Ali v. Quick Stop Deli and Convenience, Inc.

Background

Hussain Ali and Prakash Bachani sued Quick Stop Deli and Convenience, Inc., doing business as Quick Stop Deli and Convenience, and Harjinder Singh. The parties reported that they had settled their dispute, including claims under the Fair Labor Standards Act, a federal law governing wages and working hours.

Order

The court ordered the parties to submit a joint motion by January 10, 2025, identifying which of two procedures they would use. They could file a notice accepting an offer of judgment under Federal Rule of Civil Procedure 68, or they could ask the court to approve the settlement under the Second Circuit’s requirements for private settlements of Fair Labor Standards Act claims.

If the parties sought court approval, the court required them to submit a joint letter explaining why the settlement was fair and reasonable under all the circumstances, addressing the nine factors identified in the cited case law; a written settlement agreement signed by all parties; and, when needed to support attorneys’ fees and costs, counsel’s contingency-fee agreement and time and expense records.

Settlement Terms and Fees

The court cautioned that confidentiality provisions are rarely appropriate in wage-and-hour settlements. It also noted that a non-disparagement provision may be improper if it prevents plaintiffs from making truthful statements about their experience litigating the case. The court warned that provisions preventing plaintiffs from having a future employment relationship with the defendants are generally rejected. It further reminded the parties that releases are commonly limited to wage-and-hour claims and related claims, although a mutual general release may be approved in appropriate circumstances.

The court stated that its fairness review includes attorneys’ fees and costs. Any proposed award had to be included in the signed settlement agreement and supported by properly authenticated fee and expense records. The information had to support a lodestar calculation, which estimates reasonable fees by multiplying reasonable hours by reasonable hourly rates. Plaintiffs’ counsel also had to support requested costs with invoices, receipts, or a sworn statement.

Disposition

This order did not approve or reject the settlement. It ordered the parties to submit the required joint motion and supporting materials by the stated deadline.