Rivera v. Barberry Rose Management Company Inc.

Background

The action was brought under the Fair Labor Standards Act (FLSA), 29 U.S.C. § 201 et seq. The court was informed that the parties had reached a settlement in principle. The order explains that an employer violating the overtime-pay requirement may owe unpaid overtime compensation plus an equal amount as liquidated damages.

Court’s analysis

The court explained that a proposed settlement of FLSA claims, including any proposed award of attorney’s fees, must be reviewed for fairness if the parties seek settlement and dismissal under Rule 41 of the Federal Rules of Civil Procedure. The parties were ordered to submit the settlement agreement and a joint letter by July 11, 2025. The letter must explain the basis for the proposed settlement and why any proposed Rule 41 dismissal should be approved as fair and reasonable. It must also address any incentive payment to Rivera and any attorney’s-fee award to Rivera’s counsel, with supporting documentation when appropriate.

The parties could instead proceed through a Rule 68(a) offer of judgment, which the order states does not require judicial approval for resolution of FLSA claims. They were also given the option to consent to proceed before the designated Magistrate Judge for all purposes, including settlement approval, and were told to file a fully executed consent form by July 7, 2025 if all parties agreed.

Settlement provisions addressed by the order

The court stated that it would not approve a settlement containing a confidentiality provision unless the parties showed case-specific reasons sufficient to overcome the common-law right of public access to judicial documents. It also would not approve a release or waiver covering claims that had not accrued or claims unrelated to wage-and-hour matters unless the parties provided case-specific justification for that broad release.

The court further stated that it would not approve a clause barring Rivera from making negative statements about a defendant unless the clause included an exception for truthful statements about Rivera’s experience litigating the case, or the parties provided case-specific reasons justifying the clause without that exception. If the agreement contained any of these provisions, the parties’ letter had to state whether they wanted the court to consider approving the agreement with those provisions removed. The order noted that the court could approve or reject the agreement but could not modify it itself.

Ruling and effect

Judge Jennifer H. Rearden ordered the parties to submit the settlement materials and directed the Clerk of Court to terminate ECF No. 26. The court did not approve or reject the settlement in this order.