Thomas v. Highgate Hotels, L.P.
- Lorna Schofield
- 1:19-cv-07408
- U.S. District Court · Southern District of New York
- 3
In Thomas v. Highgate Hotels, Judge Schofield did not approve the proposed settlement pending damage estimates and narrower wage-related releases.
Sharron Thomas and Highgate Hotels, L.P. were affected because their proposed settlement was not approved in its current form; the parties were required to submit a revised agreement addressing the court’s concerns.
What happened
In Thomas v. Highgate Hotels, L.P., Sharron Thomas sued Highgate Hotels, L.P., alleging violations of the Fair Labor Standards Act and New York law. The parties later told the court they had reached a settlement and submitted it for approval.
The court said it could not determine whether the settlement was fair and reasonable because the submissions did not estimate Thomas’s potential damages if the case went to trial. The proposed agreement also contained releases that were too broad because they could waive claims beyond Thomas’s wage-related claims.
Judge Lorna G. Schofield did not approve the settlement in its current form and gave the parties until December 5, 2019, to file an amended or revised agreement addressing these problems. The court said it would issue a separate order on attorneys’ fees and costs after approving an amendment or agreement.
The detailed version
- Thomas v. Highgate Hotels, L.P. · No. 1:19-cv-07408
- Lorna Schofield
- Nov. 25, 2019
Background
Sharron Thomas filed claims against Highgate Hotels, L.P., under the Fair Labor Standards Act (FLSA) and New York law. The parties notified the court that they had reached a settlement. The court required them to submit the agreement and supporting materials explaining why it was fair and reasonable, as required by the court’s cited precedent.
The parties submitted the required materials on November 20, 2019. The court reviewed those materials and identified two deficiencies.
Reasons for Not Approving the Settlement
First, the submissions did not provide Thomas’s estimate of the damages that would be available if Thomas succeeded at trial. Without an estimate of the potential maximum recovery, the court said it could not evaluate whether the settlement was fair and reasonable.
Second, the proposed agreement contained broad release and covenant-not-to-sue provisions. The provisions would have required Thomas to waive claims under the FLSA, New York law, and other laws concerning wage payments, including claims that were unknown or not specifically asserted. The court said any release in a new or revised agreement must be limited to Thomas’s wage-related claims.
Disposition
The court ordered that the settlement agreement was not approved in its current form. It ordered the parties to file an amendment or revised settlement agreement addressing the deficiencies by December 5, 2019. The court stated that a separate order concerning attorneys’ fees and costs would follow approval of an amendment or agreement. This order did not decide the underlying wage claims.
Read the full 3-page opinion on CourtListener, the free public archive maintained by the Free Law Project.