Marshall v. BMW of Manhattan, Inc.

Background The action was brought under the Fair Labor Standards Act, a federal wage-and-hour law. On January 28, 2025, the court was informed that the parties had reached a settlement in principle and were preparing settlement papers.

Court’s instructions The court explained that, if the parties settle and seek dismissal under Federal Rule of Civil Procedure 41, the court must review the settlement—including any proposed attorney’s fee award—to determine whether it is fair. By February 15, 2025, the parties must submit the settlement agreement and a joint letter explaining the basis for the proposed settlement. The letter must address the fairness and reasonableness of any proposed dismissal, using the factors identified in the cited case law, and must address any incentive payments and attorney’s fee award, with supporting documentation for fees when appropriate.

The court also noted that the parties could resolve the Fair Labor Standards Act claims through a Rule 68(a) offer of judgment, which the cited authority says does not require judicial approval. The parties could also consent to proceed for all purposes before the designated Magistrate Judge; if they chose that option, they had to file the completed consent form by February 8, 2025.

Settlement provisions identified by the court The court stated that it would not approve a settlement containing a confidentiality provision unless the parties showed case-specific reasons sufficient to overcome the public’s common-law right of access to judicial documents. It likewise would not approve a release or waiver covering claims that had not accrued or claims unrelated to wage-and-hour matters unless the parties justified that breadth with case-specific reasons. The court also addressed non-disparagement provisions that bar a plaintiff from making negative statements about the defendant, requiring a carve-out for truthful statements about the plaintiff’s experience litigating the case unless the parties provided sufficient case-specific justification.

If the agreement contained any of those provisions, the parties’ joint letter had to say whether they wanted the court to consider approving the agreement with the provisions removed. The court noted that it may approve or reject an agreement but may not modify it.

Disposition Judge Rearden ordered the parties to submit the settlement materials and joint letter. The order did not approve or reject the proposed settlement and did not decide the underlying wage-and-hour claims.