Robinson v. Big Minds, Tiny Hands LLC

Background

The parties reported that they had reached an agreement in principle to settle their dispute at a November 7, 2024 settlement conference. They also indicated that they intended to consent to the magistrate judge’s jurisdiction for all remaining proceedings under 28 U.S.C. § 636(c).

The opinion discusses claims under the Fair Labor Standards Act (FLSA). In the Second Circuit, privately settled FLSA claims must either proceed through an offer of judgment under Federal Rule of Civil Procedure 68 or receive court approval. The parties reported that they intended to seek court approval.

Order

The court ordered the parties to submit a joint motion for settlement approval, with all supporting documents, no later than December 16, 2024. The submission must include:

- A joint letter explaining why the settlement is fair and reasonable under the totality of the circumstances and addressing the nine factors identified in Wolinsky v. Scholastic Inc.; - A written settlement agreement signed by all parties; and - Any counsel contingency-fee agreement, along with time and expense records needed to support a proposed award of attorneys’ fees and costs.

Settlement terms and fees

The court cautioned that confidentiality provisions are rarely appropriate in FLSA settlements because of the policy concerns underlying the statute. The court gave the same warning about non-disparagement provisions that would prevent plaintiffs from making truthful statements about their experience litigating the case.

The court also reminded the parties that courts in the district generally reject settlement terms preventing plaintiffs from having a future employment relationship with the defendant. It noted that courts frequently approve releases limited to wage-and-hour claims asserted or that could have been asserted in the action. General releases may be approved in appropriate circumstances when they are mutual, negotiated by competent counsel, and concern former employees with no continuing relationship with the employer.

The court stated that its fairness review includes attorneys’ fees and costs. Any proposed fee and cost award must be included in the written settlement agreement, signed by the parties, and supported by authenticated records. The supporting information must be sufficient to calculate the lodestar, meaning a fee estimate based on reasonable hours multiplied by reasonable hourly rates. Counsel must also substantiate costs with invoices, receipts, or a sworn statement about expenses incurred.

Disposition

The order required a future joint motion for approval and supporting materials. It did not itself approve or reject the settlement.