Malea v. Six Ten Management Corp.
- Vernon Broderick
- 1:19-cv-06346
- U.S. District Court · Southern District of New York
- 3
In Malea v. Six Ten Management Corp., Judge Broderick entered judgment under Rule 68 after a federal wage-law settlement, despite concerns the process evaded court review.
The ruling affected Hector Malea, Six Ten Management Corp., and the other defendants because it required entry of judgment under their Rule 68 offer and acceptance and closed the case. It also addressed how FLSA settlements are reviewed in federal court.
What happened
In Malea v. Six Ten Management Corp., the parties reached a settlement after asking the court to refer the case to Magistrate Judge Kevin N. Fox for settlement purposes. The settlement conference was canceled after the parties reported that they had reached an agreement.
The parties later filed an offer and acceptance of judgment under Federal Rule of Civil Procedure 68. Judge Broderick noted that this sequence appeared to avoid the court’s review of settlements under the Fair Labor Standards Act, a federal wage law designed in part to protect workers from unfair settlements.
Judge Vernon S. Broderick nevertheless ordered that judgment be entered under the parties’ Rule 68 filings, because Second Circuit precedent said court approval was not required for Rule 68 offers settling Fair Labor Standards Act claims. He directed the Clerk to terminate open motions and close the case.
The detailed version
- Malea v. Six Ten Management Corp. · No. 1:19-cv-06346
- Vernon Broderick
- Mar. 2, 2021
Background
The opinion concerns Hector Malea’s case against Six Ten Management Corp. and other defendants. The parties jointly asked the court to refer the case to Magistrate Judge Kevin N. Fox for settlement purposes. The court granted that request, and the parties were scheduled for a settlement conference on January 26, 2021. The conference was canceled after Magistrate Judge Fox reported that a settlement had been reached.
On January 29, 2021, the court ordered the parties to submit a joint letter disclosing the settlement terms and explaining why the agreement was a fair and reasonable compromise of disputed issues. More than two weeks after the settlement had been reported, the parties filed a notice accepting an offer of judgment under Federal Rule of Civil Procedure 68, along with a proposed judgment.
Court’s analysis
The court discussed the Fair Labor Standards Act (FLSA), a federal law governing wages and working conditions. Under Cheeks v. Freeport Pancake House, Inc., the Second Circuit had held that FLSA settlements generally require approval by a district court or the Department of Labor because of special concerns about protecting workers’ wages and addressing unequal bargaining power between employers and employees.
The court also discussed the Second Circuit’s later decision in Mei Xing Yu v. Hasaki Rest., Inc., which held that judicial approval is not required for Rule 68(a) offers of judgment settling FLSA claims. Judge Broderick stated that this language required him to enter judgment under the parties’ Rule 68 offer and acceptance.
Judge Broderick nevertheless criticized the parties’ timing. He stated that submitting the Rule 68 materials after the parties had already reported reaching a settlement conflicted with the purpose of the earlier FLSA-settlement decision and could allow parties to avoid the court’s review. He also noted that this was his third case in less than two months in which parties had circumvented that review by submitting Rule 68 materials after reporting that they had settled.
Disposition
The court ordered that judgment be entered in accordance with the parties’ previously filed Rule 68 offer and acceptance of judgment. The Clerk was directed to terminate any open motions and close the case. The opinion does not state the settlement amount or the other settlement terms.
Read the full 3-page opinion on CourtListener, the free public archive maintained by the Free Law Project.