DePuy v. KURMAN

Background

The parties advised the court that they had reached a resolution in principle. Because the case included claims under the Fair Labor Standards Act (FLSA), the court had previously directed them to submit the settlement agreement and information needed for judicial review. Under binding Second Circuit precedent cited by the court, a district court must review and approve stipulated dismissals of FLSA claims when the claims are being dismissed with prejudice.

The parties did not submit the required materials. After the court issued an order requiring them to show why the case should not be dismissed or otherwise proceed, they filed a stipulation of voluntary dismissal under Federal Rule of Civil Procedure 41(a)(1)(A)(ii). The stipulation sought to dismiss with prejudice all FLSA claims and claims under other wage-related statutes. It stated that no part of the monetary settlement was allocated to alleged FLSA damages because, according to the parties, the evidence showed no FLSA violation. It also stated that Depuy wanted her FLSA and Equal Pay claims dismissed with prejudice without monetary compensation because she agreed, after reviewing pay evidence, that she had been paid equally.

Court’s Action

The court explained that the parties could not avoid the required FLSA review merely by stating that the FLSA claims were not settled. The parties had proposed dismissing those claims with prejudice, had not submitted the settlement agreement, and had not provided authority supporting their approach.

Judge Mary Kay Vyskocil ordered the parties, within two weeks, to file a letter identifying any binding legal authority supporting the proposed dismissal or, if none existed, explaining how they would proceed consistently with Second Circuit precedent. The court identified three options: (1) submit materials for judicial approval under the required FLSA review; (2) file a Rule 41 stipulation dismissing the FLSA claims without prejudice and certifying that those claims had not been settled; or (3) use an offer of judgment under Federal Rule of Civil Procedure 68. The court warned that failure to comply with its orders or applicable rules could result in sanctions, including monetary penalties, dismissal or preclusion of claims or defenses, or limits on arguments or evidence. The opinion does not state that the court approved or rejected the parties’ proposed stipulation as a final disposition of the action.