Krasnansky v. JCCA

Background

Michael Krasnansky sued JCCA f/k/a Jewish Childcare Association under the Fair Labor Standards Act of 1938 (FLSA) and the New York Labor Law. The opinion states that Krasnansky worked as a Fleet Administrator at JCCA’s Westchester Campus from September 4, 2018, until his termination on March 3, 2022.

Krasnansky alleged that JCCA automatically deducted one hour per shift for meal breaks even though employees allegedly could not take their full breaks and were routinely required to work during lunch. He also alleged that JCCA paid him a flat weekly salary of less than $1,000 regardless of hours worked, which he claimed was below New York’s required salary level for an overtime-exempt employee. He alleged that JCCA failed to pay minimum wages and overtime and failed to provide wage statements and related notices. He sought unpaid wages, overtime, liquidated damages, interest, attorney fees, and costs.

Krasnansky purported to bring the claims individually and for a proposed class of non-exempt JCCA employees. The opinion states that the parties never sought certification of a collective or class action, and that no other employees were unrepresented or affected by the settlement.

Settlement-review standard

Because the FLSA requires court approval of certain settlements, the court reviewed whether the agreement was fair and reasonable. The court considered the possible recovery, the litigation risks and expense avoided by settlement, the arm’s-length nature of the negotiations, and the possibility of fraud or collusion. It also reviewed the agreement’s release and attorney-fee provisions.

Settlement amount

The agreement required JCCA to pay $15,000. Krasnansky would receive $4,495 for his FLSA and New York wage claims and $5,000 for liquidated damages, penalties, and interest, for a total of $9,495. The agreement allocated $5,000 to his counsel for attorney fees and $505 for reimbursement of costs.

The parties estimated that Krasnansky’s best possible recovery was approximately $30,710.05, including overtime compensation, liquidated damages, and damages under the Wage Theft Prevention Act. His $9,495 net recovery represented approximately 31% of that estimate. The court found the settlement reasonable in light of factual disputes about the hours Krasnansky worked and the sufficiency of his wages.

Good faith and release

The court found that the agreement was negotiated competently, in good faith, and at arm’s length, with no fraud or collusion. It also found that Krasnansky would be the only employee affected by the settlement and dismissal.

The release covered wage-and-hour claims asserted or that could have been asserted in the lawsuit, including unknown claims based on wage-and-hour conduct occurring through the date Krasnansky signed the agreement. The court approved the release because it was limited to wage-and-hour issues rather than broadly releasing unrelated claims. The agreement also preserved the parties’ rights, where applicable, to file or participate in government-agency investigations, while limiting Krasnansky’s ability to obtain individual monetary or other individual relief through such an administrative claim.

Attorney fees and costs

Krasnansky’s counsel requested $5,000 in fees, approximately 33% of the settlement, plus $505 in costs. Counsel submitted billing records showing more than $53,000 in fees and expenses, including nearly 60 hours worked by one attorney and nearly 30 hours by another. The court found that the records provided the required information about the attorneys, dates, hours, and work performed, and that the requested amount was reasonable compared with the work billed and common fee percentages in FLSA settlements.

Disposition

The court granted the parties’ request for approval of the proposed Settlement Agreement. It directed the Clerk of Court to terminate the pending motion at Docket No. 27. The opinion does not state that the court decided whether JCCA actually violated the FLSA or New York law; it decided whether to approve the parties’ settlement.