Melendez v. Rockaway Maintenance Partners, Corp.

Background

David Melendez brought claims under the Fair Labor Standards Act (FLSA) and the New York Labor Law (NYLL). He alleged that, while employed by the defendants as a building superintendent, he regularly worked more than 40 hours per week but received a flat weekly payment of $600. He claimed that this resulted in unpaid minimum wages and overtime. He also alleged that the defendants failed to provide accurate paystubs and a required wage-theft notice, and retaliated against him.

Before the lawsuit, Melendez and the defendants negotiated a payment. On February 16, 2022, Melendez signed a release in exchange for $7,500. The release covered compensation and wage-related claims under the FLSA, the NYLL, and the Wage Theft Prevention Act, along with other claims arising through the settlement date. The release defined the covered company to include Rockaway Maintenance Corp., Rockaway Maintenance Partners Corp., related companies, and current or former employees and other representatives.

The defendants moved for summary judgment under Federal Rule of Civil Procedure 56, arguing that the release barred all of Melendez’s claims. The motion was unopposed. The court explained that an unopposed motion still must be supported by evidence showing that the moving party is entitled to judgment as a matter of law.

FLSA claims

The court held that the release’s wording covered Melendez’s FLSA minimum-wage and overtime claims. But a release of FLSA rights is enforceable only if it reflects a genuine compromise of a genuine dispute, rather than merely a waiver of rights guaranteed by the statute. Relevant considerations include whether the parties disputed the hours worked or rate of pay, whether the payment represented a compromise of the claimed wages, whether the employee knew of the rights involved, and other circumstances surrounding the agreement.

The defendants’ evidence showed that Melendez knew of potential federal and state labor claims and had counsel, but their statement of undisputed facts did not establish a genuine dispute about Melendez’s hours or pay. It also did not show that the $7,500 payment was a compromise of the wages Melendez claimed, rather than payment in exchange for a release that also eliminated potential liquidated damages. The court therefore ruled that the defendants had not shown entitlement to summary judgment on the FLSA claims.

NYLL claims

The court reached a different result for the NYLL claims. It held that the release clearly covered the NYLL overtime, minimum-wage, paystub, and wage-theft-notice claims. It also covered the portions of Melendez’s retaliation claim based on being required to remain on call, informal discipline, and refusal to pay accrued leave.

The release did not cover Melendez’s claim that the defendants terminated his employment in retaliation. The court reasoned that the release described wage and compensation claims but did not expressly release retaliatory-termination claims. The court would not add language to the agreement that the parties had not included.

Under New York contract law, the court found the release clear and unambiguous and found no basis in the unopposed record to conclude that Melendez signed it because of fraud, duress, or undue influence. The release therefore barred the NYLL claims that it covered, but not the NYLL retaliation claim based on termination.

Disposition

Judge Liman’s order states that the motion for summary judgment was granted in part and denied in part, without prejudice. The Clerk of Court was directed to close the motion docket entry.