Miguel Angel De Lancer v. The Morgan Group LLC, et al.

Background

Miguel Angel De Lancer filed a notice of voluntary dismissal under Federal Rule of Civil Procedure 41(a)(1)(A)(i). The notice concerned his claims against 1240 Sherman Ave. Bronx LLC; 600 Trinity Avenue, LLC; JLP Metro Management, Inc.; Denali Management, LLC; and David Tennenbaum, which the order collectively calls the “Voluntary Dismissal Defendants.” The case asserts claims under the Fair Labor Standards Act, a federal law governing certain minimum-wage, overtime, and related employment protections.

Settlement-review requirement

The court explained that parties may not privately settle Fair Labor Standards Act claims without approval from the district court or the Department of Labor. If the parties had reached a settlement, the court would have to determine whether it was fair and reasonable. The court identified five relevant considerations: the plaintiff’s possible recovery; the burdens and costs the settlement would avoid; the parties’ litigation risks; whether experienced counsel negotiated at arm’s length; and the possibility of fraud or collusion. The court also stated that attorney’s fees must be assessed separately and supported by factual evidence.

Order

The court ordered the parties, within 30 days, to notify it whether the plaintiff and the Voluntary Dismissal Defendants had reached a settlement agreement. If they had, the parties had to provide the settlement terms and a joint letter of no more than five pages explaining why the agreement was a fair and reasonable compromise, including information concerning the five identified factors. If the agreement included attorney’s fees, the parties also had to provide evidence supporting the fee award, including contemporaneous billing records listing each attorney’s date, hours, and work performed. Judge Vernon S. Broderick did not approve a settlement or otherwise decide the underlying Fair Labor Standards Act claims in this order.