Aguilar v. E&M Food Market Corp.

Background

Jose Luis Aguilar and Juan Gil Ortega brought this Fair Labor Standards Act (FLSA) case against E&M Food Market Corp., doing business as Food Universe Marketplace and formerly known as Key Food, and Miguel Martinez and Edelma Martinez. The court was advised that the parties had reached a settlement.

Settlement-approval requirement

The court ordered that the action could not be dismissed with prejudice unless the settlement agreement was approved by the court or the Department of Labor. If the parties sought dismissal with prejudice, they had to file a joint letter motion asking the court to approve the settlement or provide documentation of Department of Labor approval. The filing, including the settlement agreement, was due on the public docket by January 19, 2021.

The letter motion had to explain why the proposed settlement was fair and reasonable. It also had to address the plaintiffs’ possible recovery, the burdens and expenses the settlement would avoid, the litigation risks, whether experienced counsel negotiated at arm’s length, and the possibility of fraud or collusion. In addition, it had to address whether a genuine dispute existed about the hours worked or compensation owed and how much the plaintiffs’ attorney would seek in fees.

Attorney fees and settlement terms

Any request for attorney fees had to include contemporaneous billing records showing, for each attorney, the date, hours worked, and nature of the work. The court stated that, absent special circumstances, it would not approve a settlement filed under seal or in redacted form. It also stated that, absent compelling circumstances, it would not approve agreements containing sweeping nondisclosure provisions or broad releases of claims unrelated to FLSA issues.

Disposition

The court declared any pending motions moot and vacated all conferences. The order did not itself approve the settlement or dismiss the action with prejudice. Judge Analisa Torres issued the order.