Dominguez v. Amsterdam Gourmet Foods, Inc.

Background

The action was brought under the Fair Labor Standards Act, a federal law governing, among other things, overtime pay. The parties informed the court that they had reached a settlement in principle. The court explained that, when the parties seek to settle and dismiss Fair Labor Standards Act claims under Rule 41 of the Federal Rules of Civil Procedure, the settlement—including any proposed attorneys’ fee award—must be reviewed for fairness. The opinion noted that court approval is not required for a settlement made through a Rule 68(a) offer of judgment.

Required Settlement Submission

The court ordered the parties to submit the settlement agreement and a joint letter by December 23, 2020. The letter must explain the basis for the proposed settlement and, if the parties contemplated dismissal under Rule 41, why the settlement should be approved as fair and reasonable under the factors discussed in the cited case law. The letter must also address any incentive payment to Dominguez and any attorneys’ fee award to his counsel, with supporting documentation when appropriate.

The parties could instead consent to proceed for all purposes before the assigned magistrate judge, who would then decide whether to approve the settlement. If all parties consented for that purpose, they were directed to email the completed consent form to Judge Furman’s chambers by the deadline.

Settlement Provisions

The court stated that it would not approve an agreement containing a confidentiality provision unless the parties showed case-specific reasons sufficient to overcome the public’s common-law right of access to judicial 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. A non-disparagement clause barring negative statements about a defendant would also require an exception for truthful statements about the plaintiff’s experience litigating the case, unless the parties justified omitting that exception.

If the agreement contained any of those provisions, the parties had to state whether they wanted the court to consider approving the agreement with the provisions removed. The opinion noted that the court could approve or reject the agreement but could not modify it itself. The scheduled March 3, 2021 pretrial conference and all pending deadlines were adjourned indefinitely.

Disposition

The order did not approve or reject the settlement. It required additional submissions for the court’s review and set instructions governing any proposed settlement terms. Judge Jesse M. Furman entered the order on December 9, 2020.