Placido v. Regine's Originals Inc.

Background

The court was notified on November 5, 2020, that mediation had produced an agreement resolving all issues. The case involved claims under the Fair Labor Standards Act (FLSA), a federal law governing certain wages and working conditions.

Settlement-approval requirement

The court ordered that the parties could not dismiss the action with prejudice—that is, permanently end it in a way that generally bars bringing the same claims again—unless the settlement agreement was approved by either the court or the U.S. Department of Labor. If the parties wanted court approval, they had to file a joint letter motion and the settlement agreement on the public docket by December 5, 2020. The motion had to explain why the settlement was fair and reasonable, including the plaintiff’s possible recovery, the burdens and expenses avoided through settlement, litigation risks, whether experienced counsel negotiated at arm’s length, and the possibility of fraud or collusion.

The submission also had to address whether a genuine dispute existed about the hours worked or compensation owed and how much the plaintiff’s attorney sought in fees. The court stated that, absent special circumstances, it was unlikely to approve a settlement filed under seal or in redacted form.

Release provisions

The court warned that it was unlikely to approve a general release or a release covering claims unrelated to the wage-and-hour claims in the complaint and related state-law claims. If the parties believed unusual circumstances justified a broader release, their joint motion had to explain why. The court warned that failing to follow these instructions could lead to denial of the motion and sanctions against the attorneys.

Alternative procedure and disposition

The court noted that the Second Circuit had not decided whether an FLSA case could be settled without court or Department of Labor approval and dismissed without prejudice under Federal Rule of Civil Procedure 41(a)(1)(A). If the parties chose that route, they had to file a stipulation within 30 days, accompanied by an affirmation from the plaintiff’s counsel stating that the plaintiff had been clearly advised that the settlement would not prevent another lawsuit against the same defendants and affirming that the agreement contained no release of the defendants. The court warned that this option carried a risk that the case could later be reopened.

If no letter or stipulation was filed by December 5, 2020, Judge Valerie Caproni ordered that a conference would be held on December 11, 2020. The order did not approve the settlement or dismiss the action.