Hassan v. Classic Food Inc.

Background

Rabey A. Hassan sued Classic Food Inc., doing business as Sido Falafel & More, and Emile Akleh under the Fair Labor Standards Act, a federal wage-and-hour law, and New York Labor Law. Hassan alleged that the defendants failed to pay the correct minimum wage, overtime wages, and spread-of-hours premium. He also alleged that they did not provide written notice of his rate of pay or maintain proper payroll records.

The opinion states that Hassan worked as a chef from approximately 1997 through March 22, 2022. His duties included cooking, managing, greeting, serving, and servicing the defendants’ clients. He filed the action on September 15, 2020. After the parties participated in mediation on August 9, 2022, they reached a settlement and asked the court to approve it.

Settlement Review

The court reviewed the proposed settlement under the Second Circuit’s requirement that courts approve settlements resolving Fair Labor Standards Act claims. The court considered the possible amount Hassan could recover, the burdens and costs of continued litigation, the risks faced by both sides, whether the agreement resulted from negotiations between experienced counsel, and any possibility of fraud or collusion.

Hassan estimated his maximum possible recovery at between $89,942.60 and $255,744.40. The proposed settlement totaled $50,000, with $28,408.15 going to Hassan. The court noted that this was approximately 11% of his best-case estimate and found the amount reasonable in light of the litigation risks. The parties identified disputes over the accuracy of the defendants’ records and testimony, and Hassan acknowledged that a judge or jury could credit the defendants’ evidence and find that his damages were minimal.

The parties represented that experienced employment-law counsel negotiated the agreement extensively. The court found no evidence of fraud or collusion. It also found the release appropriately limited to employment-related wage-and-hour claims through the date the agreement was signed. The agreement had no confidentiality provision. Although it included a mutual non-disparagement provision, it allowed truthful statements.

Attorneys’ Fees and Costs

The court approved $21,591.85 for Hassan’s counsel, including $16,666.66 in attorneys’ fees and $4,925.19 in costs. The court found the fee award reasonable because it was approximately one-third of the settlement, was less than counsel’s stated lodestar supported by billing records, and was supported by documentation of the costs.

Ruling

The court approved the parties’ $50,000 settlement as fair and reasonable. It ordered that the action be dismissed with prejudice and directed the Clerk to close the case.