Yugsi Morocho v. VIP Nail Salon Inc.

Background

The court was notified that mediation had resulted in an agreement on all issues. The case involved claims under the Fair Labor Standards Act, a federal law governing matters such as minimum wages, overtime, and related employment protections. The opinion does not state the settlement’s terms or say that the court approved it.

Settlement approval and dismissal with prejudice

The court ordered that the parties could not dismiss the action with prejudice based on the settlement unless the settlement was approved by either the court or the Department of Labor. A dismissal with prejudice generally ends the action in a way that bars bringing the same claims again, but the court did not itself enter such a dismissal here.

If the parties wanted court approval, they had to file a joint letter motion and the settlement agreement on the public docket by December 20, 2019. The motion had to explain why the settlement was fair and reasonable, including the plaintiff’s possible recovery, the burdens and expenses avoided, the litigation risks, whether experienced counsel negotiated at arm’s length, and the possibility of fraud or collusion. It also had to address whether a genuine dispute existed about the hours worked or compensation owed and how much the plaintiff’s attorney would seek in fees. The court stated that, absent special circumstances, it would not approve an agreement filed under seal or in redacted form.

Alternative dismissal without prejudice

The court noted that the Second Circuit had not decided whether an Fair Labor Standards Act case could be settled without court or Department of Labor approval and dismissed without prejudice under Federal Rule of Civil Procedure 41(a)(1)(A). If the parties chose that route, they had to file a stipulation on the public docket within 30 days. The stipulation had to include an affirmation from the plaintiff’s counsel stating that the plaintiff or plaintiffs had been clearly advised that the settlement would not prevent another lawsuit against the same defendants and confirming that the settlement agreement contained no release of the defendants. The court warned that this option could allow the case to be reopened later.

Disposition

This was a procedural order concerning how the parties could finalize or dismiss their settlement. The court did not grant final settlement approval, dismiss the case, or decide the underlying Fair Labor Standards Act claims. If no required letter or stipulation was filed by December 20, 2019, the court scheduled a conference for January 3, 2020.

Judge

The order was signed by Valerie Caproni, United States District Judge.