Villalva v. Fu Wing Garden, Inc.

Background

The parties advised the court that they had reached a settlement in principle in an action brought under the Fair Labor Standards Act, a federal law governing wage and overtime requirements. The court explained that settlements of these claims, including proposed attorneys’ fees, must be reviewed for fairness before the case can be dismissed under Rule 41 of the Federal Rules of Civil Procedure. The opinion did not approve the settlement.

Order

The court ordered the parties to submit the settlement agreement and a joint letter by May 11, 2021. The letter had to explain the basis for the proposed settlement and why it was fair and reasonable, referring to the factors identified in the court’s cited precedent. It also had to address any incentive payment to the plaintiff and any attorneys’ fee award, including supporting documentation when appropriate.

The court reminded the parties that they could consent to have the assigned magistrate judge decide whether to approve the settlement. It also stated that it would not approve an agreement containing a confidentiality provision without case-specific justification; a release or waiver of unaccrued claims or claims unrelated to wage-and-hour matters without case-specific justification; or a non-disparagement clause that lacked an exception for truthful statements about the plaintiff’s experience litigating the case, unless the parties provided case-specific justification. If such provisions appeared in the agreement, the parties had to say whether they wanted the court to consider approving the agreement with those provisions removed. The court noted that it could approve or reject the agreement but could not rewrite it.

Disposition

The court ordered additional settlement filings; it did not grant final approval of the settlement or dismiss the case in this order.