Cronk v. Hudson Valley Roofing & Sheetmetal, Inc.

Decision Date11 May 2021
Docket NumberNo. 20-CV-7131 (KMK),20-CV-7131 (KMK)
Citation538 F.Supp.3d 310
Parties Thomas CRONK, Plaintiff, v. HUDSON VALLEY ROOFING & SHEETMETAL, INC., et al., Defendants.
CourtU.S. District Court — Southern District of New York

Stanley J. Silverstone, Esq., Law Office of Stanley J. Silverstone, New City, NY, Counsel for Plaintiff.

Bhavleen K. Sabharwal, Esq., Eustace, Prezioso & Yapchanyk, New York, NY, Counsel for Defendants.

OPINION & ORDER

KENNETH M. KARAS, United States District Judge:

On September 1, 2020, Plaintiff Thomas Cronk ("Plaintiff") brought this Action against Hudson Valley Roofing & Sheetmetal, Inc. ("HVRS"), Palisades Equipment Co., Inc. ("Palisades"), Hayden Building Maintenance Corporation ("HBMC"), and Gregory P. Hayden ("Hayden"; collectively, "Defendants"), pursuant to the Fair Labor Standards Act of 1938 ("FLSA"), 29 U.S.C. § 201 et seq. , and the New York Labor Law ("NYLL"), § 190 et seq. The Parties now seek approval of a revised proposed settlement agreement (the "Revised Settlement Agreement" or "RSA"). (Letter from Bhavleen Sabharwal, Esq., to Court (Feb. 12, 2021) ("Feb. 12 Sabharwal Letter") Ex. A ("RSA") (Dkt. Nos. 13, 13-1).) For the reasons that follow, the Parties’ Application is granted.

I. Background

According to the Complaint, Plaintiff was employed by Defendants from 1985 until January 24, 2020. (Compl. ¶ 25 (Dkt. No. 1).) At all times relevant to the Complaint, Defendants jointly employed Plaintiff, whose "job duties included repairing a variety of equipment, motor vehicles, trucks, forklifts, and aerial lifts; performing welding and fabrication of safety railings, ladders, hatches, and decking for job sites; driving and delivering loaded heavy trucks and tankers; maintaining and repairing asphalt storage tanks; and making asphalt deliveries." (Id. ¶¶ 22, 26.) Plaintiff contends that during the course of his employment, he regularly worked on average at least 55 hour per week for HVRS, Palisades, and HBMC. (Id. ¶ 27.)1 According to Plaintiff, he worked at least 10 hours each weekday, five hours on Saturday, and an additional five hours on two Sundays each month. (Id. ¶ 28.) On average, he performed at least 15 hours of overtime each week. (Id. ¶ 29.)

Plaintiff alleges that Defendants failed to maintain records of his work hours; failed to pay him the appropriate overtime rate for any hours worked in excess of 40 hours per week; and failed to provide him with wage statements listing his regular hourly rate, overtime rate, number of regular hours worked, and the number of overtime hours worked. (Id. ¶¶ 30–31, 34.) Plaintiff asserts that under the FLSA, he is entitled to recover unpaid overtime, liquidated damages, pre-judgment and post-judgment interest, and attorneys’ fees. (Id. ¶ 1.) He asserts that under the NYLL and supporting regulations, he is entitled to recover unpaid overtime, damages for Defendants’ failure to furnish wage statements, liquidated damages, pre-judgment and post-judgment interest, and attorneys’ fees. (Id. ¶ 2.)

Although Plaintiff filed his Complaint asserting these alleged wage violations on September 1, 2020, (see Dkt. No. 1), he first raised these claims, along with separate discrimination claims, by letter dated March 13, 2020, (see Letter from Bhavleen Sabharwal, Esq., to Court (Oct. 23, 2020) ("Oct. 23 Sabharwal Letter") 2 (Dkt. No. 6)). The Parties have entered into a separate, confidential agreement to resolve the alleged discrimination claims, which were still pending before the Equal Employment Opportunity Commission as of February 2021. (Feb. 12 Sabharwal Letter 2.) Consistent with the requirement that FLSA settlements be approved by this Court, the Parties submitted a proposed settlement agreement (the "PSA") resolving the FLSA wage claims on October 23, 2020. (Oct. 23 Sabharwal Letter 1; PSA ¶ 3 (Dkt. No. 6-1).) By Order dated January 5, 2021 (the "Jan. 2021 Order"), the Court denied the proposed settlement agreement without prejudice because the Court did not have enough information to determine whether the settlement amount was fair and reasonable. (See Jan. 2021 Order 6–7 (Dkt. No. 9).) Specifically, the Court observed that Plaintiff had failed to "provide an explanation of the methodology used to calculate" his estimated potential recovery at trial, "or the underlying data on which the calculation [was] based." (Id. at 7.)2

