Lazo v. Valdome Inc.

Background

Manuel N. Lazo sued Valdome Inc. and other defendants under the Fair Labor Standards Act. The parties informed the court that they had reached a settlement in principle.

Court’s analysis

Under the Second Circuit law cited by the court, a settlement in a Fair Labor Standards Act case—including any proposed attorney’s fee award—must be reviewed to determine whether it is fair. The court directed the parties to explain the basis for the proposed settlement and why it should be approved as fair and reasonable, using the factors discussed in Wolinsky v. Scholastic, Inc.

The required submission must address any confidentiality provisions, non-disparagement provisions, and releases. It must also address any incentive payment to Lazo and any proposed attorney’s fee award to his counsel. For fees, the court required adequate supporting documentation, which would normally include contemporaneous time records showing the date, hours worked, and nature of the work for each attorney. The court stated that merely identifying the proportion of the requested fee to the total settlement would not be enough and that insufficient documentation could result in rejection of the proposed fee award.

Order and effect

The court ordered the parties to submit a joint letter by December 18, 2020, at 5:00 p.m. It also directed them to appear by telephone for a settlement-approval hearing on December 23, 2020, at 2:00 p.m. Judge Lewis J. Liman did not approve or reject the proposed settlement in this order; he required additional information and scheduled a hearing.