Joseph v. Metropolitan Transportation Authority

Background

Ten plaintiffs brought claims against the Metropolitan Transportation Authority (MTA) and Triborough Bridge and Tunnel Authority (TBTA), including claims for unpaid overtime under the Fair Labor Standards Act (FLSA). The parties reached a proposed settlement and asked the court to approve it. The proposed settlement would provide the plaintiffs a total recovery of $105,158.96.

Settlement Review

The court explained that FLSA settlements require approval by the United States Department of Labor or a district court. A court may approve a settlement only if it is fair and reasonable. Relevant considerations include the plaintiffs’ possible recovery, the costs and burdens of continued litigation, the risks of the case, whether experienced counsel negotiated at arm’s length, and whether fraud or collusion may have occurred. The court must also separately review any request for attorneys’ fees.

The parties stated that the settlement would avoid discovery, motion practice, expert discovery, and a possible trial. They also identified litigation risks concerning whether some plaintiffs were exempt from the FLSA and whether they performed covered non-union duties during the relevant period. The parties said that counsel had experience in employment and wage-hour cases, that negotiations were conducted at arm’s length, and that there was no evidence of fraud or collusion.

The court nevertheless found the submission insufficient. The parties did not state each plaintiff’s range of possible recovery. They instead stated that the settlement represented between 40 percent and 63 percent of each plaintiff’s potential recovery, but did not provide each plaintiff’s estimated hours worked or applicable wage. They also submitted no evidence supporting their assertion that the individual settlement amounts were a significant positive result.

Release Provision

The court also rejected the settlement’s liability release as overbroad. The release covered numerous entities beyond the MTA and TBTA, including listed affiliates, subsidiaries, officers, employees, agents, and other individuals. It also purported to bind the settling plaintiffs’ heirs, family members, spouses, representatives, and other related persons, including people who were not parties to the lawsuit. The court found that, read literally, the provision could release wage-and-hour claims against unidentified individuals and businesses only tenuously connected to the defendants. The parties provided no support for the scope of the release, and the court stated that the plaintiff received no release from liability.

Attorneys’ Fees and Jurisdiction

Plaintiffs’ counsel requested one-third of the plaintiffs’ settlement recovery, identified in the submission as $9,850. The court stated that a fee request must include contemporaneous billing records showing, for each attorney, the date, hours worked, and nature of the work. Because counsel provided no supporting documentation, the court could not approve the fee request in its current form.

The proposed settlement provided that the court would retain jurisdiction for matters relating to review, approval, and enforcement. The court stated that it would retain jurisdiction over enforcement of an approved settlement agreement for only one year.

Disposition

Judge Analisa Torres denied the parties’ motion for settlement approval without prejudice to refiling a revised and complete motion. The parties were permitted to file a revised motion consistent with the order by May 22, 2023. The order did not approve the proposed settlement.