Sultana v. NYC 121 Foods Inc

Background

The parties advised the court that they had reached a settlement. The opinion concerns claims under the Fair Labor Standards Act (FLSA). The court stated that judicial approval is required for an FLSA settlement when dismissal under Rule 41 of the Federal Rules of Civil Procedure is contemplated. The order did not approve the settlement because the parties had not yet submitted the agreement and required supporting explanation.

Required submissions

The court ordered the parties to submit the settlement agreement and a joint letter by April 4, 2025. The letter must explain the basis for the proposed settlement and why the settlement should be approved as fair and reasonable, referring to the factors identified in Wolinsky. It must also address any incentive payment to the plaintiff and any attorney’s fee award to the plaintiff’s counsel, including supporting documentation when appropriate.

The parties may consent to proceed for all purposes before the assigned magistrate judge. If all parties consent, they must file a fully executed consent form by April 4, 2025, and the magistrate judge would decide whether to approve the settlement.

Settlement provisions addressed by the court

The court advised 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. It also will not approve a provision releasing or waiving claims that have not accrued or claims unrelated to wage-and-hour matters unless the parties provide case-specific justification for that broad release.

The court further stated that it will not approve a clause barring the plaintiff from making negative statements about a defendant unless the clause allows truthful statements about the plaintiff’s experience litigating the case, or the parties provide case-specific justification for omitting that protection. If the agreement contains any of these provisions, the parties must say whether they want the court to consider approving the agreement with those provisions removed. The court noted that it may approve or reject an FLSA settlement but may not rewrite the agreement itself. The court also adjourned all pending deadlines until further order.

Disposition

Judge Arun Subramanian ordered the parties to submit the settlement materials and supporting letter by April 4, 2025, or to file a consent form allowing the magistrate judge to decide approval. The order did not state that the settlement was approved or that the case was dismissed.