Francisco v. Han-Bae Corp.
- Vernon Broderick
- 1:21-cv-05165
- U.S. District Court · Southern District of New York
- 6
In Francisco v. Han-Bae Corp., Judge Broderick approved the parties’ fair and reasonable settlement of Francisco’s wage claims.
Servando Francisco and Han-Bae Corp. and the other defendants were affected: the court approved their FLSA settlement, including the payment and release terms, and closed the case.
What happened
In Francisco v. Han-Bae Corp., the parties told the court they had settled Servando Francisco’s Fair Labor Standards Act wage case. Because the Department of Labor had not approved the settlement, the court reviewed it for fairness and reasonableness.
The agreement provided for a total distribution of $13,000, including attorneys’ fees and expenses. The court considered disputes about Francisco’s work hours and compensation, the records produced by the defendants, the risks and costs of further litigation, and the parties’ negotiations. It also found that the release was limited to the wage claims involved in the case and that the agreement had no improper speech restriction or employment ban.
Judge Vernon S. Broderick approved the settlement, including $4,653.33 in attorneys’ fees, which he found reasonable under both a percentage-of-the-settlement and hourly-billing analysis. He directed the Clerk of Court to terminate open motions and close the case.
The detailed version
- Francisco v. Han-Bae Corp. · No. 1:21-cv-05165
- Vernon Broderick
- July 27, 2022
Background
The parties advised the court that they had reached a settlement in Servando Francisco’s Fair Labor Standards Act (FLSA) case. The Department of Labor had not approved the agreement, so the court independently reviewed whether it was fair and reasonable.
Settlement Amount
The settlement agreement provided for a total distribution of $13,000 to Francisco, inclusive of attorneys’ fees and expenses. Counsel represented that Francisco initially claimed approximately $151,944.94 in back wages and approximately $426,123.19 if he recovered the full amount of his claims, including calculated damages, penalties, and interest but excluding attorneys’ fees and costs.
The court found the lower settlement amount reasonable because Francisco’s claims were based solely on his recollection, while the defendants had produced records that purportedly disputed the hours he worked and his compensation. The court also considered the need for further discovery, motion practice, and potentially a trial; the uncertainty of recovering the full amount claimed; the litigation and collection risks; and the parties’ apparently arm’s-length negotiations. The court found no basis to believe that fraud or collusion was involved.
Other Settlement Terms
The court found the release provision reasonable because it applied to the Fair Labor Standards Act and New York Labor Law wage-and-hour claims at issue in the case, including claims predating execution of the agreement. The agreement did not contain a non-disparagement provision restricting truthful statements about the action or settlement, and it did not bar Francisco’s employment.
Attorneys’ Fees
The agreement provided for $4,653.33 in attorneys’ fees, approximately one-third of the $13,000 settlement. Francisco’s attorney submitted billing records showing 8.18 hours of work at $300 per hour, producing a lodestar—the amount based on reasonable hours multiplied by the hourly rate—of $2,454.
The court explained that attorneys’ fees in this type of case may be evaluated either as a percentage of the settlement or under the lodestar method. It found the fee reasonable under both approaches: one-third was a routinely approved percentage of an FLSA settlement, and the requested amount was less than twice the lodestar.
Disposition
The court found the proposed settlement agreement fair and reasonable and approved it. The Clerk of Court was directed to terminate any open motions and close the case.
Read the full 6-page opinion on CourtListener, the free public archive maintained by the Free Law Project.