Grullon v. 10 East Fordham Fashion Inc.

Background

The action was brought under the Fair Labor Standards Act, a federal law governing minimum wages and overtime pay. The court was informed that Kevin Grullon and 10 East Fordham Fashion Inc. et al. had reached a settlement in principle. The opinion does not state the settlement amount or describe the specific wage claims.

Court’s analysis

The court explained that when parties settle Fair Labor Standards Act claims and seek dismissal under Federal Rule of Civil Procedure 41, the settlement—including any proposed attorney’s fee award—must be reviewed to ensure that it is fair. The court cited decisions identifying factors relevant to evaluating the fairness and reasonableness of the settlement and the reasonableness of attorney’s fees.

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’s right of access to court documents. It also stated that it 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 broad provision with case-specific reasons. A non-disparagement clause barring negative statements about a defendant must include an exception for truthful statements about the plaintiff’s experience litigating the case, unless the parties provide sufficient case-specific reasons for omitting that exception.

The court also reminded the parties that they could resolve the Fair Labor Standards Act claims through an offer of judgment under Rule 68(a), which does not require judicial approval. Alternatively, all parties could consent to proceed before the designated magistrate judge, who would decide whether to approve the settlement. If they chose that option, the parties were directed to file the completed consent form by December 9, 2025.

Order and effect

The court ordered the parties to submit their settlement agreement and a joint letter by December 16, 2025. The letter must explain the basis for the proposed settlement and why any dismissal under Rule 41 should be approved as fair and reasonable. It must also address any incentive payment to Grullon and any attorney’s fee award, with supporting documentation when appropriate.

The order did not approve or reject the settlement, dismiss the case, or decide the underlying wage claims. It directed the parties to provide information needed for a future settlement review. If the agreement contains one of the disfavored provisions, the parties may ask the court to consider approving the agreement with that provision removed; the opinion states that the court may approve or reject the agreement but may not rewrite it.