Calentine v. Nexus Point Strategies, LLC

Background

Magistrate Judge Ricardo reported that the parties had reached a settlement in this action under the Fair Labor Standards Act, a federal law governing certain wage and hour protections. The court explained that when parties seek to settle Fair Labor Standards Act claims through a 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.

Options for finalizing the settlement

The court gave the parties two options, both due by April 1, 2025:

1. They may submit the settlement agreement and a joint letter explaining the basis for the proposed settlement and why it is fair and reasonable. The letter must address the relevant fairness factors and, if applicable, any payment to the plaintiff beyond the settlement amount and any attorney’s fee award, with supporting documentation when appropriate. 2. They may consent to proceed before Magistrate Judge Ricardo for all purposes. If they do so, he would decide whether to approve the settlement.

The court noted that judicial approval is not required for a Fair Labor Standards Act settlement made through a Rule 68(a) offer of judgment.

Settlement provisions identified by the court

The court stated that it will not approve an agreement containing:

- a confidentiality provision, unless the parties show case-specific reasons sufficient to overcome the public’s common-law right of access to judicial documents; - a release or waiver covering claims that have not accrued or claims unrelated to wage-and-hour matters, unless the parties provide case-specific justification; or - a provision barring the plaintiff from making negative statements about a defendant without an exception for truthful statements about the plaintiff’s experience litigating the case, unless the parties provide case-specific justification.

If the agreement includes such a provision, the parties must say whether they want the court to consider approving the agreement with that provision removed. The court stated that, absent good cause, it would publicly file both the joint letter and the settlement agreement in that situation, notwithstanding a confidentiality provision. The court also explained that it may approve or reject the settlement but may not rewrite the agreement itself.

Disposition

The court did not approve or reject the settlement in this order. It set the two procedures for seeking approval and ordered that the conference scheduled for March 25, 2025, be adjourned without a new date. Judge Furman entered the order on March 20, 2025.