Rendon Campos v. Sixtyone Reade Pizza Inc.
- Alison Nathan
- 1:19-cv-02414
- U.S. District Court · Southern District of New York
- 3
Rendon Campos v. Sixtyone Reade Pizza: Judge Nathan approved a $100,000 Fair Labor Standards Act settlement after finding it fair and reasonable.
The three current and former Sixtyone Reade Pizza employees who brought the wage claims, Sixtyone Reade Pizza Inc. and the other defendants, and the employees’ attorneys were affected by the approved settlement and fee allocation.
What happened
In Rendon Campos v. Sixtyone Reade Pizza Inc., three current and former employees alleged that the restaurant paid them a fixed weekly salary that did not adequately compensate them under the Fair Labor Standards Act. The parties reached a settlement through mediation for $100,000, including one-third for their attorneys’ fees.
The court compared the settlement with the employees’ estimated possible recovery and considered disputes about how many hours they worked, along with the risks and costs of continuing the case. It found the settlement reasonable, noted that the negotiations were conducted at arm’s length, and found no indication of collusion.
Judge Alison J. Nathan also found the requested attorneys’ fees reasonable and noted that the agreement contained no objectionable confidentiality, non-disparagement, or overly broad release terms. The court approved the settlement and directed the Clerk of Court to close the case.
The detailed version
- Rendon Campos v. Sixtyone Reade Pizza Inc. · No. 1:19-cv-02414
- Alison Nathan
- Aug. 9, 2021
Background
Three current and former employees of Sixtyone Reade Pizza alleged that the restaurant paid them a fixed weekly salary that failed to adequately compensate them under the Fair Labor Standards Act, 29 U.S.C. §§ 203 et seq. The parties reached a settlement agreement through mediation. The agreement provided for a total payment of $100,000, with one-third allocated to attorneys’ fees.
Legal standard
Under the Second Circuit’s decision in Cheeks v. Freeport Pancake House, Inc., a court must review and approve a settlement of Fair Labor Standards Act claims. The court must determine whether the proposed agreement is fair and reasonable based on the totality of the circumstances. Relevant considerations include the employees’ possible recovery, the costs and burdens of continued litigation, the parties’ litigation risks, whether experienced counsel negotiated at arm’s length, and the possibility of fraud or collusion.
Court’s analysis
The employees calculated approximately $209,134 in back wages and estimated that their full recovery, including penalties and interest, would be about $591,436. Sixtyone disputed the employees’ claimed hours and indicated that it would present witnesses who would testify that they worked fewer hours than claimed. In light of those factual disputes and the risks of litigation, the court found that the settlement—about half of the claimed back wages and about one-sixth of the claimed total damages—was reasonable.
The court also found no indication of collusion because the settlement followed arm’s-length negotiations through the District’s mediation program. It approved the attorneys’ fee request of one-third of the settlement. Although that amount exceeded counsel’s lodestar value of $6,982, the court noted that courts in the district commonly use a percentage method and that strict reliance on a lodestar calculation in a pretrial settlement could discourage early settlements.
The agreement did not contain objectionable confidentiality provisions, non-disparagement clauses, or general releases extending beyond the wage-and-hour issues in the case. Based on the totality of the circumstances, the court found the settlement and attorneys’ fees fair and reasonable under Cheeks.
Disposition
The court approved the proposed settlement and directed the Clerk of Court to close the case.
Read the full 3-page opinion on CourtListener, the free public archive maintained by the Free Law Project.