Quinones, Jr. v. UMVLT LLC

Background

The court stated that Magistrate Judge James Cott had advised it that the parties reached a settlement in this Fair Labor Standards Act (FLSA) action. The FLSA requires an employer that violated overtime-pay requirements to pay unpaid overtime compensation and an equal amount as liquidated damages. The court explained that, when parties settle FLSA claims and seek dismissal under Federal Rule of Civil Procedure 41, the district court must review the settlement, including any proposed attorney-fee award, to determine whether it is fair.

Options for Finalizing the Settlement

The court gave the parties two options, both due by June 7, 2021. First, they could submit the settlement agreement with a joint letter explaining the basis for the settlement and why it was fair and reasonable, addressing the factors identified in the court's cited precedent. The letter also had to address any payment intended to encourage the plaintiff to participate in the case and any proposed attorney-fee award, with supporting documentation when appropriate.

Second, the parties could consent to proceed before Magistrate Judge Cott for all purposes. If they did so, Judge Cott would decide whether to approve the settlement.

Settlement Terms the Court Addressed

The court advised that it would not approve a settlement containing a confidentiality provision unless the parties showed case-specific reasons sufficient to overcome the public's common-law right of access to judicial documents. It also would not approve a release or waiver covering claims that had not yet arisen or claims unrelated to wage-and-hour matters unless the parties showed case-specific justification. The court likewise would not approve a clause barring the plaintiff from making negative statements about a defendant unless it included an exception for truthful statements about the plaintiff's experience litigating the case, or the parties provided case-specific justification for omitting that exception.

If the agreement contained any of these provisions, the parties were directed to state whether they wanted the court to consider approving the agreement with those provisions removed. The court noted that it could approve or reject an FLSA settlement but could not rewrite the agreement itself. The court also noted that judicial approval is not required for an FLSA settlement made through a Rule 68(a) offer of judgment.

Disposition

The court did not approve or reject the settlement in this order. Judge Jesse M. Furman set a deadline and procedures for the parties to seek approval, and ordered that the settlement conference scheduled for June 2, 2021, be adjourned indefinitely.