On February 12, 2021, the Parties submitted the Revised Settlement Agreement. (See generally RSA.) Under this revised agreement, the Parties increased the settlement amount by over $16,000. (Feb. 12 Sabharwal Letter 1.) The Parties have now renewed their request to have the Court approve the proposed agreement. (See id. )

II. Discussion
A. Standard of Review

Under Fed. R. Civ. P. 41(a)(1)(A), a plaintiff's ability to dismiss an action without a court order is made "[s]ubject to ... any applicable federal statute." "Except as provided in Rule 41(a)(1), an action may be dismissed at the plaintiff's request only by court order, on terms that the court considers proper." See Fed. R. Civ. P. 41(a)(2). The Second Circuit has confirmed that the FLSA is an "applicable federal statute," such that " 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." Cheeks v. Freeport Pancake House, Inc. , 796 F.3d 199, 206 (2d Cir. 2015), cert. denied , 577 U.S. 1067, 136 S.Ct. 824, 193 L.Ed.2d 718 (2016).3 Consequently, "the [P]arties must satisfy the Court that their agreement is ‘fair and reasonable.’ " Penafiel v. Rincon Ecuatoriano, Inc. , No. 15-CV-112, 2015 WL 7736551, at *1 (S.D.N.Y. Nov. 30, 2015) (citation omitted); see also Velasquez v. SAFI-G, Inc. , 137 F.Supp.3d 582, 584 (S.D.N.Y. 2015) (same).

When assessing a proposed settlement for fairness, there is generally "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) (citation and quotation marks omitted); see also Matheis v. NYPS, LLC , No. 13-CV-6682, 2016 WL 519089, at *1 (S.D.N.Y. Feb. 4, 2016) (same); Souza v. 65 St. Marks Bistro , No. 15-CV-327, 2015 WL 7271747, at *4 (S.D.N.Y. Nov. 6, 2015) (same); Martinez v. Hilton Hotels Corp. , No. 10-CV-7688, 2013 WL 4427917, at *1 (S.D.N.Y. Aug. 20, 2013) (same).

As a number of courts have recognized, although a court should consider the totality of the circumstances, the most significant factors include:

(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) (citation and quotation marks omitted); see also Zamora v. One Fifty Fifty Seven Corp. , No. 14-CV-8043, 2016 WL 1366653, at *1 (S.D.N.Y. Apr. 1, 2016) (same); Garcia v. Jambox, Inc. , No. 14-CV-3504, 2015 WL 2359502, at *2 (S.D.N.Y. Apr. 27, 2015) (same). Conversely, factors which weigh against finding a settlement fair and reasonable include:

(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 non-compliance 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.

Wolinsky , 900 F. Supp. 2d at 336 (citation and quotation marks omitted); see also Villalva-Estrada v. SXB Rest. Corp. , No. 14-CV-10011, 2016 WL 1275663, at *2 (S.D.N.Y. Mar. 31, 2016) (same); Garcia , 2015 WL 2359502, at *2 (same); Camacho v. Ess-A-Bagel, Inc. , No. 14-CV-2592, 2014 WL 6985633, at *2 (S.D.N.Y. Dec. 11, 2014) (same).

Making this determination "is thus an information intensive undertaking," Camacho , 2014 WL 6985633, at *2, and "the [P]arties must provide the [C]ourt with enough information to evaluate the bona fides of the dispute," Gaspar v. Pers. Touch Moving, Inc. , No. 13-CV-8187, 2015 WL 7871036, at *1 (S.D.N.Y. Dec. 3, 2015) (citation and quotation marks omitted).4 To this end, courts require information surrounding

the nature of [the] plaintiffs’ claims, ... the litigation and negotiation process, the employers’ potential exposure ... to [the] plaintiffs ..., the bases of estimates of [the] plaintiffs’ maximum possible recovery, the probability of [the] plaintiffs’ success on the merits, and evidence supporting any requested fee award.

Id. (first alteration in original) (quotation marks omitted) (quoting Nights of Cabiria, LLC , 96 F. Supp. 3d at 176 ).

B. Analysis
1. Whether Settlement Amount is Fair and Reasonable

Under the RSA, Defendants agree to pay Plaintiff a total sum of $20,000.00 (the "Settlement Amount"). (Feb. 12 Sabharwal Letter 1; RSA ¶ 1.) This amount reflects $10,000 in wages and $10,000 in liquidated damages. (RSA ¶ 1.) Plaintiff's counsel has agreed to waive his fees to facilitate approval of the RSA. (Feb. 12 Sabharwal Letter 7.)

a. Fluctuating Workweek Method

The Parties maintain that Plaintiff's overtime rate should be calculated using the Department of Labor's ("DOL") fluctuating workweek ("FWW") method, codified at 29 C.F.R. § 778.114. (Id. at 3.) "Under the [FLSA], an employee can only work a maximum of 40 hours in a given week, and if a worker's hours surpass that ceiling, the employer must pay for the additional hours at ‘a rate not less than one and one-half times the regular rate at which he is employed.’ " Stein v. Guardsmark,...

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