Tolentino v. Thai Smile Restaurant Corp.

Background

Jeronimo Tolentino sued Thai Smile Restaurant Corp., doing business as Tue Thai Food, Prasong Pornpichayanurak, and Suphakit Saeue, also known as Nick. He alleged unpaid minimum and overtime wages under the Fair Labor Standards Act (FLSA) and New York Labor Law, as well as failure to pay spread-of-hours pay under New York law.

The parties reached a settlement and asked the court to approve it. The proposed settlement provided Tolentino with $15,000, inclusive of attorney’s fees and costs. Of that amount, plaintiff’s counsel sought $5,000 in fees and costs, equal to one-third of the settlement proceeds.

Legal Standard

The court explained that an employee’s FLSA wage claims cannot be settled without approval from the U.S. Department of Labor or a federal district court. For court approval, the parties must show that the settlement is fair and reasonable. Courts consider factors including the plaintiff’s possible recovery, the burdens and expenses avoided by settling, the litigation risks, whether experienced counsel negotiated at arm’s length, and possible fraud or collusion. Courts also examine confidentiality provisions and releases of claims.

When a settlement includes attorney’s fees, the court must separately assess whether the fee award is reasonable. Counsel must provide evidence supporting the award, including contemporaneous billing records showing the date, time spent, and work performed.

Analysis

The court noted that the parties described the settlement as the product of arm’s-length negotiations between experienced counsel. They also identified the burdens, expenses, and risks of continuing to trial, and the court found no evidence of fraud or collusion. The settlement did not contain a confidentiality provision or an overly broad release that raised concerns.

The court nevertheless could not evaluate whether the $15,000 total settlement was reasonable. Tolentino submitted no supporting declarations or exhibits stating the maximum possible recovery for his claims or explaining the sufficiency of the settlement amount. Without that information, the court could not determine Tolentino’s range of possible recovery.

The court found the requested $5,000 in attorney’s fees and costs reasonable. Counsel submitted contemporaneous time records showing 30.50 hours of work, including five hours performed by paralegals. The records supported a lodestar—the estimated value of the hours worked at the claimed hourly rates—of $11,125. Because the requested fee was less than the lodestar and one-third of the total recovery, the court concluded that the fee request was fair and reasonable.

Disposition

Judge Analisa Torres denied the parties’ motion for settlement approval without prejudice to renewal. The parties may file a revised letter and settlement agreement consistent with the order by August 4, 2023. The order did not approve the proposed settlement.