Galindo Garcia v. Jan Agha Corp.

Background

Marxlenin Galindo Garcia brought the action individually and on behalf of others similarly situated. The opinion identifies the remaining defendants as 2280 Bronx LLC doing business as Kennedy Fried Chicken, Kharullah Mohammad, and Najibullah Mohammad. Garcia alleged violations of the Fair Labor Standards Act and the New York Labor Law.

The parties applied for approval of a proposed settlement agreement. Under the agreement, the defendants would pay $18,000 total. That amount included $6,000 for attorney fees and costs, leaving Garcia with $12,000. Garcia estimated that his maximum recovery, if he recovered in full, would be approximately $66,214, including $24,681 in unpaid wages and other related damages. The proposed settlement therefore represented approximately 18% of his estimated maximum recovery and approximately 49% of his alleged unpaid wages.

Court’s Analysis

The court found the settlement fair and reasonable despite its being substantially less than Garcia’s estimated maximum trial recovery. The court relied on the reported legal and evidentiary risks. The defendants categorically denied the allegations and produced employment records that contradicted Garcia’s claims. Although Garcia disputed the accuracy of those records, he recognized that they posed a serious threat to his recovery at trial. The defendants also indicated that they were financially strained because of COVID-19, which could affect their ability to fund a larger settlement.

The court independently reviewed the attorney-fee request, as required in a Fair Labor Standards Act case. The $6,000 fee equaled one-third of the settlement amount, which the court found reasonable under the percentage-of-the-fund approach.

The court also reviewed the settlement’s release provision. It found the provision acceptable because Garcia released only the claims at issue in the action and claims existing when the agreement was signed concerning alleged unpaid compensation under the Fair Labor Standards Act, the New York Labor Law, and other wage-and-hour laws. The court distinguished this limited release from broader releases that waive unrelated or unknown claims.

Disposition

The court approved the parties’ settlement agreement. The opinion states that, by separate order, the court dismissed the amended complaint with prejudice in accordance with the settlement agreement and directed the Clerk of Court to close the case. The opinion also directed that settlement funds intended for Garcia’s attorney be addressed to CSM Legal P.C., because Catalina Sojo had replaced Michael Faillace as counsel.

What This Means

The court approved the negotiated resolution rather than deciding whether the alleged wage violations occurred. Garcia was to receive $12,000 after the approved attorney fees and costs were deducted, and the settlement’s specified wage-related claims were released.