Ayala v. BL 62 West 9th St, LLC

Background

The parties advised the court that they had reached a settlement in this Fair Labor Standards Act (FLSA) case. The opinion does not describe the underlying wage claims or provide the settlement’s terms.

Legal Standard

The court stated that parties may not privately settle FLSA claims with prejudice unless the settlement is approved by the district court or the Department of Labor. The court must determine whether the proposed agreement is fair and reasonable by considering the total circumstances, including: the plaintiff’s 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. If the agreement provides for attorney’s fees, the court must separately assess whether those fees are reasonable and must receive factual support for the award.

Order

The court ordered the parties to provide the settlement terms within 30 days. It also ordered them to submit a joint letter of no more than five pages explaining why the settlement was a fair and reasonable compromise, including information about the five listed factors. If the agreement included attorney’s fees, the parties had to submit evidence supporting the fee award, including contemporaneous billing records identifying each attorney’s date of work, hours spent, and work performed.

Judge Vernon S. Broderick did not approve or reject the settlement in this order. He required additional information so the court could evaluate it under the FLSA.