Velez v. S.T.A. Parking Corp.

Background

The five plaintiffs brought claims under the Fair Labor Standards Act and the New York Labor Law, alleging that the defendants failed to pay overtime wages. After the parties reached a settlement, they sought court approval because federal wage claims under the Fair Labor Standards Act cannot be settled without approval from the U.S. Department of Labor or a district court.

The Court had previously denied approval of the parties’ first proposed agreement without prejudice to renewal. The parties then submitted a revised federal wage-law settlement and a separate agreement resolving their New York wage-law claims. The Court reviewed both because it was concerned that splitting the settlement could improperly affect the federal settlement.

Settlement terms and fairness

The revised federal settlement provided the five plaintiffs with $30,000, including attorney’s fees and costs. The parties represented that the plaintiffs’ maximum possible recovery on their federal claims was $60,000, but that some or all of their damages might be barred by the federal law’s two- or three-year limitations period. The separate New York settlement provided $220,965.34, and the parties stated that the two agreements together provided between 100% and 110% of the plaintiffs’ alleged actual unpaid wages.

The Court concluded that the revised settlement was fair and reasonable under the factors it uses to evaluate wage settlements. It also found the requested federal-settlement attorney’s fee of $10,000 reasonable. Counsel submitted time records showing 19.6 hours billed at $400 per hour by Andrew Beresin and 7.8 hours billed at $500 per hour by Michael S. Samuel. The Court calculated a lodestar—reasonable hours multiplied by reasonable hourly rates—of $11,740 in fees plus $872 in costs, for a total of $12,612, and accepted the requested $10,000 fee. The opinion also states that the total attorney’s fee award from this matter, including the New York settlement, was $83,647.45.

Release provision

Despite finding the settlement amount and fees reasonable, the Court held that the release provisions remained overbroad. The agreements released not only the named defendants but also numerous other entities and people, including predecessors, successors, parents, subsidiaries, affiliates, officers, directors, members, employees, agents, heirs, and attorneys. The release also bound successors, assigns, heirs, executors, agents, administrators, and legal and personal representatives of the plaintiffs.

The release covered all claims relating to the lawsuit and “any claim regarding unpaid or improperly paid wages,” including claims under federal and New York wage laws, wage-notice and wage-statement laws, contract claims, and claims for benefits, compensation, attorney’s fees, and other payments. The Court determined that this language could release wage-and-hour claims outside the lawsuit and did not fix the Court’s earlier concern about releasing claims against unidentified people and businesses only loosely connected to the defendants.

Disposition

Judge Analisa Torres denied the parties’ renewed motion for settlement approval without prejudice to renewal. The Court did not approve the revised settlement in its current form, but it permitted the parties to submit another settlement-approval motion by February 26, 2024.