Pereira v. KGN Enterprises Inc

Background

The parties advised the court that they had reached a settlement in a case involving claims under the Fair Labor Standards Act (FLSA). The order did not describe the underlying allegations, the settlement amount, or the settlement's other terms. It addressed how the parties could dismiss the FLSA claims.

Dismissal with prejudice

The court explained that, under the Second Circuit's decision in Cheeks v. Freeport Pancake House, Inc., the parties could not use Federal Rule of Civil Procedure 41(a)(1)(A) to dismiss FLSA claims with prejudice. A dismissal with prejudice would permanently end those claims. Instead, the parties had to seek the court's approval under Rule 41(a)(2).

The parties were first ordered to discuss whether they would consent to having all further proceedings conducted by the assigned magistrate judge under 28 U.S.C. § 636(c). If both consented, they had to file the required consent form by November 10, 2020. If either party withheld consent, the parties had to file a joint letter by that date stating that they did not consent, without identifying the nonconsenting party or parties. The order stated that withholding consent would have no negative consequences.

If the parties did not consent to proceed before the magistrate judge, they had to file a joint motion by November 17, 2020 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. The court stated that it would not approve settlement agreements containing a confidentiality provision and would not allow settlement-related documents to be sealed without a particularized showing overcoming the presumption of public access to judicial documents.

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

Dismissal without prejudice

The court explained that Cheeks had reserved the question of voluntary dismissal of FLSA claims without prejudice under Rule 41(a)(1)(A). The court therefore stated that it would accept a stipulation dismissing the FLSA claims without prejudice. A dismissal without prejudice would not permanently bar those claims. The parties had to submit such a stipulation by November 10, 2020 if they chose this option.

Ruling and effect

The court directed the parties to follow one of the two procedures. It did not approve the settlement, dismiss the claims, or decide the merits of the FLSA allegations in this order. The order's stated deadlines were November 10 and November 17, 2020.