Burgos v. Northeast Logistics, Inc.

Burgos v. Northeast Logistics, Inc.

Opinion

REPORT AND RECOMMENDATION

POLLAK, United States Magistrate Judge:

On December 1, 2015, Kelvin Burgos, Pedro Acosta, Claudia Duque, Yendy Dominguez, and Rafael Morel, on behalf of themselves and others similarly situated (collectively, "plaintiffs"), commenced this action against Northeast Logistics (d.b.a. Diligent Delivery Systems) ("Diligent"), Jerry Curcio, and Larry Browne (collectively, [*2]  "defendants"), alleging violations of the Fair Labor Standards Act ("FLSA") and the New York Labor Law ("NYLL"). Between February 3, 2016 and September 13, 2016, three additional plaintiffs filed notices of consent to join this collective action.¹

On March 18, 2016, defendants filed a motion to dismiss plaintiffs' complaint and to compel arbitration, citing an arbitration clause in a contract that each plaintiff signed with Diligent.

On March 30, 2017, the Honorable Carol B. Amon granted defendants' motion to compel arbitration with respect to the named defendants, but denied defendants' motion to dismiss. (Order² at 1, 13). The court stayed the matter pending the outcome of arbitration. (Id.)

On October 6, 2017, the parties notified the court that they had reached a settlement. Judge Amon referred review of the proposed Settlement Agreement ("Settlement Agreement" or "Agreement") to the undersigned on October 6, 2017, and the parties filed the fully executed Settlement Agreement for the Court's review on October 9, 2017. (Agmt³). On December 15, 2017, the parties submitted a letter to the Court, requesting the Court's approval of the Settlement Agreement. (Ltr⁴).

In light of the Second Circuit's [*3]  decision in Cheeks v. Freeport Pancake House, courts are required to approve the fairness of settlements of claims brought under the FLSA. 796 F.3d 199, 206 (2d Cir. 2015); see also D.A. Schulte, Inc. v. Gangi, 328 U.S. 108, 113, 66 S. Ct. 925, 90 L. Ed. 1114 (1947).

On December 21, 2017, a fairness hearing was held before the undersigned. For the reasons set forth below, the Court respectfully recommends that the parties' proposed settlement be denied without prejudice to resubmit the Agreement with the changes outlined below.

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