Aquino-Moreno v. Scaffolding

Background

Representative plaintiff Luis Aquino-Moreno brought a proposed collective action against Consolidated Scaffolding, Inc. and Tom Bowes. The plaintiffs alleged, among other things, that the defendants violated the Fair Labor Standards Act and the New York Labor Law by failing to pay overtime wages. Franz Suarez-Rojas filed written consent to join the Fair Labor Standards Act action on December 20, 2024. The court explained that filing such consent was sufficient for him to join, even though the court had not conditionally certified the collective action, and the defendants did not dispute that he was similarly situated to Aquino-Moreno.

The parties later reached a settlement. In June 2025, the court denied their request for approval without prejudice to renewal. The court also had stayed the case while the parties arbitrated their claims; the arbitration was ongoing. For purposes of deciding the renewed settlement motion, the court lifted the stay, which otherwise remained in effect.

Legal standard

A settlement of Fair Labor Standards Act wage claims requires approval by the Department of Labor or a district court. The court may approve the agreement only if it is fair and reasonable. Relevant considerations include the plaintiffs’ possible recovery, the burdens and expenses avoided by settling, litigation risks, whether experienced counsel negotiated at arm’s length, and the possibility of fraud or collusion. Courts should also reject highly restrictive confidentiality provisions and releases that are broader than the claims in the case.

Analysis and ruling

The court’s earlier order found that the settlement’s release was overbroad in at least two respects. It released claims not only against the defendants but also against affiliated business entities. It also covered all claims under the Fair Labor Standards Act, the New York Labor Law, and a cited New York regulation, including claims outside the scope of this lawsuit. The court separately found that the agreement’s promise not to sue covered any known or unknown wage-related claims concerning the released parties and therefore reached far beyond the claims at issue.

The revised settlement used release and not-to-sue provisions identical to those the court had already rejected. The court therefore concluded that the parties had not corrected the identified defects. It denied Suarez-Rojas and the defendants’ renewed motion for settlement approval without prejudice to renewal. The court warned that disregarding its prior order could result in sanctions under Federal Rule of Civil Procedure 11(c)(3). The parties may file a revised settlement agreement and motion by December 3, 2025, consistent with this order and the June 3, 2025 order.