Rivera v. Palillo

Background

The opinion states that Lauren N. Rivera brought this Fair Labor Standards Act case against Michael B. Palillo, individually, and Michael B. Palillo, P.C. The parties advised the court that they had reached a settlement after a settlement conference referral to Magistrate Judge Netburn.

The Fair Labor Standards Act requires an employer that violates overtime-pay requirements to pay the unpaid overtime and an additional equal amount as liquidated damages. The court explained that a settlement of Fair Labor Standards Act claims, including any proposed attorney-fee award, must be reviewed for fairness and reasonableness before it can take effect.

Settlement-Approval Options

The court gave the parties two options, both with an April 1, 2020 deadline:

1. They could submit the settlement agreement and a joint letter explaining why the agreement was fair and reasonable, addressing the factors identified in the court’s cited authority. The letter also had to address any payment to the plaintiff for serving as an incentive and any attorney-fee award, with supporting documentation when appropriate. 2. They could consent to proceed before Magistrate Judge Netburn for all purposes, in which case she would decide whether to approve the settlement.

The court stated that it would not approve an agreement containing a confidentiality provision unless the parties showed case-specific reasons sufficient to overcome the public’s common-law right to access judicial documents. It also would not approve a release or waiver covering claims that had not yet arisen or claims unrelated to wage-and-hour matters unless the parties justified that broad provision with case-specific reasons. Finally, it would not approve a clause barring the plaintiff from making negative statements about a defendant unless the clause allowed truthful statements about the plaintiff’s experience litigating the case, absent case-specific justification for omitting that exception.

If the agreement contained any of those provisions, the parties’ joint letter had to state whether they would accept the settlement without the provision or abandon the settlement and continue litigating if the court refused to approve it. The court also warned that, absent good cause, it could place the joint letter and settlement agreement on the public docket despite a confidentiality provision.

Ruling and Effect

Judge Jesse M. Furman did not approve or reject the settlement in this order. Instead, he set the procedures for seeking approval and ordered that the previously scheduled April 7, 2020 conference be adjourned indefinitely.