Labor & Employment Law Daily Wrap Up, WAGE-HOUR—CLASS ACTIONS—S.D.N.Y.: Court grants preliminary approval of $1.2 million settlement in collective action, (Aug 14, 2025)

By Ronald Miller, J.D.

The agreement treats class members equitably relative to each other, and this factor accordingly weighs in favor of preliminary approval.

A federal district court in New York granted preliminary approval of $1.2 million settlement in a collective and class action brought by hourly-paid employees of a paper processing plant. The employees alleged that they suffered unlawful wage deductions, uncompensated “off the clock” labor, and noncompliance with the NYLL’s wage statement requirements. The court found the agreement to be fair, reasonable, and adequate under Rule 23(e). Finally, the court scheduled a fairness hearing to consider whether the agreement should be finally approved as fair, reasonable, and adequate (Jackson v. Ampac Paper, LLC, No. 22 Civ. 3120 (NSR)(JCM) (S.D.N.Y. Aug. 13, 2025)).

The employees worked as hourly paid manual laborers at the employer’s paper processing plant. On April 15, 2022, they filed a collective and class action complaint alleging that they suffered various wage and hour violations, including unlawful wage deductions, uncompensated “off the clock” labor, and noncompliance with NYLL’s wage statement requirements.

On September 23, 2023, the court granted the employee’s motion for conditional certification of their FLSA claims as a collective action. Ultimately, 112 current and former hourly paid manual laborers in the employer’s converting department filed Consent to Sue forms in this case.

Settlement. On April 30, 2025, plaintiffs’ counsel advised the court that they had settled the matter in principle. On June 27, 2025, the parties filed a motion asking the court to: (1) grant preliminary approval of the agreement, among other requests.

The agreement creates a fund of $1,200,000 to settle this action. The class members will all receive a minimum of $50, while an “additional prorated portion shall be calculated based on plaintiffs’ counsel’s calculation of alleged damages owing to each individual during the [relevant period].” Based on the agreement, “all Participating Class Members will receive at least nearly 100% of what Plaintiffs’ [c]ounsel determined to be their owed wages based upon a review of Defendant’s time and pay records.”

For their contributions to the case, under the agreement, the named plaintiffs are entitled to service awards of up to $10,000, and the seven FLSA Opt-In Plaintiffs who participated in individualized discovery may apply for service awards of up to $3,000. The Agreement provides that class counsel is permitted to seek an award of up to $393,333 plus no more than $20,000 in costs. The $393,333 figure constitutes one third of the gross settlement after deduction of costs.

Class members who do not submit a timely and valid opt-out notice forever and fully release the employer from all wage and hour claims asserted under state and local law. Class members must timely inform the court if they seek to opt out of the settlement. The agreement also provides that a fairness hearing will be held at the court’s convenience.

Conditional settlement class certification. “Before approving a class settlement agreement, a district court must first determine whether the requirements for class certification in Rule 23(a) and (b) have been satisfied.” After considering Rule 23(e) and the corresponding Grinnell factors, the court found that they all favor preliminary approval of the agreement.

Adequacy of representation. Here, the named plaintiffs’ interests are not antagonistic to the class. They have suffered the same alleged injury as the class members. Furthermore, the record shows that the named plaintiffs have been actively engaged with this litigation from before commencement of the action through discovery and vigorously participated in mediation to resolve the claims on a class-wide basis. In addition, plaintiffs’ counsel has established that they have the necessary experience and qualifications and have effectively managed this litigation. Therefore, this factor weighs in favor of approval.

Arm’s-length negotiations. The court found that the proposed agreement was negotiated at arms’ length. Counsel thoroughly reviewed the relevant hours and pay data for the class members, assessed the litigation risks, and navigated the settlement with two neutral third-party mediators’ assistance. Thus, this factor also supports preliminary approval.

