Colon v. Montefiore Medical Center

Background

The court received notice that, through mediation, Jesse Colon and Montefiore Medical Center had reached an agreement resolving all issues. The claims were brought under the Fair Labor Standards Act (FLSA), a federal law governing wage and hour rights.

Court’s Order

The court ordered that the parties could not dismiss the action with prejudice based on their settlement unless the settlement agreement was approved by either the court or the Department of Labor. A dismissal with prejudice would end the case and bar the same claims from being brought again. If the parties sought that type of dismissal, they had to file a joint letter motion asking the court to approve the settlement, together with the settlement agreement, or provide documentation of Department of Labor approval.

The court required the motion to explain why the settlement was fair and reasonable. It identified factors including Colon’s possible recovery, the burdens and expenses the settlement would avoid, the litigation risks, whether experienced counsel negotiated at arm’s length, and the possibility of fraud or collusion. The motion also had to address whether there was a genuine dispute about the hours worked or compensation owed and how much of the settlement Colon’s attorney would seek as fees. The court stated that, absent special circumstances, it would not approve a settlement filed under seal or in redacted form.

The court also warned that it was unlikely to approve a general release, or a release of claims unrelated to the wage-and-hour claims in the complaint and related state-law claims. If the parties believed unusual circumstances justified a broader release, their motion had to explain why. The court warned that failing to comply could lead to denial of the motion and sanctions against the attorneys.

Alternative Without-Prejudice Procedure

The court noted that the Second Circuit had not decided whether parties may settle an FLSA case without court or Department of Labor approval by filing a stipulation under Federal Rule of Civil Procedure 41(a)(1)(A). If the parties chose that route, they had to file the stipulation publicly within 30 days. It also had to include an affirmation from Colon’s counsel stating that Colon had been clearly advised that the settlement would not prevent another lawsuit against the same defendants and confirming that the settlement contained no release of the defendants. The court warned that this option could allow the case to be reopened in the future.

Disposition

Judge Valerie Caproni did not approve the settlement and did not dismiss the action. She ordered the parties to file either the required settlement-approval materials or the alternative stipulation by June 10, 2021. If neither was filed, the court set a conference for June 11, 2021, at 10:00 a.m.