Gonzalez v. At Last Sportswear, Inc.

Background

The parties notified the court on March 24, 2025, that they had reached an agreement on all issues. The case involves claims under the Fair Labor Standards Act, a federal wage-and-hour law.

Settlement approval and dismissal with prejudice

The court ordered that the parties could not dismiss the action with prejudice based on their agreement unless the settlement was approved by either the court or the Department of Labor. If the parties wanted court approval, they had to file a joint letter motion and the settlement agreement on the public docket by April 24, 2025. Alternatively, they could provide documentation showing Department of Labor approval.

The court stated that the approval request had to explain why the proposed settlement was fair and reasonable. At a minimum, it had to address the plaintiff’s possible recovery; the burdens and expenses the parties would avoid through settlement; the risks of litigation; the length of negotiations between experienced counsel; and the possibility of fraud or collusion. It also had to address whether there was a genuine dispute about the hours worked or compensation owed and how much the plaintiff’s attorney would seek in fees.

The court also warned that it was unlikely to approve a settlement filed under seal or in redacted form without special circumstances. It was likewise unlikely to approve a general release, or a release of claims unrelated to the wage-and-hour claims under the Fair Labor Standards Act or related state laws, unless the parties explained why such a provision was appropriate. The court warned that failure to follow these instructions could lead to denial of the motion and sanctions against the attorneys.

Alternative dismissal without prejudice

The court noted that the Second Circuit had not decided whether parties may settle a Fair Labor Standards Act case without court or Department of Labor approval and then dismiss it without prejudice under Federal Rule of Civil Procedure 41(a)(1)(A). If the parties chose that route, they had to file a stipulation on the public docket within 30 days. The stipulation had to include an affirmation from the plaintiff’s counsel stating that Gonzalez had been clearly advised that the settlement would not prevent her 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 could allow the case to be reopened in the future.

Ruling and next steps

Judge Valerie Caproni canceled all previously scheduled conferences and other deadlines. If the parties filed neither a settlement-approval request nor the alternative stipulation by April 24, 2025, the court would hold a conference on April 25, 2025, at 10:00 a.m. The order did not approve the settlement and did not dismiss the action.