Farez v. JGR Services, Inc.

Background

Marco Morocho Farez, Jorge Morocho Farez, Moises Nugra Morocho, Abraham Nugra Morocho, and Diego Farez sued JGR Services, Inc., Cuetes Corp., and Juan Martinez under the Fair Labor Standards Act (FLSA) and the New York Labor Law. The plaintiffs alleged that they worked about six days per week and twelve hours per day, or approximately 72 hours per week, but were paid the same hourly rate for all hours instead of receiving time-and-a-half overtime pay for hours over 40 per week.

The plaintiffs estimated that their unpaid overtime damages could total about $100,000. They also identified risks in continuing the case, including employment records produced by the defendants that contradicted some allegations and concerns about the defendants’ financial ability to pay a larger judgment. The parties exchanged documents, including time records, tax returns, bank statements, loan documents, judgments, and bills, and attended two mediation sessions.

Settlement Terms and Analysis

The proposed agreement required the defendants to pay $55,000. Of that amount, $18,023 would go to attorneys’ fees and $929 to attorneys’ expenses, leaving the plaintiffs with $36,048. The court stated that the net recovery represented about 36% of the plaintiffs’ alleged damages.

The court reviewed the agreement under the requirement that FLSA settlements be fair and reasonable. It found that the settlement amount reasonably accounted for factual disputes, litigation risks, and the defendants’ financial situation. The court also found that the agreement was negotiated competently, in good faith, and at arm’s length, with no fraud or collusion. The court was not aware of other similarly situated employees who would be affected by the settlement.

The release provision covered claims alleged in the complaint, specifically including FLSA and New York wage-law claims involving unpaid wages, liquidated damages, recordkeeping, wage statements, and wage notices. The court approved the release because it was limited to wage-and-hour issues rather than unrelated claims.

Attorneys’ Fees and Disposition

The court found the requested fees and expenses reasonable. Plaintiffs’ counsel submitted billing records showing total billable work and expenses of $23,452.50, including more than 33 hours worked by one attorney and nearly 28 hours by another. The requested $18,023 fee was approximately one-third of the settlement amount after costs, and the court found the attorneys’ rates and supporting records adequate.

The court granted the parties’ request for approval of the Settlement Agreement. It directed the clerk to terminate the pending settlement-approval motion and close the case. The opinion approved the settlement; it did not decide the underlying wage claims after trial or summary judgment.