Ledesma v. A & G Deli Grocery Corp.

Background

The parties jointly asked the court to approve their fully executed settlement agreement under the Second Circuit’s decision in Cheeks v. Freeport Pancake House, Inc. The settlement resolved Manuel Ledesma’s claims under the Fair Labor Standards Act (FLSA) and New York Labor Law (NYLL) for unpaid overtime wages. The opinion states that Ledesma had been employed as a clerk in the defendants’ grocery store.

Settlement Terms

The agreement required the defendants collectively to pay $36,500. The joint letter stated that $24,334 would be paid to Ledesma and that $12,116 would be paid to his counsel for attorneys’ fees and costs. The gross settlement represented approximately 60.5% of Ledesma’s estimated damages of $60,246. The damages estimate included unpaid regular and overtime wages based on Ledesma’s recollection of his hours, as well as $10,000 for alleged failures to provide accurate wage statements and notices under NYLL §§ 195(a)(1) and (3); it did not include liquidated damages.

The agreement released the defendants and their affiliates from wage-and-hour claims, including claims under the FLSA and NYLL. Ledesma also agreed not to file an action or complaint with the Department of Labor or Equal Employment Opportunity Commission seeking damages for the released claims. The agreement contained no prohibition on rehiring, confidentiality clause, or other restriction on discussing his employment, the lawsuit, or the settlement terms.

Court’s Analysis

The court found that the financial terms resulted from arm’s-length bargaining among experienced employment and labor counsel, with assistance from a neutral mediator and after discovery. The court considered the risks and expenses of continued litigation, including the possibility that Ledesma might recover nothing or substantially less at trial. The court also noted that the defendants were unable to provide pay or time-keeping records. Based on these circumstances, the court found that the settlement was a reasonable compromise of disputed issues rather than an employer’s improper waiver of statutory rights.

The opinion separately states that the proposed attorneys’ fee award was $12,166, described as one-third of the gross settlement and approximately 90.4% of counsel’s stated lodestar of $13,457.50. The opinion therefore contains an apparent inconsistency between the earlier figure of $12,116 for counsel’s fees and the later figure of $12,166. The court found the fee award not excessive in light of counsel’s success.

Ruling

Judge Barbara Moses granted the parties’ joint letter-motion and approved the proposed settlement. The parties were ordered to file their stipulation of dismissal within five days after the settlement amount was paid. The agreement stated that the stipulation would dismiss the action with prejudice.