Del Rio v. 257 SG Pizza Corp.

Background

Carlos Del Rio sued 257 SG Pizza Corp., doing business as Ciao Bella Restaurant Pizzeria, Giuseppe Graci, and Francisco “Doe.” He brought claims under the Fair Labor Standards Act (FLSA), a federal wage law, and the New York Labor Law (NYLL). He alleged that he worked as a delivery driver from June 1, 2017, through March 20, 2019; worked between 59 and 75 hours per week; did not receive overtime pay for hours over 40; and was not paid the required minimum wage because his duties were allegedly mischaracterized in payroll records. He also alleged failures to provide a wage notice at hiring and paystubs.

The parties reached a settlement after negotiations and discovery and asked the court to approve it. Their request was made under Cheeks v. Freeport Pancake House, Inc., which requires court or Department of Labor approval for certain FLSA settlements that dismiss claims with prejudice.

Court’s analysis

The court applied the fairness factors from Wolinsky v. Scholastic Inc., including the plaintiff’s possible recovery, the burdens and risks of continued litigation, whether the agreement resulted from arm’s-length negotiations, and whether fraud or collusion was involved.

Del Rio alleged a maximum recovery of $28,717.15, excluding attorneys’ fees and costs, liquidated damages, and penalties. The proposed settlement totaled $8,500. Del Rio would receive $4,533.15, which the court described as approximately 16% of his alleged back wages. The court found that amount reasonable in light of the risks and costs of continuing the case and the disputes concerning proof of damages.

The parties represented that the settlement followed extensive negotiations, and the court found no evidence of fraud or collusion. The release was limited to claims based on Del Rio’s employment through the date the agreement was signed and did not extend beyond wage-and-hour issues. The agreement contained no confidentiality or non-disparagement provision.

The opinion states in its analysis that an attorneys’ fee award of $6,799.72 was reasonable and represented approximately 33% of the total award. However, the conclusion states that Del Rio’s counsel would receive $3,966.85 from the settlement, allocated as $2,266.57 in attorneys’ fees and $1,700.28 in costs.

Disposition

The court approved the parties’ proposed settlement agreement as fair and reasonable. It ordered that Del Rio receive $4,533.15, stated the counsel allocation described above, dismissed the action with prejudice, and directed the Clerk of Court to close the case.