Opinion
20-CV-7064 (VSB) (OTW)
12-01-2022
ILONA SHAMIS, Plaintiff, v. SOLIL MANAGEMENT, LLC, GOLDMAN, et al., Defendants.
Honorable Vernon S. Broderick, United States District Judge.
REPORT & RECOMMENDATION
Ona T. Wang United States Magistrate Judge.
I. Introduction
Plaintiff Ilona Shamis brought this action against Solil Management, LLC and Jane Goldman (collectively “Defendants”) in accordance with the Fair Labor Standards Act (“FLSA”) and New York Labor Law (“NYLL”). Plaintiff sought damages for unpaid wages under the FLSA and the NYLL and violations of the Wage Theft Prevention Act (“WTPA”) of the NYLL. (ECF 39 at 1). Before me for Report and Recommendation is a motion for settlement approval under Cheeks v. Freeport Pancake House, Inc., 796 F.3d 199 (2d Cir. 2015). (ECF 39, 42). For the reasons below, the Court recommends the settlement agreement be APPROVED.
The following facts are as alleged in Plaintiff's complaint. (See ECF 1).
Plaintiff commenced this proceeding by filing a Complaint on August 31, 2020, seeking damages for unpaid wages under the FLSA and the NYLL and violations of the WTPA of the NYLL. (ECF 1). Defendants filed an Answer on December 7, 2020. (ECF 13). The parties attempted to mediate the allegations contained in the Complaint and Answer on January 19, 2021, but were unsuccessful. (ECF 39 at 1). The parties continued settlement negotiations and came to a proposed settlement agreement. (ECF 39 at 1-2).
II. Discussion
Fed. R. Civ. P. 41(a)(1)(A) permits the voluntary dismissal of an action brought in federal court, but subjects that grant of permission to the limitations imposed by “any applicable federal statute.” The Second Circuit has held that “in light of the unique policy considerations underlying the FLSA,” this statute falls within that exception, and that “stipulated dismissals settling FLSA claims with prejudice require the approval of the district court or the [Department of Labor] to take effect.” Cheeks, 796 F.3d at 206. This Court will approve such a settlement if it finds it to be fair and reasonable, employing the five non-exhaustive factors enumerated in Wolinsky v. Scholastic Inc.:
(1) the plaintiff's range of possible recovery; (2) the extent to which the settlement will enable the parties to avoid anticipated burdens and expenses in establishing their respective claims and defenses; (3) the seriousness of the litigation risks faced by the parties; (4) whether the settlement agreement is the product of arm's-length bargaining between experienced counsel; and (5) the possibility of fraud or collusion.900 F.Supp.2d 332, 335 (S.D.N.Y. 2012) (internal quotations omitted).
a. Range of Recovery
Plaintiff initially calculated that the potential maximum recovery in this action was $10,150.01, assuming she prevailed at trial on all of her remaining claims (representing $2,019.24 in backpay plus 100% liquidated damages and all of Plaintiff's legal fees). (ECF 39 at 3). The proposed settlement amount is $2,019.24. (ECF 39 at 2). Of the total settlement amount, Plaintiff would receive $1,346.16 (approximately 67% of her owed back wages, not including any liquidated damages or penalties). Counsel for Plaintiff would receive $673.08 in attorneys' fees. (ECF 39 at 2). Given the risks of litigation and the bona fide disputes about the value of Plaintiff's claims as noted below, the Court finds this amount reasonable.
Counsel for Plaintiff initially describes the $673.08 amount as “attorneys' fees and costs and litigation expenses,” but does not breakdown the amount between fees, costs, and litigation expenses. (ECF 39 at 2). However, based upon Counsel for Plaintiff's later description of the $673.08 as “attorneys' fees” only, and the attached time records which demonstrate that the actual fees alone greatly surpass the $673.08 amount, the Court will construe Plaintiff's request as $673.08 for attorneys' fees only. (ECF 39 at 4; Exhibit B).
b. Burden and Risks of Litigation
Settlement enables the parties to avoid the burden and expense of preparing for trial. The parties' filings demonstrate that there are significant disputes present in this case that present them with risks were they to proceed with litigation. (ECF 39 at 3). Plaintiff acknowledges that there was “significant risk to engage in protracted and costly litigation over these issues, with no guarantee of recovery.” (ECF 39 at 3).
c. Arm's Length Negotiation
The parties represent that the settlement was a product of extensive negotiations, and there is no evidence to the contrary. (ECF 39 at 3).
d. Risk of Fraud or Collusion
There is nothing in the record to suggest that fraud or collusion played a role in the settlement.
e. Additional Factors
The release is appropriately limited to claims based on Plaintiff's employment up to the date the agreement was executed and does not seek to exceed the scope of wage-and-hour issues. See Caprile v. Harabel Inc., 14-CV-6386, 2015 WL 5581568, at *2 (S.D.N.Y. Sept. 16, 2015) (finding limitation to employment-related claims sufficiently narrow).
This agreement also lacks certain objectionable provisions that courts have found fatal in other proposed FLSA settlements. The proposed settlement agreement contains no confidentiality provision and has already been filed in the public record. See Thallapaka v. Sheridan Hotel Associates LLC, No. 15-CV-1321, 2015 WL 5148867, at *1 (S.D.N.Y. Aug. 17, 2015) (finding “overwhelming majority” of courts reject confidentiality provisions in FLSA settlements). Nor does the agreement contain a non-disparagement provision. See Martinez v. Gulluoglu LLC, 15-CV-2727, 2016 WL 206474, at *1 (S.D.N.Y. Jan. 15, 2016) (finding nondisparagement provisions generally contravene the FLSA's purpose).
The Court finds that, given the particular facts and potential damages in this case, the attorneys' fees award of $673.08 is reasonable, and represents approximately 33% of the total award. Although there is no proportionality requirement, attorneys' fees in FSLA settlements generally amount to a third of the settlement award. See Fisher v. S.D. Protection, Inc., 948 F.3d 593, 603 (2d Cir. 2020) (holding that the FLSA “simply provides for a ‘reasonable attorney's fee to be paid by the defendant”); Singh v. MDB Construction Mgmt., Inc., No. 16-CV-5216 (HBP), 2018 WL 2332071, at *2 (S.D.N.Y. May 23, 2018) (noting that one-third of settlement is “normal rate”); Rodriguez-Hernandez v. K Bread & Co., 15-CV-6848, 2017 WL 2266874, at *5 (S.D.N.Y. May 23, 2017) (“In this Circuit, courts typically approve attorneys' fees that range between 30 and 33 1/3%”).
The attorneys' fees award is less than Plaintiff's counsel's stated lodestar, which is supported by the billing records attached to the proposed settlement. (ECF 39 at 4; Exhibit B). Accordingly, the Court finds the attorneys' fees award to be reasonable.
III. Conclusion
For the foregoing reasons, the Court recommends the proposed settlement agreement be approved as fair and reasonable. Plaintiff will receive $1,346.16. Plaintiff's counsel will receive $673.08 as attorneys' fees.
SO ORDERED.