parties reached a proposed settlement and asked the court to approve it.
The proposed agreement would pay Dunbar $16,067 and her lawyer $8,933 from a $25,000 settlement. Judge Torres found the settlement amount and release provision acceptable, and found the requested attorney’s fees and costs reasonable. But the agreement restricted Dunbar from discussing the settlement with the media and included a broad non-disparagement provision.
Judge Torres denied the parties’ motion for settlement approval because those confidentiality and non-disparagement terms were not permissible in this wage case. The court directed the parties to file a revised settlement agreement by June 23, 2021.
The detailed version
- Dunbar v. 4399 Bronx Chicken LLC. · No. 1:20-cv-07884
- Analisa Torres
- June 9, 2021
Background
Krystal Dunbar brought claims against 4399 Bronx Chicken LLC and the individual defendants for alleged unpaid minimum and overtime wages and retaliation under the Fair Labor Standards Act (FLSA) and the New York Labor Law. She also alleged unpaid wages and violations of the New York Labor Law’s notice requirements. The parties reached a settlement and jointly asked the court to approve it.
Proposed Settlement
The agreement provided for a total recovery of $25,000: $16,067 for Dunbar and $8,933 for her counsel. The parties stated that Dunbar’s maximum possible recovery was approximately $52,240, excluding attorney’s fees and costs, while counsel estimated the maximum recovery on the wage claims at $420. They identified retaliation as Dunbar’s primary claim; Dunbar alleged that she was wrongfully fired, while the defendants claimed that she quit. The parties also stated that they negotiated at arm’s length through a mediator and that there was no evidence of fraud or collusion.
Court’s Analysis
Because FLSA wage claims cannot be settled without approval from the Department of Labor or a federal district court, the court evaluated whether the agreement was fair and reasonable. The court concluded that the settlement satisfied the relevant fairness factors. It also found the release provision acceptable because it was limited to Dunbar’s federal, state, and local wage-and-hour claims.
The court found two provisions impermissible. First, the confidentiality provision barred Dunbar from discussing the settlement’s terms, substance, or negotiation with the media. Second, the broad non-disparagement provision conflicted with the FLSA’s remedial purposes. The court separately reviewed the attorney’s fees. Counsel’s lodestar calculation—an estimate based on hours worked multiplied by the hourly rate—was $7,385 in fees and $400 in costs, based on 21.1 hours at $350 per hour. The requested fees and costs were approximately 1.2 times the lodestar, which the court found reasonable.
Ruling
The court DENIED the parties’ motion for settlement approval. It directed the parties to file a revised settlement agreement by June 23, 2021, consistent with the order.
Read the full 5-page opinion on CourtListener, the free public archive maintained by the Free Law Project.