Acosta v. Abed

Background

Jose Acosta brought this wage-and-hour case, alleging violations of the minimum-wage and overtime provisions of the Fair Labor Standards Act and New York Labor Law. The parties consented to Judge Cott’s jurisdiction to review their proposed settlement and submitted a joint letter and proposed settlement agreement for approval.

Settlement Review

The court reviewed the parties’ submissions and participated in several lengthy conferences that led to the settlement. Under the applicable standard, settlements in Fair Labor Standards Act cases receive judicial review because the court considers the parties better positioned to assess the agreement’s reasonableness, while recognizing a strong presumption that a fair settlement should be approved.

The court considered the defendants’ apparent financial circumstances stemming from the COVID-19 pandemic, which required a lengthy payment schedule, and Acosta’s expressed concerns about whether damages could be collected. The court found that these circumstances supported the reasonableness of the settlement. It also found that the agreement appeared to result from arm’s-length bargaining between experienced counsel and that all settlement terms, including the allocation of attorney’s fees and costs, appeared fair and reasonable under the circumstances.

The court stated that approving the attorney-fee allocation did not approve the hourly rate of Acosta’s counsel. It also stated that approving the settlement did not approve the parties’ agreed tax allocations.

Ruling and Disposition

Judge James L. Cott approved the settlement agreement. The court retained jurisdiction over the case solely to enforce the parties’ settlement. The action was dismissed with prejudice, and the Clerk was directed to close the case.