Melman v. Daisy, Inc.

Background

The court was advised that Michelle Melman and Daisy, Inc. had reached a settlement in an action under the Fair Labor Standards Act, a federal law governing matters including wages and overtime. The order does not describe the underlying claims, the settlement amount, or the settlement’s terms.

Settlement-approval requirements

The court stated that an Fair Labor Standards Act action cannot be dismissed based on a settlement unless the settlement is approved by the court or the Department of Labor. To the extent Melman sought dismissal under Federal Rule of Civil Procedure 41, she or the parties jointly had to file one of the following by September 1, 2025:

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

The letter motion had to explain why the proposed settlement was fair and reasonable. It had to address at least the plaintiff’s possible recovery; the burdens and expenses the settlement would avoid; the seriousness of the litigation risks; whether the agreement resulted from arm’s-length bargaining between experienced counsel; and the possibility of fraud or collusion. It also had to address whether a genuine dispute existed about the hours worked or compensation owed and how much of the settlement, if any, Melman’s attorney would seek as fees. The court instructed the parties to provide specific information rather than conclusory statements.

The court stated that, absent special circumstances, it would not approve an agreement filed under seal or in redacted form. Absent compelling circumstances, it also would not approve sweeping nondisclosure provisions or releases covering claims unrelated to the Fair Labor Standards Act issues. The order identified concerns about releases covering entities beyond the defendant, binding Melman’s successors or representatives, or releasing wage claims broader than those involved in this case. Any attorney-fee request had to include contemporaneous billing records showing, for each attorney, the date, hours worked, and nature of the work.

Ruling and case status

Judge Analisa Torres did not approve or reject the settlement in this order. Instead, she required the parties to seek court approval or provide Department of Labor approval before dismissal could proceed. The parties could voluntarily consent to proceed before Magistrate Judge Valerie Figueredo, who would then oversee settlement approval; withholding consent would not have negative consequences. Any such consent had to be filed by September 1, 2025. The order stated that any appeal would go directly to the United States Court of Appeals for the Second Circuit.

The court stated that any pending motions were moot, suspended all deadlines other than those set in the order, and vacated all conferences.