Elmatad v. Shutterstock

Background

The action was brought under the Fair Labor Standards Act (FLSA), a federal law governing matters including overtime pay. In a letter filed October 28, 2025, the parties advised the court that they had reached a settlement in principle.

Under the FLSA, an employer that violates overtime-pay requirements may owe the unpaid overtime and an equal amount as additional damages. The court explained that when FLSA claims are settled and dismissed under Federal Rule of Civil Procedure 41, the settlement and any proposed attorney’s-fee award must be reviewed for fairness. A settlement made through a Rule 68(a) offer of judgment does not require this judicial approval.

Order

The court ordered the parties to submit the settlement agreement and a joint letter by November 14, 2025. The letter must explain the basis for the proposed settlement and, if the parties contemplate dismissal under Rule 41, why the agreement should be approved as fair and reasonable. It must address the fairness factors identified in Wolinsky v. Scholastic, Inc., and, if applicable, any incentive payment to Elmatad and any attorney’s-fee award to her counsel, supported by documentation when appropriate.

The court also informed the parties that they could consent to proceed for all purposes before the assigned magistrate judge. If all parties consented, they were required to file a completed consent form by November 14, 2025, and the magistrate judge would decide whether to approve the settlement.

Settlement Provisions

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 public-access right applicable to judicial documents. It likewise would not approve a release or waiver covering claims that had not accrued or claims unrelated to wage-and-hour matters unless the parties justified that breadth with case-specific reasons.

The court also would not approve a clause barring Elmatad from making negative statements about a defendant unless the clause included an exception for truthful statements about her experience litigating the case, or unless the parties provided case-specific reasons for omitting such an exception. If the agreement contained any of these provisions, the parties were required to state whether they wanted the court to consider approval with the provisions removed. The court noted that it could approve or reject the agreement but could not rewrite it.

Disposition

Judge Margaret M. Garnett ordered the parties to submit the required settlement materials by November 14, 2025. The order did not approve the settlement and did not state that the case was dismissed.