Varona v. New Age Lounge, Inc.

Background

Charmaine Varona brought this action under the Fair Labor Standards Act, a federal wage-and-hour law, against New Age Lounge, Inc., and other defendants. The court was advised that the parties had reached a settlement in principle. The proceedings had been stayed, meaning paused.

Order

The court lifted the stay. It ordered the parties, by June 13, 2025, to submit the settlement agreement and a joint letter explaining the basis for the proposed settlement and why a dismissal under Rule 41 of the Federal Rules of Civil Procedure should be approved as fair and reasonable. The submission must address any incentive payment to Varona and any attorney’s fee award to her counsel, with supporting documentation when appropriate.

The court explained that a settlement and dismissal of Fair Labor Standards Act claims generally requires court or Department of Labor approval. It also noted that court approval is not required for a Fair Labor Standards Act settlement made through a Rule 68 offer of judgment. If the parties intend to use an offer of judgment, they must notify the court and provide appropriate documentation by June 13, 2025.

Settlement provisions identified by the court

The court advised that it will not approve a settlement 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 likewise will not approve 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. The court also identified non-disparagement provisions that bar negative statements about a defendant without an exception for truthful statements about the plaintiff’s litigation experience, unless specifically justified.

If the agreement contains any of those provisions, the parties must state whether they want the court to consider approval after striking the provision or provisions. The court noted that it may approve or reject the settlement but may not rewrite the agreement. The parties were also reminded that they may consent to proceed for all purposes before the assigned magistrate judge, who would then decide whether to approve the settlement. All other pending dates and deadlines were adjourned indefinitely.

Disposition

Judge Margaret M. Garnett lifted the stay and ordered the settlement-related submissions described above. The court did not approve the settlement in this order.