Andrades Cordoba v. Rivington Laundromat & Dry Cleaning, Inc.

Background

The plaintiff, Maria Elena Andrades Cordoba, filed this Fair Labor Standards Act (FLSA) action on August 16, 2021. The original complaint named Rivington Laundromat & Dry Cleaning, Inc. and Michael Zetts as defendants. The amended complaint instead named MMLZ Corp. and Zetts. Rivington later stated that it had been inadvertently named and had been sold in November 2018.

The parties reported that they had reached a settlement covering all issues. Their proposed agreement required payment of $2,750 to the plaintiff, including attorneys’ fees and expenses. The plaintiff estimated approximately $771 in back wages and identified a possible total recovery of $11,716.78, including liquidated damages, statutory penalties, and prejudgment interest. The proposed settlement therefore represented approximately 23.4% of the stated possible recovery.

Legal Standard

The court explained that parties generally may not privately settle FLSA claims without approval from the court or the Department of Labor. Without Department of Labor approval, the court must determine whether the agreement is fair and reasonable.

The court considers the total circumstances, including the plaintiff’s possible recovery, the parties’ ability to avoid the burdens and expenses of litigation, the seriousness of the litigation risks, whether experienced counsel negotiated at arm’s length, and the possibility of fraud or collusion. When a settlement includes attorneys’ fees and costs, the court also evaluates whether those amounts are reasonable and requires adequate supporting documentation.

Reasons for the Ruling

The court found that the parties had not provided enough information to evaluate the settlement. The plaintiff did not clearly explain why the parties selected $2,750 or describe the relative strengths and weaknesses of her case. The parties’ statement that the defendants vigorously contested the alleged number of hours worked did not explain the specific reasons for disputing the plaintiff’s right to recover minimum wages, overtime, or other damages.

The court also noted that the plaintiff’s calculation attributed approximately $10,000 of the possible $11,716.78 recovery to statutory penalties. Those penalties did not depend on the number of hours the plaintiff allegedly worked. The parties therefore had not adequately addressed the plaintiff’s likelihood of succeeding on her notice-related claims or otherwise shown the basis for the proposed settlement.

The court expressly reserved judgment on other parts of the agreement, including whether the requested attorneys’ fees were reasonable and whether any other provision made the settlement unfair.

Disposition

Judge Vernon S. Broderick denied without prejudice the parties’ request for approval of the settlement. The parties could file a new supporting letter within 21 days explaining why the agreement was fair and reasonable, or they could jointly state within 21 days that they intended to abandon the settlement. If they abandoned it, the court would set a status conference.