Fleming v. NADAP, Inc.

Background

Vallyn Fleming and the defendants filed a joint motion seeking approval of a settlement in Fleming’s Fair Labor Standards Act (FLSA) case. The submitted Settlement Agreement resolved Fleming’s wage-and-hour claims. The parties also reached a separate, confidential agreement concerning Fleming’s discrimination, retaliation, and aiding-and-abetting claims, but they did not submit that agreement for judicial review.

The court explained that parties generally may not privately settle FLSA claims and dismiss the case without approval from the court or the Department of Labor. Without Department of Labor approval, the court had to determine whether the submitted settlement was fair and reasonable.

Court’s Analysis

The court held that it could review the FLSA-related agreement without reviewing the separate agreement covering the non-wage-and-hour claims. The parties represented that the separate agreement did not release Fleming’s wage-and-hour claims and that the submitted agreement was the only agreement addressing those claims. The court found no basis to conclude that the separate agreement was being used to avoid the legal limits on FLSA settlements.

Fleming stated that her possible recovery for unpaid wages was $9,379.54. The Settlement Agreement provided $9,000, less $3,000 in attorneys’ fees and expenses, resulting in an actual recovery of $6,000, or 63.969% of the stated possible recovery. The court found that amount reasonable in light of the disputed facts, litigation risks, mediation, and the expense the parties could have incurred through further litigation.

The court also found no indication of fraud or collusion and concluded that the agreement resulted from arm’s-length bargaining between experienced counsel. It approved the release because it was limited to FLSA and other wage-related claims based on conduct occurring through the date Fleming signed the agreement. The court also found the other settlement provisions acceptable because the agreement did not contain a confidentiality clause contrary to the FLSA’s remedial purposes or a non-disparagement clause.

The requested $3,000 in attorneys’ fees and expenses equaled one-third of Fleming’s total recovery. Although counsel’s hourly rate and billing records raised issues when compared with the lodestar—the reasonable hourly rate multiplied by reasonable hours—the court found the requested amount reasonable under the percentage-of-the-fund approach.

Disposition

The court GRANTED the parties’ joint motion seeking approval of the Settlement Agreement and APPROVED the agreement as fair and reasonable. Fleming’s Seventh, Eighth, and Ninth causes of action—unequal pay under the New York Equal Pay Act, unpaid overtime under the FLSA, and unpaid overtime under the New York Labor Law and related regulations—were DISMISSED with prejudice under Federal Rule of Civil Procedure 41(a). The court retained jurisdiction over those causes of action solely to enforce the Settlement Agreement.

The First through Sixth causes of action, concerning discrimination, retaliation, and aiding and abetting discrimination and retaliation, remained unaffected. The court stated that it was not expressing an opinion on those claims or on the separate agreement resolving them.