Mein v. Smith Family Farms, LLC

485 F.Supp.3d 389

Robert MEIN, Plaintiff,

v.SMITH FAMILY FARMS, LLC, Smith Family Acres, LLC, Stephen Smith, and Stephen Britt, Defendants.

6:20-CV-06306 EAW

United States District Court, W.D. New York.

Signed September 9, 2020

John Anthony Marsella, Robert David McCreanor, Worker Justice Center of New York, Rochester, NY, for Plaintiff.

Scott S. Allen, Jr., Lippes Mathias Wexler Friedman LLP, Buffalo, NY, for Defendants.

DECISION & ORDER

ELIZABETH A. WOLFORD, United States District Judge

INTRODUCTION

Plaintiff Robert Mein ("Plaintiff") commenced this action on May 11, 2020, against defendants Smith Family Farms, LLC, Smith Family Acres, LLC, Stephen Smith, and Stephen Britt ("Defendants"), pursuant to the Fair Labor Standards Act, 29 U.S.C. §§ 201 et seq. ("FLSA"), the New York Labor Law, N.Y. Labor Law §§ 190, et seq. , N.Y. Labor Law §§ 650, et seq. ("NYLL"), and the New York Real Property Law ("NYRPL"), § 235-b. (Dkt. 1). On May 12, 2020, Plaintiff filed an Amended Complaint. (Dkt. 4). Plaintiff worked as a manual laborer at Defendants’ cattle and produce farm from October 2019 until February 21, 2020. (Id. at ¶¶ 1, 40, 44). He alleges three causes of action: (1) minimum wage violations under the FLSA; (2) minimum wage, overtime, and notice violations under the NYLL; and (3) as against defendants Smith Family Farms and Smith Family Acres, failure to provide him with premises fit for human habitation, in violation of NYRPL § 235-b. (Id. at 10-12).

On August 10, 2020, the parties filed a Motion for Settlement Approval, attaching the proposed settlement agreement as an exhibit to their motion (hereinafter, the "Agreement"). (Dkt. 10 & Dkt. 10-1). On August 24, 2020, the Court held a telephonic hearing on the parties’ motion. (Dkt. 13). The Court reserved decision on the motion and directed the parties to submit a revised Agreement, amending the release provision to make it mutual. (Id. ). The Court also instructed Plaintiff's counsel to file an affidavit, further detailing the fees and costs expended during his representation of Plaintiff. (Id. ). On August 28, 2020, the parties filed a renewed request to approve the Agreement (Dkt. 14), to which they attached the revised Agreement and the fee declaration from Plaintiff's counsel (Dkt. 14-1 & Dkt. 14-2). The revised Agreement has not yet been signed by the parties or their attorneys.

Pursuant to Cheeks v. Freeport Pancake House, Inc. , 796 F.3d 199 (2d Cir. 2015), either the district court or the United States Department of Labor must approve the settlement of an employee's FLSA claims against their employer, where the settlement would dispose of those claims with prejudice. Id. at 206. The parties request that the Court approve the proposed Agreement. (Dkt. 14). For the following reasons, the parties’ motion is granted.

DISCUSSION

I. Legal Principles

"Parties cannot privately settle FLSA claims with prejudice absent the approval of the district court or the Department of Labor." Lazaro-Garcia v. Sengupta Food Servs. , No. 15-CV-4259 (RA), 2015 WL 9162701, at *1 (S.D.N.Y. Dec. 15, 2015) (citing Cheeks , 796 F.3d at 206 ("Rule 41(a)(1)(A)(ii) stipulated dismissals settling FLSA claims with prejudice require the approval of the district court or the [Department of Labor] to take effect.")). "To approve a settlement, this Court must be satisfied that the agreement is ‘fair and reasonable.’ " Velasquez v. SAFI-G, Inc. , 137 F. Supp. 3d 582, 584 (S.D.N.Y. 2015).

In determining whether the proposed settlement is fair and reasonable, a court should consider the totality of circumstances, including but not limited to the following factors: (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.

Wolinsky v. Scholastic Inc. , 900 F. Supp. 2d 332, 335 (S.D.N.Y. 2012). Other factors may weigh against settlement approval, such as:

(1) "the presence of other employees situated similarly to the claimant"; (2) "a likelihood that the claimant's circumstance will recur"; (3) "a history of FLSA noncompliance by the same employer or others in the same industry or geographic region"; and (4) the desirability of "a mature record" and "a pointed determination of the governing factual or legal issue to further the development of the law either in general or in an industry or in a workplace."

Felix v. Breakroom Burgers & Tacos , No. 15 CIV. 3531 (PAE), 2016 WL 3791149, at *2 (S.D.N.Y. Mar. 8, 2016) (citations omitted).

