Richards v. City of New York

Background

The plaintiffs, Sherma Richards and others, brought this action against the City of New York under the Fair Labor Standards Act, a federal wage-and-hour law. On January 3, 2025, the court was informed that the parties had reached a settlement.

Under the Second Circuit’s decision in Cheeks v. Freeport Pancake House, Inc., a settlement of Fair Labor Standards Act claims that is dismissed under Rule 41 generally must be approved by the court or the U.S. Department of Labor. The court stated that it must examine whether the settlement and any proposed attorney’s fee award are fair.

Order

The court ordered the parties to submit the settlement agreement and a joint letter by January 31, 2025. The letter must explain why the proposed settlement is fair and reasonable, addressing the factors identified in Wolinsky v. Scholastic, Inc. If applicable, it must also address any incentive payment to the plaintiff and any attorney’s fee award to plaintiff’s counsel, with supporting documentation when appropriate.

The court reminded the parties that they could instead proceed through an offer of judgment under Rule 68(a), which the opinion states does not require judicial approval for resolution of Fair Labor Standards Act claims. The parties also could consent to proceed before the designated magistrate judge for all purposes, including settlement approval, and were required to file a fully executed consent form by January 22, 2025 if they chose that option.

Settlement Terms Identified by the Court

The court stated that it would not approve a settlement containing any of the following provisions unless the parties showed case-specific reasons supporting them:

- A confidentiality provision, unless justified by reasons sufficient to overcome the public’s common-law right of access to judicial documents. - A release or waiver of claims that had not accrued or claims unrelated to wage-and-hour matters. - A clause barring a plaintiff from making negative statements about the defendant without an exception for truthful statements about the plaintiff’s experience litigating the case, unless the parties justified the clause without that exception.

If the agreement contained any of those provisions, the parties’ letter also had to say whether they wanted the court to consider approving the agreement after striking the provisions. The court noted that it could approve or reject the agreement but could not modify it itself.

Disposition

Judge Jennifer H. Rearden ordered the additional settlement submissions and set out the conditions governing possible approval. The order did not approve or reject the settlement.