Commentary: Court rejects FSA settlement agreement and chastises lawyer for less than candid submissions

In a stinging rebuke to a Manhattan lawyer, United States District Court Judge Katherine Polk Failla rejected a proposed Fair Labor Standards Act settlement agreement because (a) the proposed attorneys' fee to be awarded to plaintiff's counsel was deemed to be excessive and (b) the proposed non-disparagement provision was deemed to be excessively restrictive.  The case is Galindo v. East County Louth, Inc., 16 cv 9149 (S.D.N.Y. Nov. 17, 2017).  On the fee issue, the Court held that both the proposed billing rate and hours billed were not acceptable.  She then laid into plaintiff's counsel, holding, in no uncertain terms, that he was at "fault" "for suggesting that courts in this District have specifically approved [the billing rate he proposed] — a position that is at best an inexcusable oversight and at worst an equally inexcusable misrepresentation."  Going on to call out the lawyer for having been "repeatedly warned by judges in this District not to misstate the decisions of other courts concerning his fee awards, particularly awards that are in fact based on a percentage-of-the-recovery basis," the judge turned down the proposed settlement agreement and reminded the lawyer of his obligation for litigation candor.  On a somewhat drier but equally important note, the Court held that because the non-disparagement clause did not contain a carve-out for honest statements about the employee's work conditions, it was not proper because it "effectively bar plaintiffs from making any negative statements about the defendants," which, the Court held, "cannot stand." Such clauses “must [at least] include a carve-out for truthful statements about plaintiffs’ experience litigating their case.”  For labor and employment lawyers, Galindo should be studied and kept top of mind for its substantive holdings.  But Galinodo also deserves much wider circulation and study:  it underscores the importance of attorney candor.  At the end of the day, of course, a lawyer must jealously guard his or her reputation for honesty and trustworthiness.  When a lawyer loses credibility in the eyes of the court, that lawyer loses effectiveness.  We have all made winning arguments and losing arguments.  Sometimes we prevail where we should not, and sometimes we lose cases we should have won.  But so long as we intend to go on to the next case, we must bear in mind our ethical, professional obligation to present the facts and the law to the court and make the best arguments we can -- based on the facts and the law as they exist, not as we would like them to exist.

Leave a Reply

Your email address will not be published. Required fields are marked *