Castillo v. Aurora Vegetable Market Corp.

Background

The parties informed the court that they had reached a settlement in this Fair Labor Standards Act (FLSA) case. The court explained that FLSA claims generally cannot be privately settled with a bar on future claims unless the district court or the Department of Labor approves the settlement. The court therefore had to determine whether the proposed agreement was a fair and reasonable compromise of disputed issues.

Court’s analysis

The court stated that it would consider the total circumstances, including the plaintiff’s possible recovery, the burdens and expenses the settlement would avoid, the litigation risks, whether experienced counsel negotiated the agreement at arm’s length, and the possibility of fraud or collusion. The court also stated that any attorney-fee provision required a separate reasonableness review supported by factual evidence.

Order

The court ordered the parties to provide the settlement terms within 45 days. It also ordered them to submit a joint letter of no more than five pages explaining why they believed the settlement was fair and reasonable, including information about the listed factors. If the agreement included attorney’s fees, the parties had to submit evidence supporting the award, including contemporaneous billing records identifying each attorney’s date of work, hours, and tasks. Judge Vernon S. Broderick did not approve or reject the settlement in this order; he required additional submissions so the court could evaluate it.