Small v. Stellar Management LTD

Background

Jonathan Small asserted claims under the Fair Labor Standards Act against Stellar Management LTD et al. On September 21, 2020, the parties informed the court that they had reached a settlement in principle on all issues. On October 2, 2020, the parties consented to referring disposition of the matter to Magistrate Judge Stewart D. Aaron under 28 U.S.C. § 636(c). The parties later submitted a proposed settlement, related papers, supplemental papers, a retainer agreement, attorney time records, and a fully executed settlement agreement.

Court’s Analysis

The court reviewed the proposed settlement under the standard requiring Fair Labor Standards Act settlements to be fair and reasonable. The court noted that the agreement included a mutual general release and released a claim not raised in the complaint, provisions that are generally disfavored. The court nevertheless found the settlement sum fair and reasonable because, as stated in the opinion, Small would receive a total amount slightly greater than 100% of his potential recovery.

The court also found the mutual general releases acceptable because Small no longer worked for the defendant, he was represented by experienced counsel, and the release covered individuals and entities other than the defendants only when they were acting on behalf of or in a legally recognized relationship with the defendants and only for claims arising from those activities.

Disposition

Judge Stewart D. Aaron approved the settlement. The court dismissed the action with prejudice and without costs except as may be stated in the settlement agreement. The court retained jurisdiction to enforce the settlement agreement and requested that the Clerk close the case.