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Bronx Co-Op Owners Strike $6.5M Deal To End FLSA Claims

Bronx Co-Op Owners Strike $6.5M Deal To End FLSA Claims
February 3, 2015 lsadmin

By Natalie Rodriguez – Read Full Story

Law360, New York (February 03, 2015, 7:16 PM ET) — A New York federal judge on Tuesday gave a preliminary nod to a $6.5 million settlementbetween the owners and operators of a Bronx housing cooperative and hourly employees that alleged in a class action that they had not been properly paid for work or overtime.

U.S. District Judge John G. Koeltl granted preliminary approval to the deal, which would put to bed a more than year-long litigation of Fair Labor Standards Act and New York Labor Law claims lodged by current and former hourly paid employees of property manager Riverbay Corp. He also directed the dissemination of notice to the class and set a date for a fairness hearing.

“Based on [its] review, the court concludes that the settlement is within the range of possible settlement approval such that notice to the settlementclass is appropriate … As to the plan of allocation, the court finds that the proposed plan is rationally related to the relative strengths and weaknesses of the respective claims asserted,” the judge said.

Per the deal, Riverbay — which continues to deny any liability or wrongdoing — will deposit the funds in an interest-bearing escrow account in a series of installments from Feb. 10 to Sept. 1. A fairness hearing, where final approval of the settlement could be granted, is penciled in for May 15, according to court documents.

“We are pleased that we were able to achieve such a strong settlement for the class,” Louis Ginsberg of The Law Firm of Louis Ginsberg PC, an attorney for the class, told Law360.

The lead plaintiffs in the case had lobbed their suit in April 2013 against Riverbay, which manages a housing cooperative in the Northeast Bronx known as Co-op City, and Marion Scott Real Estate Inc., which the employees contended was a joint employer since it is the exclusive manager for Riverbay’s residential and commercial space. Peter Merola and Vernon Cooper were added as individual defendants in an amended complaint, according to court documents.

Plaintiffs alleged that the defendants paid hourly employees according to their scheduled hours, rather than hours worked, and offered time off in lieu of overtime payments, according to court documents. They also contend the defendants failed to pay time and a half for nighttime work.

“We believe this is an excellent result for employees of Riverbay that should provide them with meaningful compensation for lost wages,” Lee S. Shalov of McLaughlin & Stern LLP, an attorney for the class, told Law360.

The settlement covers workers employed by Riverbay between April 9, 2007, and Feb. 2, 2015 — which is estimated to be about 1,700 employees, according to Shalov.

Defendants, however, have denied the allegations and contend that they have complied with the FLSA and state wage and hour laws. They had asked the U.S. Court of Appeals for the Second Circuit to reverse the class certification ruling, as well as revive a motion to dismiss and get partial summary judgment, but the appeals court denied those petitions without prejudice.

“Defendants enter the settlement solely to avoid the continued costs and time associated with litigation,” according to court documents.

Counsel for the defendants could not immediately be reached for comment late Tuesday.

The class is represented by Lee S. Shalov of McLaughlin & Stern LLP and Louis Ginsberg of The Law Firm of Louis Ginsberg PC.

The defendants are represented by Christopher A. Smith, Jonathan M. Bardavid and Scott P. Trivella of Trivella & Forte LLP.

The suit is Rosaly Ramirez, et al., v. Riverbay Corp., et al, case number 1:13-cv-02367-JGK-GWG, filed in the U.S. District Court for the Southern District of New York.

–Editing by Kelly Duncan.