Reyes v. Healthy Fresh Juice Inc.

Background

The court was advised that the parties had reached a settlement in this Fair Labor Standards Act (FLSA) case. The opinion does not state the settlement amount or provide the settlement’s terms.

Legal standard

The court explained that the parties could not privately settle FLSA claims with prejudice without approval from the district court or the Department of Labor. The court therefore had to determine whether the settlement was fair and reasonable. It said that this review considers the total circumstances, including the plaintiffs’ possible recovery, the burdens and expenses of continuing the case, the litigation risks, whether the agreement resulted from arm’s-length bargaining, and the possibility of fraud or collusion.

If the settlement included attorney’s fees, the court also had to separately assess whether those fees were reasonable. The parties had to provide factual support, including contemporaneous billing records showing each attorney’s dates, hours, and work performed.

Order

The court ordered the parties to provide the settlement terms within 30 days so it could determine whether they complied with the FLSA and reflected a reasonable compromise of disputed issues. It also ordered the parties to submit a joint letter of no more than five pages explaining why the settlement was fair and reasonable, including information about the five listed factors. If the agreement included attorney’s fees, the parties had to submit evidence supporting the fee award. The order did not approve or reject the settlement.