Perez Ramirez v. Hermes B NY LLC

Background

The plaintiffs brought claims under the Fair Labor Standards Act (FLSA), a federal wage law, and the New York State Labor Law. The parties told the court that they had reached a settlement. The court required them to explain why the proposed settlement should be approved under the fairness factors used for FLSA settlements.

The settlement provided for a $20,000 payment and a release of claims against the defendants related to the action. Of that payment, $2,326.50 would go to the plaintiffs’ counsel. The opinion states that the plaintiffs initially claimed more than $200,000 in damages but later concluded that their wage analysis was flawed and that they were likely paid the correct amount of wages. They instead sought recovery for spending on “tools of the trade,” which they estimated at $20,680. After fees, the plaintiff would receive $17,673.50, or about 85% of the estimated maximum recovery.

Settlement approval

The court applied the factors identified in Wolinsky v. Scholastic, Inc., including the possible recovery, the costs and burdens of continued litigation, the risks faced by the parties, whether the agreement resulted from arm’s-length negotiations between experienced counsel, and the possibility of fraud or collusion.

The court found the settlement fair and reasonable. The case was still in its early stages: fact discovery was incomplete, and the plaintiff had not sought conditional certification of a group of similarly situated plaintiffs. Settlement at that stage would avoid additional litigation expenses and risks. Both sides were represented by counsel, and the court found no indication of fraud or collusion. The court also noted that the concerns about improper pressure in an employee’s release of FLSA claims were less significant because the opinion states that the plaintiff no longer worked for the defendant.

Attorney’s fees and costs

The court approved the requested $2,326.50 in attorney’s fees and costs, to be deducted from the $20,000 settlement. The amount represented 11.6% of the settlement. As a cross-check, the court reviewed counsel’s billing records under the lodestar method, which estimates fees based on reasonable hours multiplied by a reasonable hourly rate.

The records showed 6.2 attorney and staff hours totaling $1,752.50, plus $574 in expenses. The court reviewed the records privately, found no excessive work or staffing, and found counsel’s $350 hourly rate consistent with market rates in the district. The requested amount was also less than counsel’s actual billed amount.

Disposition

The court approved the settlement and dismissed the case with prejudice, meaning the case was closed and could not be brought again in that form. The court ruled that all pending motions were moot and directed the Clerk of Court to close the case.