Reyes v. Tava Cafe LLC

Background

The court stated that the parties had reached a settlement in the case, including claims under the Fair Labor Standards Act (FLSA). The order described procedures the parties had to follow depending on whether they wanted to dismiss the FLSA claims with prejudice or without prejudice. The order did not itself approve the settlement or dismiss the case.

Dismissal with prejudice

The court relied on the Second Circuit’s decision in Cheeks v. Freeport Pancake House, Inc., which held that FLSA claims cannot be dismissed with prejudice through the parties’ automatic stipulation procedure under Federal Rule of Civil Procedure 41(a)(1)(A). Instead, dismissal with prejudice required court approval under Rule 41(a)(2).

The parties were first ordered to discuss whether they would consent under 28 U.S.C. § 636(c) to having all further proceedings conducted by the assigned magistrate judge. If both parties consented, they had two weeks to file a completed consent-and-reference form. If either party did not consent, the parties had to file a joint letter within two weeks stating that they did not consent, without identifying the party or parties withholding consent. The order stated that withholding consent would not have negative consequences.

If the parties did not consent to proceed before the magistrate judge, they were directed to submit within 30 days a joint motion explaining why the settlement was fair and should be approved. The motion had to address the factors identified in Wolinsky v. Scholastic Inc. and include the settlement agreement as an exhibit. The court stated that it would not approve settlement agreements containing confidentiality provisions and would not allow settlement-related documents to be filed under seal unless the parties made a particularized showing overcoming the presumption of public access to judicial documents.

If the settlement included attorney’s fees, the parties were directed to address whether the fees were reasonable under the framework identified in Goldberger v. Integrated Resources, Inc. Plaintiffs’ attorneys also had to attach detailed time records for the court’s review.

Dismissal without prejudice

The order stated that Cheeks had reserved the question of voluntary dismissal of FLSA claims without prejudice under Rule 41(a)(1)(A). The court therefore said it would accept a stipulation dismissing the FLSA claims without prejudice. If the parties chose that route, they were directed to submit the stipulation within 30 days and file it through the court’s electronic filing system as a proposed order.

Disposition

The court directed the parties to proceed under one of the two described alternatives. It did not grant or deny final approval of the settlement, and it did not enter a dismissal in this order.