Camargo v. Good Nature, Inc.

Background

Leonel Camargo sued Good Nature, Inc. and other defendants on behalf of himself and other similarly situated people. He alleged violations of the Fair Labor Standards Act, or FLSA, New York Labor Law, and New York’s Spread of Hours Wage Order. According to the amended complaint, defendants employed Camargo as a delivery worker from 2016 until about October 2, 2021. He also performed non-tipped work, including taking out trash, stocking beer, mopping, sweeping, and cleaning basements and bathrooms.

Camargo alleged that defendants did not pay the required minimum wage, overtime at one and one-half times his regular rate, or an additional hour of pay for workdays lasting more than ten hours. He also alleged violations involving wage notices, wage statements, recordkeeping, tip retention, wage deductions, weekly pay, and reimbursement for required equipment and tools. Defendants disputed the material facts and legal arguments.

Settlement-Approval Standard

The parties jointly asked the court to approve their settlement. Under the Second Circuit’s decision in Cheeks v. Freeport Pancake House, Inc., an FLSA settlement that dismisses claims with prejudice requires approval by the court or the Department of Labor. The court therefore considered whether the agreement was fair and reasonable, examining the possible recovery, the burdens and expenses of litigation, litigation risks, the parties’ arm’s-length negotiations through experienced counsel, and the possibility of fraud or collusion.

Court’s Analysis

Camargo claimed $105,781.50 in unpaid minimum wages and overtime damages. The proposed settlement totaled $32,000, of which Camargo would receive $21,065.36 and his counsel would receive $10,934.64 in fees and costs. The court described Camargo’s recovery as approximately 20% of his alleged maximum damages and found that amount significant given the early stage of the case and the risks of litigation.

The court noted factual and legal disputes, including defendants’ records that conflicted with Camargo’s recollection about his hours and wages. Settlement would avoid the burdens and expenses of preparing for trial. The court also accepted the parties’ representation that the agreement resulted from arm’s-length negotiations by experienced counsel and noted that a court-ordered mediator helped them reach the agreement.

The court found no indication of fraud or collusion. It also found the release appropriately limited to claims based on Camargo’s employment with defendants. The agreement contained no confidentiality or non-disparagement provision and had been filed publicly. The court found counsel’s requested $10,934.64 award reasonable, noting counsel’s work on the complaint, pretrial disclosures, damages analysis, mediation, and settlement agreement.

Disposition

The court approved the parties’ proposed settlement as fair and reasonable. It ordered that the action be dismissed with prejudice against defendants and without costs. The Clerk of Court was directed to close the settlement motion.