Grant v. Elmax Builders Supply, LLC
- Stewart Aaron
- 1:20-cv-02353
- U.S. District Court · Southern District of New York
- 2
In Grant v. Elmax, Judge Aaron declined to approve the proposed settlement because its non-disparagement clause lacked a truthfulness exception.
Lambert Grant and Elmax Builders Supply, LLC, whose proposed settlement could not be approved as written.
What happened
In Grant v. Elmax Builders Supply, LLC, the parties jointly asked the Southern District of New York to approve their proposed settlement agreement.
The agreement required Lambert Grant not to disparage, defame, or criticize Elmax and related people or entities. Although it included a similar obligation for the defendants, it did not allow truthful statements about Grant’s experience litigating the case.
The court could not approve the agreement as written. Judge Stewart D. Aaron ordered the parties, by May 11, 2021, either to file a revised agreement with a mutual non-disparagement clause containing the required truthfulness exception or to withdraw their request and continue the litigation.
The detailed version
- Grant v. Elmax Builders Supply, LLC · No. 1:20-cv-02353
- Stewart Aaron
- Apr. 27, 2021
Background
The parties submitted a joint letter asking the court to approve their proposed Settlement Agreement & Release. The opinion refers to the remedial purposes of the Fair Labor Standards Act, but it does not describe the underlying claims in detail.
Settlement provision at issue
Paragraph 7 required Lambert Grant to refrain from disparaging, defaming, or criticizing the released parties, including Elmax, its affiliates, owners, officers, agents, representatives, and management employees. The agreement contained a similar non-disparagement provision for the defendants, but it did not include an exception allowing truthful statements about Grant’s experience litigating the case.
Court’s ruling
The court held that a non-disparagement provision in this setting must be mutual and must include a carve-out for truthful statements. Without that carve-out, the provision was not fair and reasonable and conflicted with the Fair Labor Standards Act’s remedial purposes. The court therefore could not approve the agreement as written.
The court ordered the parties, no later than May 11, 2021, either to file a revised settlement agreement containing a mutual non-disparagement clause with the required carve-out or to file a joint letter withdrawing their request for settlement approval and stating that they intended to proceed with the litigation.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.