Lander v. Amigos Hospitality LLC

Background

The parties told the court on December 16, 2024, that they had reached a settlement in principle in this action under the Fair Labor Standards Act, a federal wage-and-hour law. They said they intended to submit their settlement papers within thirty days.

Order

The court ordered the parties to submit the settlement agreement and a joint letter by January 27, 2025. The letter must explain why the settlement should be approved as fair and reasonable if the parties plan to dismiss the case under Federal Rule of Civil Procedure 41. It must address the fairness factors identified in Wolinsky v. Scholastic, Inc. and, if applicable, any incentive payments to the plaintiffs and any attorney’s fee award to plaintiffs’ counsel. The parties must provide supporting documentation for the fee request when appropriate.

The court explained that a settlement of Fair Labor Standards Act claims followed by dismissal under Rule 41 generally requires court or Department of Labor approval. The parties may instead choose a Rule 68(a) offer of judgment, which the court said does not require judicial approval. They may also consent to proceed before the designated magistrate judge, who would then decide whether to approve the settlement.

Settlement Terms the Court Identified

The court stated that it would not approve a settlement containing a confidentiality provision unless the parties show case-specific reasons sufficient to overcome the public’s common-law right of access to judicial documents. It also would not approve a provision releasing or waiving claims that had not accrued or claims unrelated to wage-and-hour matters unless the parties provide case-specific justification. Finally, it would not approve a clause barring a plaintiff from making negative statements about a defendant unless the clause protects truthful statements about the plaintiff’s experience litigating the case or is otherwise specifically justified.

If a settlement contains one of these provisions, the parties must state whether they want the court to consider approving the agreement with the provision removed. The court noted that it may approve or reject the settlement but may not rewrite the agreement. Judge Jennifer H. Rearden issued the order; the order did not decide the underlying Fair Labor Standards Act claims or approve the settlement.