Vasquez v. Tasty Picks II Corp.

Background

Javier Vasquez sued Tasty Picks II Corp., Mansoure H. Yehya, Hashem A. Yehiya, Hisham A. Yahya, and Emad Yehiya. He alleged violations of the Fair Labor Standards Act, a federal wage law, the New York Labor Law, and related New York State Department of Labor regulations. His claims included allegedly unpaid minimum wages, overtime, and spread-of-hours compensation, as well as allegedly deficient wage notices and wage statements.

The parties submitted a motion asking the court to approve their proposed settlement. The agreement provided for a total payment of $20,000. Under the agreement, Vasquez’s counsel would receive approximately one-third of that amount—$6,985.33—for attorneys’ fees and costs, and Vasquez would receive $13,014.67 after those amounts.

Court’s analysis

The court explained that, in the Second Circuit, private settlements of Fair Labor Standards Act claims that end the claims with prejudice require approval by a district court or the Department of Labor. The court therefore had to determine whether the proposed agreement was fair and reasonable. Relevant considerations include the plaintiff’s possible recovery, the burdens and expenses the settlement would avoid, the litigation risks, whether experienced counsel negotiated at arm’s length, and the possibility of fraud or collusion.

Vasquez estimated that he was entitled to $31,156.60 in unpaid overtime and minimum wages. The court determined, however, that this figure did not clearly represent his total estimated recovery. The parties’ supporting charts did not clearly identify Vasquez’s maximum possible recovery or the component parts of that estimate, and they did not clearly show the estimated recovery associated with each claim. The court also noted that several chart labels appeared to be cropped and that the charts used undefined abbreviations.

Because the information was insufficient to compare the proposed settlement with Vasquez’s possible recovery, the court could not determine whether the settlement amount was fair and reasonable. The court therefore did not conduct a full analysis of the other settlement factors at that stage.

Ruling

Judge Edgardo Ramos denied the request for settlement approval without prejudice. The parties were instructed, by December 10, 2022, either to submit a revised motion and supporting documents clearly explaining Vasquez’s estimated total recovery and its component parts or to stipulate to dismissal of the case without prejudice. The opinion did not approve the proposed settlement.