Aguilar v. Tacos Grand Central, Inc.

Background

Miguel De La Luz Aguilar sued Tacos Grand Central, Inc., doing business as Tacos Times Square, Cesar Hernandez, Elias Doe, and Rodolfo Hernandez. He asserted claims for unpaid minimum and overtime wages under the Fair Labor Standards Act (FLSA), along with related claims under the New York Labor Law, including spread-of-hours, wage-notice, and wage-statement claims. After reaching a settlement, the parties asked the court to approve it.

Settlement and attorney’s fees

The proposed settlement provided Aguilar with a total recovery of $7,500, including attorney’s fees and costs. The court explained that an FLSA settlement must be fair and reasonable and that attorney’s fees must be assessed separately.

The parties’ submission sought $2,500 for counsel, consisting of $2,100 in attorney’s fees and $400 in costs. The court found the requested fees reasonable based on counsel’s contemporaneous time records, which showed 22.1 hours of work and a lodestar amount of $6,437.50. A lodestar is an estimate based on reasonable hours multiplied by reasonable hourly rates. The court also found the $400 filing-fee cost reasonable.

Reasons approval was denied

The court could not determine whether Aguilar’s recovery was fair because the parties provided estimates of approximately $19,828.13 in back wages based on Aguilar’s recollections and approximately $11,888.76 based on time records produced by the defendants, but did not state Aguilar’s maximum possible recovery for all claims.

The court also found the settlement’s release provision overly broad. The release bound not only Aguilar but also people such as his spouse, children, agents, heirs, and legal representatives. It released a broad group of entities beyond the named defendants and potentially covered claims beyond the wage-and-hour claims at issue in the lawsuit. The court further noted that Aguilar received no release from liability.

Finally, the settlement used the former name of Aguilar’s law firm, “Michael Faillace & Associates P.C.,” even though the court had been informed that the firm’s name had changed to CSM Legal P.C. The court directed the parties to correct that name in a revised agreement.

Disposition

Judge Analisa Torres denied the parties’ request for settlement approval without prejudice to refiling a revised settlement agreement by April 27, 2023. The revised agreement must narrow the release so that it does not benefit people or entities beyond the parties and releases only claims arising from the same facts as the claims in this action. The parties must also submit a revised letter estimating Aguilar’s maximum recovery and update the law firm’s name in the settlement.