Court Approves $342,500 Settlement On Behalf of 82 Tipped Food Service Workers

In Surdu v. Madison Global, LLC, the Court approved a $342,500 settlement on behalf of approximately 82 current and former employees of Nello Restaurant, who had worked as servers, bussers, runners and bartenders. See No. 15-CIV-6567 (HBP) (S.D.N.Y. Sept. 1, 2017). The plaintiffs alleged violations of the FLSA and NYLL arising from allegedly unpaid minimum wages, misappropriated gratuities, uniform purchase and maintenance costs, and inaccurate wage statements.

After conditionally certifying a Rule 23 class for purposes of settlement, the Court addressed the “Grinnell” factors to assess whether the settlement was substantively fair, reasonable and adequate. Thus, the Court considered: (1) the complexity, expense and likely duration of the litigation; (2) the reaction of the class to the settlement; (3) the stage of the proceedings and the amount of discovery completed; (4) the risks of establishing liability; (5) the risks of establishing damages; (6) the risks of maintaining the class action through the trial; (7) the ability of the defendants to withstand a greater judgment; (8) the range of reasonableness of the settlement fund in light of the best possible recovery; (9) the range of reasonableness of the settlement fund to a possible recovery in light of all the attendant risks of litigation.

The Court found each of these factors satisfied. Of note, the Court found that it was reasonable for the class members to receive approximately 50% of their claimed misappropriated tips after service awards, attorneys’ fees, and costs were deduced from the gross settlement amount. The Court also found service awards in the amount $8,500 for each Named Plaintiff and attorneys’ fees in the amount of $114,166.66 to be reasonable.

This post was written by Brian D. Murphy of Sheppard Mullin Richter & Hampton LLP, Copyright © 2017
For more Labor & Employment legal analysis go to The National Law Review

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