Aguilar v. Tacos Grand Central, Inc.

Background

Miguel De La Luz Aguilar sued Tacos Grand Central, Inc., doing business as Tacos Times Square, Cesar Hernandez, Elias Doe, and Rodolfo Hernandez. He alleged violations of the Fair Labor Standards Act, the federal wage law, and the New York Labor Law based on, among other things, unpaid minimum and overtime wages.

The parties reached a settlement and asked the court to approve it. The court denied the first proposed agreement without prejudice to renewal. It also denied the parties’ revised agreement without prejudice to renewal because its liability-release provision was too broad.

Legal Standard

The court explained that an employee’s settlement of Fair Labor Standards Act wage claims requires approval by the Department of Labor or a federal district court. For court approval, the settlement must be fair and reasonable. Courts consider the plaintiff’s possible recovery, the burdens and expenses of continued litigation, the risks of litigation, whether experienced counsel negotiated at arm’s length, and the possibility of fraud or collusion. Courts also should not approve highly restrictive confidentiality provisions or overbroad releases.

When a settlement includes attorney’s fees, the court must separately assess whether the fees are reasonable. Counsel must provide evidence supporting the fee request, including contemporaneous billing records.

Analysis

The second revised settlement provided Aguilar with $7,500, inclusive of attorney’s fees and costs. The court had previously found that this amount was on the low end of settlements approved in the district but was fair and reasonable because of the significant challenges Aguilar would face at trial.

The second revised agreement narrowed the release clause so that it released only the defendants and no entities beyond them from liability. The court concluded that the narrower release was fair and reasonable. The court had previously found that Aguilar’s counsel’s requested fees and costs were fair and reasonable, and it therefore granted counsel’s fee request.

Disposition

Judge Analisa Torres granted the parties’ motion for settlement approval and approved the second revised settlement. The Clerk of Court was directed to terminate pending motions, vacate all conferences, and close the case.