A. Factors Weighing in Favor of Approval

Regarding the first Cheeks factor, the Court finds that the amount of recovery under the Agreement is fair when compared to Plaintiff's expected range of recovery. At the motion hearing, Plaintiff's counsel represented that Plaintiff's highest-expected recovery is $36,000, not accounting for attorney's fees or pre-judgment interest. The settlement agreement provides for a settlement amount of $15,000, which the parties state "falls in between Plaintiff's and Defendants’ opening damage computations, with each party maintaining that possible recovery would be significantly greater or less than the settlement amount if a compromise was not reached." (See Dkt. 10 at 2 & Dkt. 14-1 at 3). Accordingly, this amount represents a fair compromise in resolving this litigation. Further, excluding the $1,500 award for attorney's fees, the settlement sum of $13,500 represents a substantial portion of the damages allegedly owed to Plaintiff. Therefore, the Court finds Plaintiff's monetary compensation under the Agreement to be reasonable, given his possible range of recovery.

Both parties also indicate that they entered the Agreement, at least in part, to avoid litigation risks and additional costs associated with proceeding with motion practice or a trial. (See Dkt. 10 at 2 (explaining that the settlement agreement "will enable the parties to avoid the anticipated burdens of continuing with protracted litigation," and will allow for the prompt payment of wages and damages, as well as the complete and final resolution of Plaintiff's claims, which are preferable to continued litigation)). "Generally, there is a strong presumption in favor of finding a settlement fair, as the Court is generally not in as good a position as the parties to determine the reasonableness of an FLSA settlement." Lliguichuzhca v. Cinema 60, LLC , 948 F. Supp. 2d 362, 365 (S.D.N.Y. 2013) (quotation marks omitted). Here, "the [A]greement was reached early in the proceedings, reflecting the legitimate concerns of both sides to avoid time-consuming and potentially expensive litigation burdens...." Goett v. VI Jets Int'l, Inc. , No. 14-CV-8256 (MHD), 2015 WL 3616961, at *2 (S.D.N.Y. Apr. 22, 2015) ; see also Zamora v. One Fifty Seven Corp. , No. 14 Civ. 8043 (AT), 2016 WL 1366653, at *1 (S.D.N.Y. Apr. 1, 2016) ("Beyond establishing claims and defenses at trial, proceeding with litigation would require further discovery and motion practice.").

Furthermore, competent counsel on both sides facilitated the Agreement, and there is no indicia of fraud or collusion. "Typically, courts regard the adversarial nature of a litigated FLSA case to be an adequate indicator of the fairness of the settlement." Beckman v. KeyBank, N.A. , 293 F.R.D. 467, 476 (S.D.N.Y. 2013) (noting that "[d]uring the entire process, [the p]laintiffs and [the d]efendant were represented by counsel experienced in wage and hour law."); Santos v. Yellowstone Props., Inc. , No. 15 Civ. 3986 (PAE), 2016 WL 2757427, at *3 (S.D.N.Y. May 10, 2016) ("As to the fourth and fifth factors, there are no signs of fraud or collusion, and the settlement here was the product of arms’-length bargaining by experienced counsel."). Therefore, the Court concludes that the factors favoring the approval of a settlement agreement are present in the instant matter.

B. None of the Factors Weighing Against Approval Are Applicable

None of the factors weighing against settlement approval are present here. There is no evidence that other employees are similarly situated to Plaintiff's circumstances.¹ See Browder v. Advertisement Carriers Enters., Inc. , No. 15 Civ. 5594 (PAE), 2016 WL 7031608, at *4 (S.D.N.Y. Nov. 30, 2016) ("The fact that no other employee has come forward with a claim supports settlement approval." (citing Santos , 2016 WL 2757427, at *3 )). "Second, because [Plaintiff] no longer work[s] for [D]efendant[ ], the Court has little concern that [D]efendant[ ] used improper leverage to secure the settlement." Santos , 2016 WL 2757427, at *3 (citing Cisneros v. Schnipper Rest. LLC , No. 13 Civ. 6266 (JMF), 2014 WL 67235, at *1 (S.D.N.Y. Jan. 8, 2014) ). The Court is also unaware of any "history of FLSA noncompliance" by Defendants, and the Amended Complaint "does not appear to raise novel factual or legal issues that would further the development of law in this area." Id.

C. Additional Considerations in Favor of Approval

"[I]n Cheeks , the Second Circuit provided guidance as to the types of provisions that contravene the FLSA's remedial purpose of ‘prevent[ing] abuses by unscrupulous employers, and remedy[ing] the disparate bargaining power between employers and employees.’ " Yang v. Matsuya Quality Japanese Inc. , No. 15-CV-1949(JS)(ARL), 2017 WL 456464, at *1 (E.D.N.Y. Feb. 2, 2017) (quoting Cheeks , 796 F.3d at 207 ). The Second Circuit specifically disapproved of settlement agreements containing:

(1) a battery of highly restrictive confidentiality provisions ... in strong tension with the remedial purposes of the FLSA; (2) an overbroad release that would waive practically any possible claim against the defendants, including unknown claims and claims that have no

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