De Jesus Torres v. HWF Realty Management, INC.

Background

The plaintiffs and HWF Realty Management, Inc. brought the court an accepted Rule 68 offer of judgment resolving a wage-and-hour claim under the Fair Labor Standards Act (FLSA), a federal law governing wages and working hours. The parties executed the offer and acceptance on August 28, 2019.

The court had previously declined to approve the arrangement because the Second Circuit’s decision in Cheeks v. Freeport Pancake House required judicial review of private FLSA settlements to ensure that they were fair. The parties then moved for reconsideration and asked the court to stay the case while the Second Circuit considered Hasaki. The court stated that it was not persuaded that Rule 68 allowed the parties to avoid review under the FLSA and Cheeks.

Governing Decision

On December 6, 2019, the Second Circuit issued its decision in Hasaki. That decision held that the FLSA does not require judicial approval of Rule 68(a) offers of judgment resolving FLSA claims. The court explained that it was bound by that precedent even though it believed unsupervised Rule 68 settlements could create a risk of abuse, including excessive attorney-fee allocations or overly broad releases.

Ruling

Judge Paul A. Crotty granted the parties’ request for an order directing the Clerk of Court to enter judgment on the accepted Rule 68 offer. The court directed the Clerk to enter the offer submitted at Docket 57, denied the motion for reconsideration at Docket 60 as moot, and directed the Clerk to close the case. The opinion does not state the amount or other terms of the judgment.

Effect

The ruling required entry of the accepted Rule 68 judgment and ended the case administratively. It did not decide the underlying wage claim after a trial or merits determination; the court acted in response to the parties’ accepted judgment offer and the controlling Second Circuit decision.