Toribio Esteban v. Taikai Inc

Background

The plaintiffs sued Taikai Inc. doing business as Momoya, Kwang Ho Lee, and Jennifer Lee under the Fair Labor Standards Act (FLSA). The court was advised that the parties had reached a settlement. The order does not state the settlement amount, describe its terms, or decide the merits of the plaintiffs’ claims.

Settlement-Approval Requirements

The court explained that an FLSA action may not be dismissed based on a settlement unless the settlement is approved either by the court or by the Department of Labor. To the extent the plaintiffs seek dismissal under Federal Rule of Civil Procedure 41, the plaintiffs or the parties jointly must, by July 23, 2025, either:

1. file a letter motion asking the court to approve the settlement, together with the settlement agreement; or 2. provide documentation showing that the Department of Labor approved the settlement.

The letter motion must explain why the proposed settlement is fair and reasonable. It must address the plaintiffs’ possible recovery, the burdens and expenses the settlement would avoid, the seriousness of the litigation risks, whether experienced counsel negotiated the agreement at arm’s length, and the possibility of fraud or collusion. It must also address whether there is a genuine dispute about the hours worked or compensation owed and state how much the plaintiffs’ attorneys seek in fees.

The court advised that the parties should give specific information about the possible recovery and litigation risks. It also stated that, absent special circumstances, it will not approve a settlement filed under seal or in redacted form. Absent compelling circumstances, it will not approve a settlement containing broad nondisclosure provisions or releases of claims unrelated to FLSA issues. The order also identifies restrictions on broad releases of entities beyond the defendants, successors and representatives, and wage claims beyond those at issue in the case.

Any request for attorneys’ fees must include contemporaneous billing records showing, for each attorney, the date, hours worked, and nature of the work.

Other Orders and Disposition

The parties may voluntarily consent to proceed before Magistrate Judge Robert W. Lehrburger for all further proceedings, including settlement approval. The order states that withholding consent will not have negative consequences. If the parties consent and the court approves the consent form, further proceedings will be conducted before Judge Lehrburger, and any appeal would go directly to the U.S. Court of Appeals for the Second Circuit.

The court ordered that any pending motions are moot, suspended all deadlines except those stated in the order, and vacated all conferences. Judge Analisa Torres did not grant or deny settlement approval; she required the parties to submit the required approval materials or Department of Labor documentation before seeking dismissal.