Linares v. Cosan Construction Corp.
- Vernon Broderick
- 1:22-cv-06267
- U.S. District Court · Southern District of New York
- 7
In Linares v. Cosan Construction Corp., Judge Broderick denied FLSA settlement approval without prejudice because required fairness information was missing.
Jose Linares, his counsel, and the defendants are affected because the proposed settlement was not approved. The parties may submit corrected materials and a revised agreement within 21 days, or abandon the settlement and proceed to a status conference.
What happened
In Linares v. Cosan Construction Corp., the parties asked the court to approve their proposed settlement of Jose Linares’s claims under the Fair Labor Standards Act and related New York wage laws.
The court could not determine whether the settlement was fair and reasonable because Linares did not provide the damages spreadsheet described in the filing. The billing records also included work apparently related to another client, and the settlement contained a one-sided “No Publicity” clause that lacked a stated justification and restricted discussion of the settlement.
Judge Broderick denied the request to approve the settlement without prejudice. The parties may submit corrected documents and a revised agreement within 21 days, or tell the court they are abandoning the settlement.
The detailed version
- Linares v. Cosan Construction Corp. · No. 1:22-cv-06267
- Vernon Broderick
- Feb. 12, 2024
Background
Jose Linares sued Cosan Construction Corp., Cosan New York Inc., and Terrence Ferguson, individually, seeking unpaid overtime compensation, liquidated damages, compensation for alleged wage-notice and wage-statement violations, interest, and attorneys’ fees and costs under the Fair Labor Standards Act (FLSA), New York Labor Law, and the New York State Wage Theft Prevention Act. The parties jointly asked the court to approve a settlement.
Because the Department of Labor had not approved the settlement, the court had to decide whether it was fair and reasonable. The court explained that it could not rewrite an unreasonable settlement; it had to reject the agreement or give the parties an opportunity to revise it.
Reasons for Denial
Settlement amount
Linares’s filing said that a spreadsheet showing his alleged damages was attached and stated that his best-case recovery was more than $15,000, including approximately $2,800 in unpaid overtime. The spreadsheet was not provided. Without it, the court lacked enough information about Linares’s possible recovery and how the damages were calculated, so it could not evaluate whether the settlement amount was reasonable.
Attorneys’ fees and costs
The proposed settlement would pay Linares’s counsel $3,533.33. Counsel stated that the legal fees totaled $3,927.10 and referred to attached time records. But those records showed $4,465.55 billed for the Linares matter and included multiple entries concerning Diego Orea, apparently another client. The court required a breakdown of the fees and costs attributable to Linares, an invoice containing only Linares-related entries, or an indication of which entries related solely to him. It also directed counsel to explain why Orea’s entries appeared in the records.
“No Publicity” clause
The settlement’s non-mutual “No Publicity” clause barred Linares’s counsel from specifically advertising the settlement or issuing a press release. It also barred Linares and his counsel from initiating discussions about the settlement amount with third parties outside their immediate family and accountants.
The court found that the clause could prevent Linares from speaking truthfully about his experiences, claims, and lawsuit’s resolution. The parties gave no reason for the restriction. The court stated that the clause could remain only if the parties either removed it or provided a compelling justification, made it mutual, and clarified that it did not bar truthful statements about the litigation experience.
Disposition
Judge Vernon S. Broderick found that these deficiencies made the proposed settlement not fair and reasonable. The request for approval was DENIED without prejudice. Within 21 days, the parties could file missing or corrected documents and a revised settlement agreement, or file a joint letter stating that they intended to abandon settlement, after which the court would set a status conference. The opinion did not decide whether Linares’s underlying wage claims were valid or what amount he was entitled to recover.
Read the full 7-page opinion on CourtListener, the free public archive maintained by the Free Law Project.