Palmer v. Regent Hospitality Linen Services, LLC

Background

Trevor Palmer brought claims against Regent Hospitality Linen Services, LLC, under the Fair Labor Standards Act (FLSA) and New York Labor Law. He alleged that the defendant failed to pay overtime wages and violated wage-statement and wage-notice requirements. The parties jointly applied for approval of their settlement agreement. Because the case involved FLSA claims, the court reviewed whether the proposed settlement was fair and reasonable.

Court’s analysis

The court considered the total circumstances, including Palmer’s possible recovery, the costs and burdens the parties would avoid through settlement, the risks of continuing to trial, whether the agreement resulted from arm’s-length negotiations between experienced counsel, and whether fraud or collusion was involved.

The settlement provides a total payment of $20,000, including $13,016 to Palmer, $6,507 in attorney’s fees, and $477 in costs. Palmer estimated that his best possible recovery at trial would be $18,640. The court noted that his settlement payment was about 70 percent of that maximum estimate and more than the alleged unpaid FLSA overtime wages.

The court also noted that the parties had not conducted extensive discovery, disputed whether certain claimed time constituted compensable work, and faced other litigation risks. The defendant denied Palmer’s allegations and might have established a good-faith defense to liquidated damages. The settlement was initially reached through court-ordered mediation and then negotiated over several months. The court found no reason to believe that the agreement resulted from fraud or collusion.

The court found no factors weighing against approval. The case involved only Palmer, the agreement affected only him, and the court was unaware of similarly situated employees or a history of FLSA noncompliance by the defendant. The agreement contained no confidentiality or non-disparagement provisions, and its release was limited to the wage-and-hour claims asserted or claims that could have been asserted in the case.

The court separately reviewed the attorney’s fees and costs. The $6,507 fee was one-third of the settlement amount after costs and represented about 47 percent of the $13,735 lodestar calculation, based on 27.47 hours at a stated rate of $500 per hour. The court found the fee reasonable and granted the request for $477 in documented costs, consisting of a $402 filing fee and a $75 process-server fee.

Disposition

Judge Victoria Reznik found the settlement fair and reasonable and approved the settlement agreement filed at ECF No. 34-1. Palmer will receive $13,016, while his counsel will receive $6,984 consisting of $6,507 in fees and $477 in costs. After full and complete payment is received and cleared, Palmer’s counsel must submit a stipulation of dismissal. The clerk was directed to close ECF Nos. 31 and 34.