Duncan Robles v. Luis Furniture 1 Inc.

Background

Oscar Duncan Robles and Jaime Genao brought claims under the Fair Labor Standards Act (FLSA) and New York Labor Law against Luis Furniture #1 Inc., Luis Furniture #2 Inc. doing business as Amsterdam Furniture, Luis Torres, Nelly Lantigua, and Luis Furniture Style Corp. After arm’s-length negotiations through the Southern District of New York’s mediation program, the parties asked the court to approve their settlement agreement.

Settlement amount

The defendants agreed to pay the plaintiffs $65,000. The agreement reserved $22,263.34 for attorneys’ fees and costs. The plaintiffs alleged approximately $143,581.38 in unpaid wages, along with other amounts including penalties, interest, costs, and attorneys’ fees. The court found the lower settlement amount reasonable because the plaintiffs faced legal and evidentiary challenges in proving their claims at trial. The court also considered that the settlement would be paid as a lump sum and that the defendants had repeatedly represented that they had limited finances and could not pay a large settlement or substantial judgment.

Attorneys’ fees

The agreement provided $21,368.34 in attorneys’ fees and $895 in costs. After reviewing counsel’s time records, the court found the fees reasonable. Counsel’s lodestar—the amount calculated from the time reasonably spent multiplied by applicable hourly rates—was $14,025.50, making the requested fee approximately 1.52 times the lodestar. The court also noted that fees of one-third of an FLSA settlement are regularly approved in the district.

Release of claims

The court approved the release provision. The plaintiffs agreed to release claims under the FLSA, New York Labor Law, and the Internal Revenue Code, but the release was limited to issues asserted in this action or related claims that could have been asserted in it. The court found that limitation appropriate.

Non-disparagement provision

The agreement did not contain a confidentiality provision. It did contain a non-disparagement clause requiring the parties to refrain from remarks that reflected adversely on the defendants’ business affairs or impugned their character, honesty, or integrity. The clause allowed the plaintiffs to make accurate statements about the action, the allegations, and the agreement. Because of that carve-out for truthful statements, the court found the clause fair and reasonable.

Disposition

The court approved the proposed settlement agreement. It directed the parties to submit a signed version of the proposed order dismissing the case with prejudice.