Park v. Hanpool, Inc.

Background

The plaintiffs are Andrew Park, Celeste Vargas, Alfredo Larios Salvador, and Wilmer Adolfo Larios Salvador, individually and on behalf of all other similarly situated. They sued Hanpool, Inc., Gam Mee Ok, Inc., and Hyung K. Choi on claims under the Fair Labor Standards Act (FLSA). On March 6, 2025, the court was notified that the parties had reached an agreement on all issues through the magistrate judge.

Order concerning settlement and dismissal

The court ordered that the parties could not dismiss the action with prejudice based on their agreement unless the settlement agreement was approved by either the court or the Department of Labor. If they wanted court approval, they had to file a joint letter motion and the settlement agreement on the public docket by April 6, 2025. The motion had to explain why the proposed settlement was fair and reasonable, including:

- the plaintiffs’ possible range of recovery; - the burdens and expenses the settlement would avoid; - the seriousness of the litigation risks; - whether experienced counsel negotiated at arm’s length; and - the possibility of fraud or collusion.

The motion also had to address whether a genuine dispute existed about the number of hours worked or the compensation owed, and how much the plaintiffs’ attorney would seek in fees. The court stated that, absent special circumstances, it would not approve a settlement filed under seal or in redacted form.

The court advised that it was unlikely to approve a general release, or a release of claims not raised in the complaint and unrelated to FLSA or related state wage-and-hour claims. If the parties believed unusual circumstances justified a broader release, their joint motion had to explain why. The order stated that failure to do so would likely result in summary denial of the motion and could also result in sanctions against the attorneys.

Alternative dismissal without prejudice

The court noted that the Second Circuit had not decided whether an FLSA case could be settled without court or Department of Labor approval and dismissed without prejudice under Federal Rule of Civil Procedure 41(a)(1)(A). If the parties chose that route, they had to file the required stipulation on the public docket within 30 days. The stipulation had to include an affirmation from plaintiffs’ counsel stating that the plaintiffs had been clearly advised that the settlement would not prevent them from filing another lawsuit against the same defendants and affirming that the settlement agreement contained no release of the defendants. The court warned that this option carried the risk that the case could later be reopened.

Disposition

Judge Valerie Caproni ordered the parties to use one of these filing options by April 6, 2025. If they filed neither a settlement-approval request nor the required stipulation, the court ordered that a conference would be held on April 10, 2025, at 10:00 a.m. in Courtroom 443 of the Thurgood Marshall U.S. Courthouse.