Gonzalez Sanchez v. Y and P Enterprises Inc.
- Analisa Torres
- 1:21-cv-00675
- U.S. District Court · Southern District of New York
- 2
In Gonzalez Sanchez v. Y and P Enterprises, Judge Torres required court or Department of Labor approval before dismissing the settled FLSA case.
The plaintiffs, defendants, their attorneys, and any parties involved in the proposed settlement were affected by the requirements for settlement approval, attorney-fee documentation, and possible dismissal with prejudice.
What happened
In Gonzalez Sanchez v. Y and P Enterprises Inc., the parties told the court they had reached a settlement in a Fair Labor Standards Act case. The opinion does not describe the settlement’s terms.
The court said the case could not be dismissed with prejudice based on the settlement unless the court or the Department of Labor approved it. The parties had to file a joint request with the settlement agreement, or documentation of Department of Labor approval, by June 14, 2021. The court also said pending motions were moot and canceled all conferences.
Judge Analisa Torres required any court approval request to explain why the settlement was fair and reasonable, address possible recovery, litigation risks, bargaining, possible fraud or coordination, any dispute about hours or compensation, and requested attorney fees. The court also required supporting billing records for any fee request and warned that it generally would not approve sealed or redacted agreements, sweeping nondisclosure terms, or broad releases unrelated to Fair Labor Standards Act issues.
The detailed version
- Gonzalez Sanchez v. Y and P Enterprises Inc. · No. 1:21-cv-00675
- Analisa Torres
- May 12, 2021
Background
The plaintiffs are Martin Gonzalez Sanchez, Lediz Marin, Hector Gonzalez Sanchez, Leoncio Noe, and Damaso Cesar Gonzalez Romano, also known as Cesar Gonzalez. They sued Y AND P ENTERPRISES INC (D/B/A CORNER CAFE & BAKERY), Paul Dimino, Yura Mohr, Lucas Santos, and Susie Rhim. The plaintiffs brought the case individually and on behalf of others similarly situated under the Fair Labor Standards Act (FLSA). The parties advised the court that they had reached a settlement.
Settlement approval requirement
The court stated that the action could not be dismissed with prejudice based on the settlement unless the settlement agreement was approved either by the court or by the Department of Labor. To seek dismissal with prejudice, the parties had to file by June 14, 2021, either a joint letter request asking the court to approve the settlement or documentation showing Department of Labor approval. The court required the letter request to be filed publicly with the settlement agreement.
The request had to explain why the proposed settlement was fair and reasonable. It also had to address the plaintiffs’ possible recovery, the burdens and expenses the settlement would avoid, the seriousness of the parties’ litigation risks, whether experienced counsel negotiated at arm’s length, and the possibility of fraud or coordination. The parties also had to address whether a genuine dispute existed about the number of hours worked or the compensation owed, and how much of the settlement the plaintiffs’ attorney would seek as fees.
Attorney fees and settlement terms
Any request for attorney fees had to include supporting documentation, including contemporaneous billing records for each attorney showing the date, hours worked, and nature of the work. The court stated that, absent special circumstances, it would not approve a settlement filed under seal or in redacted form. It also stated that, absent compelling circumstances, it would not approve an agreement containing sweeping nondisclosure provisions or broad releases of claims unrelated to FLSA issues.
Disposition
The court ruled that any pending motions were moot and vacated all conferences. The opinion does not state that the court approved the settlement or dismissed the action; instead, it set conditions for any requested dismissal with prejudice. Judge Analisa Torres entered the order on May 12, 2021.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.