Adequacy of relief. To assess whether the agreement provides adequate relief to the settlement class, the courts consider: “(i) the costs, risks, and delay of trial and appeal; (ii) the effectiveness of any proposed method of distributing relief to the class … ; (iii) the terms of any proposed award of attorney’s fees, including timing of payment; and (iv) any agreement required to be identified under Rule 23(e)(3).” The last factor does not apply here.

Had this case not settled, trial of this matter would have been complicated, lengthy, and expensive. The agreement provides that each class member will receive at least $50, plus his or her pro rata share as calculated by counsel. The parties have also agreed that plaintiffs will select a settlement administrator tasked with locating class members and providing notice. The court considered this process efficient, effective, and equitable, which weighed in favor of approval.

The third factor set out in Rule 23(e)(2)(C)(iii) contemplates that before final approval, the court will “review Plaintiffs’ application for attorneys’ fees, taking into account the interests of the class.” Here, the agreement provides that at the fairness hearing, class counsel will seek an award of attorneys’ fees in the amount of $393,333, costs of settlement administration of no more than $25,000, and other costs of no more than $20,000. This is approximately 33 percent of the total settlement, which is consistent with fee awards in other wage and hour class action settlements in the Second Circuit. This third factor does not preclude preliminary approval of the agreement.

Equitable treatment. Under Rule 23(e)(2)(D), the court must also consider whether class members are subject to equitable treatment under the agreement. To determine this, the court may consider “whether the apportionment of relief among class members takes appropriate account of the differences among their claims, and whether the scope of the release may affect class members in different ways that bear on the apportionment of relief.”

Other than the service awards sought for the named plaintiffs and some designated Opt-In Plaintiffs, the agreement treats all class members uniformly. The court found that the service awards offered in the agreement were appropriate in light of the work that the named plaintiffs and certain Opt-In Plaintiffs have contributed to this case, which ultimately resulted in settlement. Further, class members will receive at least nearly 100% of what plaintiffs’ counsel determines are their owed wages.

Thus, the agreement treats class members equitably relative to each other, and this factor accordingly weighs in favor of preliminary approval.

Certification of settlement class. For settlement purposes, plaintiffs seek to certify a class of all individuals who were employed by the employer at any point as non-exempt, hourly converting department employees at its manufacturing facility from April 15, 2016, through July 31, 2024.

The court found that the Rule 23 class satisfied Rule 23(a)’s requirements of numerosity, commonality, typicality, and adequacy of representation. First, the Rule 23 class has 744

Members, which satisfied the Rule 23(a) numerosity requirement. Regarding commonality, the primary issues in this case are common to the class. The typicality requirement is also satisfied because the Named Plaintiffs’ claims “[arose] from the same factual and legal circumstances that form the bases of the [Rule 23 Class’s] claims.” Specifically, the class members all contend that the employer regularly failed to pay them for minutes worked at the start and end of their shifts. Finally, relating to adequacy, the named plaintiffs’ interests are not antagonistic to that of the class, and they have been actively involved in the litigation from its inception.

Rule 23(b) requirements. The settlement class also satisfied the Rule 23(b)(3) predominance and superiority requirements. The court agreed with plaintiffs that the predominance requirement was met because the case concerned wage and hour policies that affected multiple class members, and the class members shared a common legal theory that these policies violated the law. Further, the court agreed that class action is a superior method here, because the class members were primarily low-wage immigrant workers who worked for the employer for brief periods of time and speak little English.

Thus, the court found that the Rule 23(a) and 23(b)(3) factors were met and granted

Provisional certification of the class.

The case is No. 22 Civ. 3120 (NSR)(JCM).

Judge: McCarthy, J.

Attorneys: Patricia Coyle Kakalec (Law Offices of Patricia Coyle Kakalec) for Noemy Jackson, Raymundo Gallardo, and Roberto Perez. Vincent E. Polsinelli (Nixon Peabody) for Ampac Paper, LLC.

Companies: Ampac Paper, LLC

Cases: WageHour ClassActions Overtime MinimumWage WorkingTime Procedure NewYorkNews