Vazquez v. Old Town Laundry Services Inc

Background

The court stated that Rene Vazquez, Old Town Laundry Services, Inc., and Indira Martinez had reached a settlement in a Fair Labor Standards Act case. Vazquez informed the court that he intended to continue prosecuting claims against Desyy Laundromat Inc., Fu Hao Laundromat Inc., Juan Velez, and Walter “Doe.” The order addressed the procedure for dismissing the claims against Old Town Laundry Services, Inc., and Indira Martinez; it did not decide the underlying wage claims.

Court’s analysis

The court explained that, under controlling appellate precedent, a Fair Labor Standards Act action cannot be dismissed based on a settlement unless the settlement is approved by the court or by the Department of Labor. A request for court approval must explain why the agreement is fair and reasonable. The court identified factors including the plaintiff’s possible recovery, the burdens and expenses the settlement would avoid, the seriousness of the parties’ litigation risks, whether experienced counsel negotiated at arm’s length, and the possibility of fraud or collusion.

The request must also address whether there is a genuine dispute about the hours worked or compensation owed and how much of the settlement, if any, the plaintiff’s attorney will seek as fees. The court stated that conclusory explanations are insufficient. It further stated that, absent special or compelling circumstances, it would not approve agreements filed under seal or in redacted form, containing sweeping nondisclosure provisions, or broadly releasing claims unrelated to the Fair Labor Standards Act. Any request for attorney’s fees must include contemporaneous billing records showing each attorney’s work dates, hours, and tasks.

Order and effect

Judge Analisa Torres directed Vazquez, or the parties jointly, to file a letter request for court approval together with the settlement agreement, or to provide documentation of Department of Labor approval, by February 23, 2025, if Vazquez seeks dismissal under Federal Rule of Civil Procedure 41. The order did not approve the settlement and did not dismiss the claims against Old Town Laundry Services, Inc., or Indira Martinez. The parties were also told they could consent to have Magistrate Judge Gary Stein oversee settlement approval; any consent had to be filed by February 6, 2025. The order stated that consent was voluntary and could be withheld without negative consequences.