Lo v. Asian-American Home Healthcare Services, Inc.

Background

Kazong Lo brought a lawsuit against Asian-American Home Healthcare Services, Inc. under the Fair Labor Standards Act (FLSA), identifying herself as a proposed class representative. Before a motion for class certification was filed and before the pretrial conference, Lo entered into a settlement agreement directly with the company. Her lawyer later withdrew after expressing concern that Lo may have been pressured into settling. The court allowed the withdrawal but required the company to address those concerns in any request for approval of the FLSA settlement.

Lo was then proceeding without a lawyer. She did not oppose the company’s Motion to Approve Settlement and to Dismiss Action and did not attend the hearing. The court received the signed settlement agreement and a signed stipulation for dismissal. The company also submitted a Wells Fargo withdrawal receipt. Its vice-president, Phineas Vang, stated that the withdrawn amount was given to Lo, but the company did not provide evidence that Lo received cash or a check. The company’s lawyer could not assure the court that payment had actually been made.

Legal standard

The court stated that a settlement in an FLSA case may be approved when the case involves a genuine dispute and the proposed settlement is fair and equitable to all parties. In evaluating fairness, a court may consider the stage of the litigation, the discovery exchanged, counsel’s experience, the plaintiff’s likelihood of success, possible employer overreaching, and whether represented parties reached the settlement through negotiations conducted at arm’s length and based on the case’s merits.

Ruling

The court held that it could not determine that the settlement terms were fair and equitable because the company had not shown that Lo was paid. The court noted an additional problem: the cash withdrawal and claimed transfer did not clearly match the settlement agreement, which referred to different amounts to be paid by check. The court did not decide that additional issue because the lack of evidence that Lo received the payment was sufficient.

The court therefore denied Defendant’s Motion to Approve Settlement and to Dismiss Action, Document No. 27. The opinion does not state that the case was dismissed or that the settlement was approved.