Hayes v. 355 Restaurant Group LLC

Background

The action was brought under the Fair Labor Standards Act, a federal law governing wage and hour requirements. On February 26, 2025, Plaintiff Kayleigh Hayes and Defendants MSB Hospitality LLC and Martin Borkan, referred to as the “MSB Defendants,” informed the court that they had reached a settlement in principle. They said they intended to submit settlement papers by March 3, 2025.

Court’s Instructions

The court explained that if the parties seek dismissal under Rule 41 of the Federal Rules of Civil Procedure, the court must review the settlement—including any proposed attorney’s fee award—to determine whether it is fair. The court ordered Hayes and the MSB Defendants to submit the settlement agreement and a joint letter by March 3, 2025. The letter must explain why the proposed settlement should be approved as fair and reasonable, address the fairness factors identified in the cited authority, and address any incentive payment to Hayes or attorney’s fee award to her counsel. Supporting documentation for fees should be included when appropriate.

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 court documents. It also 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 broad language with case-specific reasons. A non-disparagement clause would not be approved if it barred negative statements without allowing truthful statements about the plaintiff’s experience litigating the case, unless the parties provided case-specific reasons for omitting that protection.

The court advised that, if the agreement contained any of those provisions, the joint letter should say whether the parties wanted the court to consider approving the agreement with the provisions removed. The court noted that, absent good cause, doing so would result in the joint letter and settlement agreement being placed on the public docket, notwithstanding a confidentiality provision. The court also noted that the parties could instead use a Rule 68(a) offer of judgment, which would not require judicial approval. Judge Jennifer H. Rearden issued these settlement instructions; the opinion did not decide the merits of Hayes’s wage claims or approve a settlement.