Bevel v. Metrolux Manor Corp
- Ronnie Abrams
- 1:21-cv-02689
- U.S. District Court · Southern District of New York
- 3
In Bevel v. Metrolux Manor, Judge Abrams declined to approve the proposed settlement because its release was too broad.
Royce Bevel, Metrolux Manor Corp., Shaya Seidenfeld, and their attorneys were affected. The court approved the settlement amount and attorneys’ fees as reasonable but did not approve the agreement because of its broad release provision.
What happened
Royce Bevel sued Metrolux Manor Corp. and Shaya Seidenfeld over alleged violations of the Fair Labor Standards Act and New York Labor Law. The parties asked the court to approve their settlement.
The proposed agreement required Defendants to pay $17,500, including $5,677 in attorneys’ fees and $468 in costs, leaving Bevel with $11,355. The court found the payment and attorneys’ fees reasonable, but the agreement broadly released all claims connected to Bevel’s employment.
Judge Ronnie Abrams did not approve the settlement because the release covered claims beyond those at issue in the lawsuit. The parties could submit a revised agreement or jointly state that they would abandon the agreement and continue the case by February 28, 2022.
The detailed version
- Bevel v. Metrolux Manor Corp · No. 1:21-cv-02689
- Ronnie Abrams
- Feb. 7, 2022
Background
Royce Bevel brought claims against Metrolux Manor Corp. and Shaya Seidenfeld under the Fair Labor Standards Act (FLSA) and New York Labor Law. The parties asked the court to approve a settlement agreement.
Settlement amount and attorneys’ fees
Under the proposed agreement, Defendants would pay Bevel $17,500. That amount included $5,677 in attorneys’ fees and $468 in costs, leaving Bevel with $11,355. Bevel estimated that his maximum recovery on his wage claims would be $9,940, consisting of $2,540 in unpaid wages and $7,400 for alleged wage-notice and wage-statement violations. The court therefore found that Bevel would receive approximately 114% of his estimated maximum recovery on those claims and concluded that the settlement amount was fair and reasonable.
The court also independently reviewed the attorneys’ fee request, as required in FLSA cases. The requested fee was one-third of the settlement amount. The court approved the attorneys’ fees as reasonable, although it noted that no substantive litigation had occurred beyond filing the complaint and conducting settlement negotiations. The court concluded that the fee arrangement was fair because Bevel would still receive more than his alleged damages after the fee was deducted.
Release provision
The court did not approve the settlement’s release provision. The provision released Defendants from “any and all claims in connection with Plaintiff’s employment with Defendants” as of the agreement’s execution date. The court found that this language was much broader than the FLSA and New York Labor Law claims raised in the case. It explained that an FLSA settlement release may not cover unrelated claims or claims that the plaintiff never raised. The phrase stating that the release was “consistent with” the governing precedent did not cure the problem or clarify the agreement.
Ruling and next steps
The court could not approve the parties’ settlement agreement because of the overly broad release. By February 28, 2022, the parties could either file a revised agreement addressing the release problem or file a joint letter stating that they intended to abandon the agreement and continue pursuing the litigation. The order did not state that the underlying wage claims had been resolved on their merits.
Read the full 3-page opinion on CourtListener, the free public archive maintained by the Free Law Project.