Anzovino v. Wingate of Dutchess, Inc.

Background

Valerie Anzovino sued Wingate of Dutchess, Inc. and Wingate Healthcare, Inc. She alleged violations of the Fair Labor Standards Act (FLSA) and New York Labor Law involving unpaid overtime, unpaid bonuses, missing wage notices, and missing wage statements. The parties submitted a proposed settlement for court approval. In this circuit, courts must review proposed FLSA settlements and determine whether they are fair and reasonable.

Settlement Terms and Fairness Review

The proposed settlement required a total payment of $10,000: $6,400 to Anzovino and $3,600 to her counsel for fees and costs. The court found that the settlement was fair and reasonable under the relevant factors. The court considered Anzovino’s possible recovery, the expense and burden of further litigation, the risks of trial, the parties’ arm’s-length negotiations through experienced counsel, and the absence of evidence of fraud or collusion.

The court noted that Anzovino believed she could have recovered many times more at trial but also acknowledged a substantial risk that any judgment would be uncollectible. Defendants’ counsel represented that the defendants were no longer a going concern and had substantial debts. The parties had conducted some discovery but had not taken depositions or engaged in dispositive-motion practice. Defendants disputed several issues, including the hours Anzovino worked, whether she was exempt from overtime as an administrative employee, whether weekend work was compensable, whether Wingate Healthcare was her joint employer, and whether liquidated damages were available.

The court also found no apparent concerns involving other similarly situated employees, recurring conduct, a history of FLSA noncompliance by these employers, or novel issues requiring further development of the law. The release was interpreted as limited to wage-and-hour claims arising from the alleged violations in this case.

Problematic Non-Solicitation Provision

Paragraph 2(c) stated that Anzovino would not voluntarily participate in or aid any lawsuit or proceeding brought by any person against the defendants or another released person. The court held that this language would effectively prevent an FLSA plaintiff from cooperating with other claimants. Courts routinely reject such provisions because they can discourage employees from providing information or participating in other wage cases.

The court stated that deleting this language would allow it to approve the rest of the agreement. The court therefore found the proposed settlement fair and reasonable except for paragraph 2(c), but did not approve the agreement at that time.

Attorneys’ Fees and Costs

The proposed agreement allocated $3,200 in attorneys’ fees and $400 in costs to counsel. The $3,200 fee was one-third of the settlement amount after costs and represented approximately 17 percent of counsel’s claimed lodestar—the number of hours multiplied by the claimed hourly rate. Counsel reported 46.2 hours at $400 per hour, producing a claimed lodestar of $18,480. The court found the requested fee reasonable. It also found the $400 cost request reasonable and sufficiently supported by the court filing fee reflected on the docket.

Disposition

The court denied without prejudice the parties’ application for approval of the proposed settlement. It directed the parties to modify paragraph 2(c), refile the proposed settlement agreement by January 27, 2023, identify any changes in a cover letter, and submit a proposed stipulation of dismissal for the court to approve. No settlement approval or dismissal was entered in this decision.