Guerra v. Bunny Deli Inc.

Background

Martin Guerra and Flavio Guerra brought claims against Bunny Deli Inc. and Rasalino Victorio-Mendosa under the Fair Labor Standards Act (FLSA), a federal wage-and-hour law, and New York wage laws. The complaint sought unpaid minimum wages, overtime compensation, “spread of hours” pay, liquidated and statutory damages, interest, and attorneys’ fees and costs.

On August 24, 2022, the parties filed a joint motion asking the court to approve their settlement agreement. Because the Department of Labor had not approved the agreement, the court had to decide whether the settlement was fair and reasonable before approving it.

Settlement Amount

The plaintiffs stated that, if they prevailed on all claims, they estimated their potential recovery at approximately $105,500. A footnote records that the defendants denied the allegations and that, even assuming the defendants’ time and pay records were accurate, the plaintiffs estimated their damages at approximately $89,200.

Under the agreement, Flavio Guerra would receive $32,938.88 and Martin Guerra would receive $8,914.84, for a total of $41,853.72. The court noted that this amount, excluding attorneys’ fees and costs, was approximately 39 percent of the plaintiffs’ stated potential recovery. The court also found no indication that the agreement resulted from anything other than arm’s-length bargaining between experienced counsel or that it involved fraud or collusion.

Release and Other Terms

The agreement’s release applied to claims alleged in the complaint and related wage-and-hour claims under the FLSA, New York Labor Law, and the Wage Theft Prevention Act. The court found the release appropriately limited rather than a broad release of unrelated or unknown claims.

The agreement included non-disparagement and non-defamation provisions, but it allowed truthful statements about the facts underlying the plaintiffs’ claims. The agreement also did not bar the plaintiffs from working for the defendants in the future. The court found these provisions fair and reasonable.

Attorneys’ Fees and Costs

The agreement provided plaintiffs’ counsel with $20,646.26 in fees and $555 in costs, totaling $21,201.26. The court noted that counsel’s contingent-fee agreement entitled counsel to one-third of the total recovery. Counsel submitted billing records showing 33.7 attorney hours at $400 per hour and 9.9 paralegal hours at $100 per hour, producing a lodestar amount of $14,470, plus $555 in costs.

The court found the hourly rates and time spent reasonable. It also found that the total fee and cost award was consistent with fee multipliers approved in other cases and therefore fair and reasonable.

Disposition

Judge Vernon S. Broderick held that the proposed settlement agreement was fair and reasonable and APPROVED it. The court GRANTED the parties’ joint motion seeking approval of the agreement and entry of the proposed stipulation and order of dismissal with prejudice. The opinion states that the proposed stipulation and order would be filed concurrently with the opinion.