Rodriguez v. Taco Mix LLC
- Edgardo Ramos
- 1:21-cv-03644
- U.S. District Court · Southern District of New York
- 7
In Rodriguez v. Taco Mix LLC, Judge Ramos denied without prejudice approval of the proposed Fair Labor Standards Act settlement because its terms were improper.
Maximinio Rodriguez and the defendants were affected because the proposed settlement was not approved. The parties could revise the agreement, continue toward trial, or stipulate to dismissal without prejudice.
What happened
Maximinio Rodriguez sued Taco Mix LLC and related defendants under the Fair Labor Standards Act, a federal wage law, and New York Labor Law. The parties asked the court to approve a $48,000 settlement. Rodriguez would receive $31,600 after $16,000 in attorneys’ fees and $400 in costs.
The court found that the settlement amount and proposed attorneys’ fees and costs were reasonable. But it rejected the agreement’s broad release of known, unknown, and unrelated claims; its one-sided ban on Rodriguez’s future employment with the defendants and listed associates; and its non-disparagement clause, which lacked an exception allowing truthful statements about his case.
In Rodriguez v. Taco Mix LLC, Judge Edgardo Ramos denied without prejudice the request for settlement approval. The parties were told to submit a revised agreement, continue toward trial, or agree to dismiss the case without prejudice by May 6, 2022.
The detailed version
- Rodriguez v. Taco Mix LLC · No. 1:21-cv-03644
- Edgardo Ramos
- Apr. 26, 2022
Background
Maximinio Rodriguez brought claims against Taco Mix LLC, Taco Mix II LLC, Taco Mix III LLC, Taco Mix Brooklyn LLC, Taco Mix Staten Island LLC, Jorge Sanchez, Alejo Sanchez, and Joanna Sanchez. He alleged violations of the Fair Labor Standards Act (FLSA) and New York Labor Law, including failure to pay the lawful minimum wage, overtime compensation, and spread-of-hours compensation, and failure to provide proper wage notices and wage statements.
The parties jointly moved for approval of a proposed settlement. The agreement provided for a total payment of $48,000. Rodriguez’s counsel would receive $16,000 in attorneys’ fees and $400 in costs, leaving Rodriguez with $31,600. Rodriguez estimated that his maximum recovery at trial would be $29,779.97, including partial liquidated damages, costs, interest, and attorneys’ fees.
Court’s analysis
The court explained that FLSA claims cannot be privately settled with prejudice without approval from the court or the Department of Labor. The court therefore evaluated whether the agreement was fair and reasonable.
The court approved the settlement amount as a reasonable compromise in light of the disputed issues, litigation risks, and Rodriguez’s estimated recovery. It also found the proposed fees and costs reasonable. Counsel submitted records showing 81.09 hours of work: 74.39 hours by associate Matthew Madzelan and 6.7 hours by paralegals Priscilla Sandoval and Melissa Marciano. The records reflected $23,025 in fees and $402 in costs, for a total lodestar of $23,427. The lodestar exceeded the agreement’s $16,400 allocation for fees and costs.
The court nevertheless rejected several provisions. The release waived all possible claims, including unknown claims and claims unrelated to wage-and-hour matters. It was also non-mutual because Rodriguez released claims while the defendants did not provide a corresponding release, and it extended to a long list of associated people and entities.
The agreement also barred Rodriguez from seeking employment with the defendants or their listed associates at any time in the future. The court described this no-rehire provision as highly restrictive and inconsistent with the FLSA’s remedial purposes.
Finally, the agreement barred Rodriguez from making any direct or indirect disparaging statement about the company, defendants, and listed associates. The court concluded that the clause could prohibit truthful statements about Rodriguez’s wage-and-hour claims and lacked an exception allowing such statements.
Ruling
Judge Edgardo Ramos denied without prejudice the request for settlement approval. The parties were instructed by May 6, 2022, to submit a revised agreement removing or narrowing the release, no-rehire, and non-disparagement provisions; file a joint letter stating that they would abandon settlement and proceed to trial; or stipulate to dismissal of the case without prejudice. The clerk was directed to terminate the settlement-approval motion.
Read the full 7-page opinion on CourtListener, the free public archive maintained by the Free Law Project.