Lowery v. Police Athletic League, Inc.

Background

The parties asked the court to approve their proposed settlement of Vincent Lowery’s claims under the Fair Labor Standards Act (FLSA), a federal wage-and-hour law. The settlement materials described two agreements: a Negotiated Settlement Agreement and Release resolving Lowery’s FLSA and New York Labor Law wage-and-hour claims, and a separate agreement resolving his wrongful-termination claim under the Family and Medical Leave Act (FMLA). The FMLA agreement was not attached to the parties’ submission.

Court’s analysis

Under the Second Circuit’s decision in Cheeks v. Freeport Pancake House Inc., a court reviewing an FLSA settlement must assess whether the agreement is fair and reasonable. The court explained that it must consider the existence of related state-law claims and the parties’ total potential recovery. Because the wage-and-hour claims were the main, or at least lead, claims in the complaint, and the parties provided no information about the relative economic significance of the wage claims and the FMLA claim or about the nonfinancial terms of the FMLA agreement, the court determined that it needed to review the separate agreement.

The parties’ submission stated that Lowery believed he was owed approximately $95,856 in unpaid overtime under the New York Labor Law’s six-year limitations period, including about $44,539 under the FLSA’s two-year limitations period for nonwillful violations. The court found it unclear whether the $95,856 figure included liquidated damages or represented only unpaid wages. It therefore required a more detailed explanation of the calculation and its components.

Order

The court directed the parties to submit the separate FMLA settlement agreement for review. The agreement could be submitted under seal if the parties wished. The court clarified that reviewing the agreement was not a separate approval of the fairness of the FMLA settlement; the purpose was to determine whether the FLSA settlement complied with the requirements of Cheeks. The court also directed Lowery to file a supplemental submission clarifying his total potential damages and explaining how he calculated them. The opinion does not state that the court approved or rejected the proposed FLSA settlement at this stage. The order was signed by Gary Stein, United States Magistrate Judge.