Ponce Rodriguez v. 880 Dry Cleaners, Inc.

Background

The action was brought under the Fair Labor Standards Act, which requires an employer that violates overtime-pay requirements to pay unpaid overtime and an equal amount as additional damages. On September 30, 2020, Magistrate Judge Fox advised the court that the parties had reached a settlement during a settlement conference.

The court explained that when parties seek to settle and dismiss Fair Labor Standards Act claims under Rule 41 of the Federal Rules of Civil Procedure, the district court must review the settlement, including any proposed attorney-fee award, for fairness. The opinion does not disclose the settlement amount or other settlement terms.

Settlement-Approval Options

The court gave the parties two options, both due by October 15, 2020:

1. They could submit the settlement agreement with a joint letter explaining the basis for the proposed settlement and why it was fair and reasonable. The letter was to address the fairness factors identified in Wolinsky v. Scholastic, Inc. and, if applicable, any payment to the plaintiff beyond the settlement amount and any attorney-fee award, with supporting documentation when appropriate. 2. They could consent to proceed before Magistrate Judge Fox for all purposes, allowing him to decide whether to approve the settlement.

The court noted that judicial approval is not required for a Fair Labor Standards Act settlement made through a Rule 68(a) offer of judgment.

Settlement Provisions Addressed

The court stated that it would not approve a settlement agreement containing a confidentiality provision unless the parties showed case-specific reasons sufficient to overcome the public’s common-law right of access to court documents. It also would not approve a release or waiver covering claims that had not accrued or claims unrelated to wage-and-hour matters unless the parties provided case-specific justification.

The court further stated that it would not approve a provision barring the plaintiff from making negative statements about a defendant unless the provision allowed truthful statements about the plaintiff’s experience litigating the case, or the parties provided case-specific reasons for omitting that exception.

If the agreement contained any of those provisions, the parties were directed to say whether they wanted the court instead to consider approving the agreement with the provisions removed. The court noted that it could approve or reject the settlement but could not rewrite the agreement itself.

Ruling and Disposition

Judge Jesse M. Furman ordered the parties to use one of the two settlement-approval procedures by October 15, 2020 if they intended to dismiss the action based on the settlement. He also ordered that the previously scheduled October 6, 2020 conference be adjourned without setting another date. The order did not approve or reject the settlement.