Edwards v. The Servicemaster Company, LLC

Background

The plaintiffs brought an action for damages under the Fair Labor Standards Act, a federal wage-and-hour law, and the New York Labor Law. The parties submitted a joint request for approval of their fully executed settlement agreement.

Settlement Review

Under Second Circuit precedent, a federal court must review an agreement settling Fair Labor Standards Act claims to determine whether it is fair and reasonable and resulted from arm’s-length negotiations rather than employer overreaching. The court stated that it had helped mediate the action and carefully reviewed the settlement agreement and the parties’ letter.

The court considered, among other things, prior proceedings, the risks, burdens, and costs of continuing the action, the possible range of recovery, whether experienced counsel or the parties negotiated at arm’s length, the attorneys’ fees, and the possibility of fraud or collusion. The court also noted that the agreement contained no confidentiality restrictions or non-disparagement provisions, narrowly limited the release to wage-and-hour claims, and provided attorneys’ fees within a fair, reasonable, and acceptable range.

Ruling

The court found the settlement agreement fair and reasonable and approved it. Because the case was resolved by settlement, Judge Robert W. Lehrburger ordered it dismissed and discontinued in its entirety, with prejudice, without costs or fees to any party except as provided in the settlement agreement. The Clerk of Court was directed to terminate all motions and deadlines and close the case.