Carmona v. Building Management Associates, Inc.

Background

Lisa Carmona, who was employed as a maintenance coordinator, brought claims under the Fair Labor Standards Act (FLSA) and the New York Labor Law (NYLL). She alleged unpaid overtime, failure to pay wages on time, and failure to provide required payroll notices and wage statements. She claimed potential damages of approximately $89,000, consisting of $42,000 in unpaid overtime, $42,000 in liquidated damages, and $5,000 for an alleged violation of NYLL § 195(3). The opinion states that this amount did not include interest or attorneys’ fees.

The parties conducted substantial discovery, litigated several discovery-related motions, and participated in a settlement conference supervised by the court on February 9, 2022. They later jointly asked the court to approve their fully executed settlement under the requirement recognized in Cheeks v. Freeport Pancake House that certain FLSA settlements receive judicial review.

Settlement Terms

The agreement requires the defendants collectively to pay $60,000 within 30 days after the court’s approval order. Carmona will receive $37,599.57. Her counsel will receive $22,400.43, consisting of $18,799.78 in attorneys’ fees and $3,600.65 in expenses. The claimed expenses include a $400 filing fee, $156 in process-server fees, and $3,044.65 in deposition costs.

The gross settlement equals approximately 67.4% of Carmona’s alleged damages. The amount paid directly to her represents nearly all of her alleged unpaid overtime damages of $42,000. The attorneys’ fee award equals one-third of the net settlement after expenses and approximately 51.7% of counsel’s stated lodestar, meaning the amount calculated from counsel’s recorded time and hourly rates.

The agreement releases the defendants from wage-and-hour claims arising from or relating to Carmona’s employment, including known and unknown claims under the FLSA, NYLL, and other wage-and-hour laws. The defendants also release Carmona from claims arising from or related to that employment. The agreement contains no prohibition on rehiring and no confidentiality clause or other restriction on Carmona’s ability to discuss her employment, the lawsuit, or the settlement.

Court’s Analysis and Ruling

The court found that the financial terms resulted from arm’s-length negotiations between experienced employment and labor counsel, with court supervision. The court considered the defendants’ position that Carmona could not work more than 40 hours per week without her supervisor’s express approval and that she had not obtained that approval for most of the overtime hours at issue. The court also considered the risks, expense, delay, and uncertainty of continuing the case, including the possibility that Carmona might recover nothing or substantially less at trial.

Judge Barbara Moses concluded that the settlement was a reasonable compromise of disputed issues rather than an improper waiver of statutory rights. She also found the nonfinancial terms and the proposed attorneys’ fees and expenses fair and reasonable. The court therefore GRANTED the parties’ joint letter-motion and APPROVED the proposed settlement. Carmona must file the Stipulation of Discontinuance within seven days after the settlement amount is paid.