Altamirano v. 535 West 163rd Street HDFC
- Barbara Moses
- 1:22-cv-03459
- U.S. District Court · Southern District of New York
- 4
In Altamirano v. 535 West 163rd Street HDFC, Judge Moses denied without prejudice approval of an FLSA settlement because its terms and fee documentation were inadequate.
The parties to the proposed FLSA and New York Labor Law settlement, including plaintiff Manolito Altamirano, defendants 535 West 163rd Street HDFC and Efigenia Garcia, and plaintiff’s attorneys.
What happened
In Altamirano v. 535 West 163rd Street HDFC, the parties asked the court to approve a $40,000 settlement of Manolito Altamirano’s wage claims under federal and New York law. The court found the payment appeared fair and reasonable but could not approve the agreement as written.
The court objected to a broad mutual non-disparagement clause, a provision allowing 535 West 163rd Street HDFC to refuse to rehire Altamirano, and missing records supporting the requested attorney-fee and expense awards. The court said the parties had not justified the restrictive provisions or supplied the required documentation.
Judge Barbara Moses denied the settlement-approval application without prejudice. She allowed the parties 30 days to submit a revised agreement and supporting records; if they could not reach a revision, they had to file a status report explaining what remained before trial.
The detailed version
- Altamirano v. 535 West 163rd Street HDFC · No. 1:22-cv-03459
- Barbara Moses
- July 25, 2023
Background
The parties jointly asked the court to approve their Settlement Agreement and Release of claims under the Fair Labor Standards Act (FLSA) and the New York Labor Law. The proposed agreement provided for a $40,000 gross settlement payment. The court stated that the economic terms appeared fair and reasonable, but it could not approve the agreement as written.
Reasons for rejecting the agreement as written
First, the agreement included a mutual non-disparagement clause barring conduct considered injurious to either party’s reputation and interests, including public criticism or disparagement about any subject, the lawsuit, or its settlement. The court found the clause vague and inconsistent with the public-policy principle that an FLSA plaintiff ordinarily cannot be prohibited from making truthful public statements about the lawsuit, its settlement, or the underlying facts. The parties did not show that this was the rare case in which such a broad clause would be appropriate.
Second, the agreement allowed 535 West 163rd Street HDFC to refuse to re-employ Altamirano in any capacity without penalty. The court explained that courts in the circuit seldom approve FLSA settlements containing such no-rehire provisions because they restrict employment opportunities and are in strong tension with the FLSA’s protective purpose. The parties provided no explanation justifying this provision.
Third, plaintiff’s attorneys requested $13,333.33 in fees, or one-third of the gross settlement payment, and referred partly to a lodestar calculation of $17,800. They did not provide the time and expense records the court had directed them to submit. They also did not provide invoices or receipts for the requested $174.44 in expenses, apart from the $402 filing fee for which further documentation was not required. The court therefore could not approve the requested fees and expenses on the existing record.
Disposition
Judge Barbara Moses denied the parties’ application for settlement approval without prejudice to renewal. The parties were directed to file any renewed motion within 30 days, after excising or significantly modifying the non-disparagement and no-rehire provisions and submitting contemporaneous time records and supporting documentation for all requested expenses other than court fees. If they could not negotiate a revised agreement during that period, they were directed to file a status report describing what remained to be done before trial.
Read the full 4-page opinion on CourtListener, the free public archive maintained by the Free Law Project.