Hernandez v. Uzzal Express Pizzeria Inc.
- Paul Engelmayer
- 1:21-cv-00177
- U.S. District Court · Southern District of New York
- 5
In Hernandez v. Uzzal Pizzeria, Judge Engelmayer declined to approve a proposed wage settlement because its release was too broad.
Eduardo Hernandez, Uzzal Pizzeria, Inc., and Mohammed Uzzal; the proposed settlement was not approved, and the parties were given the stated options to revise it or stipulate to dismissal without prejudice.
What happened
In Hernandez v. Uzzal Pizzeria, Inc. and Mohammed Uzzal, the parties asked the court to approve a settlement of Eduardo Hernandez’s claims under federal and New York wage laws. The proposed agreement required defendants to pay $10,000.
The court found the proposed attorney’s fees, the truthful-statements exception to the non-disparagement clause, and the absence of confidentiality terms fair and reasonable. But it found the general release too broad because it covered wage-law claims beyond those involved in this case and protected defendants and successor entities from future claims.
Judge Paul A. Engelmayer declined to approve the settlement at this time. He allowed the parties to submit a revised agreement by April 20, 2022, or stipulate to dismissal without prejudice.
The detailed version
- Hernandez v. Uzzal Express Pizzeria Inc. · No. 1:21-cv-00177
- Paul Engelmayer
- Apr. 6, 2022
Background
The parties submitted a proposed settlement of Eduardo Hernandez’s claims under the Fair Labor Standards Act (FLSA) and the New York Labor Law. Because the proposed settlement would resolve FLSA claims with prejudice, the court reviewed whether the agreement was fair and reasonable and separately reviewed the proposed attorney’s fees.
Proposed Settlement
Under the agreement, defendants would pay $10,000 within 21 days after court approval. Hernandez would receive $6,260.65, and his counsel would receive $3,739.35, including $609.03 in costs and $3,130.32 in attorney’s fees. The court found that the attorney’s-fee allocation was reasonable. It also found acceptable the agreement’s lack of a confidentiality provision and its non-disparagement provision, which allowed truthful statements about Hernandez’s experience litigating the case.
General Release
The court rejected the agreement’s general release as overbroad. The release covered any known or unknown claims under the FLSA or New York Labor Law from the beginning of time through the agreement’s date, including claims beyond the overdue-wage and minimum-wage claims at issue in this case. It also protected defendants and successor entities from future actions without providing comparable protection to Hernandez. The court stated that a release should not extend beyond the claims at issue in the action.
Ruling and Options
The court declined to approve the agreement at this time, stating that the ruling was without prejudice to the parties’ ability to submit a revised settlement. The parties could file a revised agreement by April 20, 2022, without the overbroad release, after which the court would reassess its fairness and reasonableness. Alternatively, they could stipulate to dismissal of the case without prejudice, which the court stated would not require approval under the circumstances described in the opinion.
Read the full 5-page opinion on CourtListener, the free public archive maintained by the Free Law Project.