Garcia v. W Services Group LLC

Background

Lorena Garcia and five opt-in plaintiffs—Jorgina Garcia, Evodio Mendoza, Maria Madrid, Mauricio Orantes, and Lorena Guzman—brought claims under the Fair Labor Standards Act and New York Labor Law. Garcia alleged that she and similarly situated employees were improperly classified as independent contractors, were not paid for all time worked because of travel between job locations, were not adequately paid for overtime, did not receive proper wage notices and wage statements, and received wages late.

The parties submitted a joint letter-motion seeking approval of two fully executed settlement agreements: one between the plaintiffs, Cleaning Path Corp., and Cinia Ortega, and another between the plaintiffs and W Services Group LLC. The defendants collectively agreed to pay $75,000, with Cleaning Path paying $50,000 and W Services paying $25,000. The plaintiffs’ counsel would receive $25,000 in attorneys’ fees and $2,961.52 in costs. Garcia would receive a $2,000 service award, and the remaining settlement funds would be distributed among all six plaintiffs.

Court’s analysis

The court reviewed the settlement under the standard requiring approval of wage settlements as fair and reasonable compromises rather than waivers caused by employer overreaching. The court noted that the settlement followed informal document discovery, arm’s-length negotiations, and mediation. The $75,000 gross settlement represented about 26% of the plaintiffs’ estimated maximum recovery of $290,151.60, while the plaintiffs’ $47,038.48 net recovery represented 78% of the unpaid minimum and overtime wages they claimed.

The court also found the nonfinancial terms fair. The plaintiffs released wage-and-hour claims, including claims under the Fair Labor Standards Act and New York Labor Law, but no other claims. The agreements contained no rehiring prohibition, confidentiality clause, or other restriction on discussing the employment, the action, or the settlement. The court found the proposed attorneys’ fees and expenses not excessive in light of counsel’s stated work and the results obtained.

Disposition

Judge Barbara Moses GRANTED the parties’ joint letter-motion and APPROVED the proposed settlement. The action was DISMISSED with prejudice and without costs. The court retained jurisdiction for enforcement purposes only, and the Clerk of Court was directed to close the case.