Rodriguez v. Delta General Contracting & Management Corp.

Background

Edgar Rodriguez, Ramiro Morocho, and Fabio Salazar brought claims under the Fair Labor Standards Act (FLSA) and the New York Labor Law (NYLL). Their principal claim was that they were not paid time-and-a-half for overtime hours. The parties conducted written discovery, participated in an unsuccessful mediation, and then negotiated the material settlement terms during a court-supervised settlement conference on January 20, 2022. They later consented to Magistrate Judge Barbara Moses’s jurisdiction for all purposes.

Settlement Terms

The settlement required the defendants collectively to pay $120,000. Rodriguez would receive $42,904.06, Morocho would receive $26,732.97, and Salazar would receive $9,990.97. Plaintiffs’ counsel would receive $40,372, consisting of $39,814 in attorneys’ fees and $558 in expenses, leaving $79,628 for the plaintiffs.

The plaintiffs’ counsel estimated their unpaid overtime claim at $92,479.16, so the gross settlement was less than that estimate. The parties identified risks in proceeding to trial. The plaintiffs’ overtime estimate relied on data from Rodriguez’s Google Maps records, whose reliability the defendants could challenge. The defendants produced payroll records supporting their position that they had paid all wages due and provided required wage notices and statements; the plaintiffs believed those records were fabricated.

The agreement included a one-way release limited to wage-and-hour claims. It contained no prohibition on rehiring, confidentiality clause, or other restriction on the plaintiffs’ ability to discuss their employment with the defendants, the lawsuit, or the settlement. The proposed attorneys’ fee award represented one-third of the net settlement after costs and was approximately 1.2 times counsel’s stated lodestar, or the amount calculated from counsel’s billed time and rates.

Court’s Ruling

Applying the settlement-review requirement described in Cheeks v. Freeport Pancake House, Inc., the court found that the financial and nonfinancial terms were fair and reasonable and represented a reasonable compromise of disputed issues rather than a waiver of statutory rights caused by employer overreaching. Judge Barbara Moses therefore GRANTED the parties’ joint letter-motion and APPROVED the proposed settlement. The court ORDERED that the action be DISMISSED with prejudice and without costs, and directed the Clerk of Court to close the case.