Rosario v. Majestic Restaurant Inc

Background

Rosarina Rosario brought an action for damages under the Fair Labor Standards Act, a federal law governing wages and working conditions. The parties consented to the magistrate judge’s authority to decide the case. They jointly asked the court to approve a fully executed settlement agreement.

Settlement Review

Federal courts must review proposed settlements in Fair Labor Standards Act cases to determine whether they are fair and reasonable and resulted from arm’s-length negotiations rather than employer overreaching. The court reviewed the settlement agreement, the parties’ joint letter, the attorney-retainer agreement, an invoice for service on the defendants, and a Spanish translation of the settlement agreement.

The court considered, among other things, prior proceedings in the case; the risks, burdens, and costs of continuing the litigation; the possible recovery; whether the agreement resulted from arm’s-length bargaining; the attorney fees; and the possibility of fraud or collusion. The court noted that the agreement contained no confidentiality restrictions, used a release narrowly tailored to wage-and-hour claims, and provided attorney fees within a fair, reasonable, and acceptable range.

Ruling

Judge Henry J. Ricardo found the settlement agreement fair and reasonable and approved it. Because the case was resolved by settlement, the court dismissed and discontinued it in its entirety, with prejudice, without costs or fees to any party except as provided in the settlement agreement. The court retained jurisdiction for the limited purpose of enforcing the settlement agreement and directed the Clerk of Court to terminate the motions and deadlines and close the case.