Castro v. Black Rose Hospitality LLC

Background

Armando Castro, Inocente Joj, Luis Lopez, Jose Luis Gordillo Jimenez, Miguel Alex Quiej Lopez, Olivio Reyes, Oscar Gutierrez, and Rafael Pascual Chacaj Batz sued Black Rose Hospitality LLC, James Richards, David Richer, Russell Yam, and Eric Hernandez. The plaintiffs alleged violations of the Fair Labor Standards Act (FLSA), the New York Labor Law, and the New York State Department of Labor’s Hospitality Wage Order. The parties jointly requested approval of a settlement agreement.

Settlement Amount

The court explained that it must independently review FLSA settlements for fairness and reasonableness. The proposed agreement required defendants to pay $90,000 in total, including $30,000 for attorneys’ fees and costs. The plaintiffs’ costs were $695, and their attorneys requested $29,305 in fees. The plaintiffs alleged that they were owed $52,252.79 in backpay and estimated that their total recovery at trial, including damages and interest but excluding fees and costs, could be approximately $200,053.73. The $60,000 allocated to the plaintiffs therefore represented 30% of that estimated total.

The court found the settlement amount fair and reasonable. It considered the factual and legal disputes in the case, including defendants’ wage-and-hour records, which defendants said showed that the plaintiffs worked fewer hours and earned less than claimed. The court also considered the plaintiffs’ contention that defendants had limited financial resources, which could have made it difficult to collect a larger judgment.

Fees, Release, and Non-Disparagement Provision

The court independently reviewed the fee request and approved the $29,305 in attorneys’ fees. It found that the fee was approximately one-third of the settlement fund after costs and was reasonable under the percentage-of-the-fund approach.

The settlement’s release provision covered wage-and-hour claims arising through the date the parties executed the agreement, particularly claims under the FLSA, New York Labor Law, and Hospitality Wage Order. The court found the release appropriately limited to issues asserted in the action or related claims that could have been asserted.

The agreement also included a non-disparagement provision. The court found it acceptable because it allowed the parties to communicate truthfully about their experiences during the litigation, including the claims and defenses.

Ruling

Judge Ronnie Abrams approved the parties’ settlement agreement. The court dismissed the complaint with prejudice in accordance with the agreement and directed the Clerk of Court to close the case.