Emeterio v. A & P Restaurant Corp.

Background

Francisco Emeterio brought a class and collective action under the Fair Labor Standards Act (FLSA) and New York Labor Law. The claims alleged that the defendants failed to pay proper regular and overtime wages, used improper tip credits and time-shaving practices, failed to pay spread-of-hours premiums, improperly deducted meal credits, and failed to provide required wage statements and notices. The defendants denied liability.

The court had previously granted conditional certification of an FLSA collective, and seven individuals filed consent forms to join. The parties later amended the complaint, conducted discovery, participated in a full-day mediation, and executed a settlement agreement. The proposed settlement class covered the named plaintiffs and hourly, non-exempt front- and back-of-house employees employed by the defendants from February 7, 2014, through August 10, 2021. The court stated that 149 class members had been identified, 136 received notice, and there were no objections or opt-outs.

Settlement terms

The settlement created a gross fund of $450,000. Class members who did not opt out and returned a valid tax form would receive payments without submitting claim forms. Individual allocations would be based on the number of weeks worked during the relevant period. Class members who did not opt out would release New York wage-and-hour claims, while class members who cashed their checks would release FLSA claims.

The agreement provided for $150,000 in attorneys’ fees, plus costs; $20,000 in administration fees for Arden Claims Service LLC; and $30,000 in service awards. The court evaluated both whether the class could be certified for settlement and whether the settlement was fair, reasonable, and adequate. It considered the negotiations, discovery, the lack of objections or opt-outs, the risks and expense of continued litigation, the possibility of difficulties maintaining certification through trial, the settlement’s value compared with the potential recovery, and the defendants’ asserted inability to withstand a larger judgment.

Rulings

The court certified the class under Federal Rule of Civil Procedure 23 for settlement purposes. It found that the requirements of numerosity, commonality, typicality, adequate representation, predominance, and superiority were satisfied. The court also approved the FLSA settlement, finding that it resulted from contested litigation, involved genuine factual disputes, and reflected a fair compromise reached through arms-length negotiations.

The court approved the class settlement and the requested financial awards. It granted $150,000 in attorneys’ fees, $8,481.19 in litigation costs, $20,000 in administration fees, and $30,000 in service awards. The approved deductions total $208,481.19, leaving the remainder of the $450,000 fund for the settlement payments described in the agreement.

The court ordered the parties to administer the settlement under the agreement. Its final approval will become effective, and the case will be dismissed, after plaintiffs’ counsel confirms that the defendants have satisfied their payment obligations. The court retained jurisdiction over the matter.