Flores v. Ceviche

Background

This wage-and-hour class and collective action asserted claims under the Fair Labor Standards Act (FLSA) and New York Labor Law (NYLL), including claims for unpaid straight-time and overtime wages. The court conditionally approved a group procedure under the FLSA, sent notice to that group, and five people opted in.

On September 12, 2025, the court granted in part the plaintiffs’ request to certify a class under Rule 23 for certain NYLL claims. The certified class consisted of front-of-house employees of Mission Ceviche UES claiming additional straight-time or overtime pay based on alleged defects in tip-credit notices, failure to maintain a daily tip log, and miscalculation of the tip-credit overtime rate. Class notice was not sent before the deadline.

Before class notice was mailed, Flores and the FLSA opt-in plaintiffs accepted Rule 68 offers of judgment from the defendants. The proposed judgments sought to end the case with prejudice. Because the offers did not resolve the claims of absent class members, the court directed the parties to address whether the class first needed to be decertified. The defendants requested decertification, and the plaintiffs did not oppose that request.

Decertification

The court granted the motion to decertify the Rule 23 class. Rule 23 requires, among other things, that the representative parties adequately protect the class’s interests. The court held that Flores was no longer an adequate class representative because accepting the offer of judgment meant she no longer had a reason to vigorously pursue the class claims. The court reached the same conclusion about the FLSA opt-in plaintiffs, who also had accepted offers and therefore could not appropriately replace Flores as lead plaintiff.

The court also relied on the early stage of the class action. Class notice had not been sent, and there had not been significant class discovery. The court concluded that decertification would not prejudice absent class members. It stated that their claims were preserved under the American Pipe tolling doctrine through the date of the order, so they could still bring individual claims if they chose to do so.

The court noted that defendants had also argued that Flores lacked standing, meaning a sufficient personal stake to pursue the claims. The court expressly stated that it did not need to decide that argument. The class was decertified because there was no longer an adequate class representative for the absent class members.

Notice to Absent Class Members

The plaintiffs asked the court to send notice of the settlement to absent class members. The court rejected that request under Rule 23. It explained that federal procedure governed the NYLL class claims and that Rule 23’s notice provisions apply when a certified class, or a class proposed for settlement purposes, will be bound by the resolution.

Here, the court had decertified the class, and the proposed judgments resolved only the individual claims of Flores and the FLSA opt-in plaintiffs. The judgments did not purport to bind absent class members. The court therefore held that Rule 23 did not require notice. It also concluded that notice would not be prudent because class-certification notice had never been sent and notice about decertification and an individual settlement could confuse people who did not know a class had been certified.

Rule 68 Offers of Judgment

The court explained that court approval generally is not required when a Rule 68 offer resolves an individual FLSA claim. Rule 23, however, governs settlement of NYLL class claims. Because the class had been decertified and the proposed judgments resolved only individual claims, the court required the proposed judgments to be revised rather than requiring notice to absent class members.

The revised judgments had to expressly state that they would not bind absent putative class members. The court stated that, once the revised proposed judgments were filed, it would approve the settlement. The parties were ordered to file updated proposed judgments by December 9, 2025.

Disposition

The motion to decertify the class was granted. The court did not require notice to absent putative class members under Rule 23(e), because the judgments would not resolve class claims and absent members would not be barred from bringing individual claims by the settlement or judgment. The opinion did not itself state that the proposed judgments had already been approved; it stated that approval would follow revised filings.