Basurto Franco v. Agora Turkish Restaurant Inc.

Background

The court was advised that the parties had reached a settlement in a case brought by Enedino Basurto Franco, Humberto Galindo Olivera, Wilver Basurto Franco, and Fidel Gaspar Ayala, individually and on behalf of others similarly situated, against Agora Turkish Restaurant Inc., doing business as Agora, Mustafa Selcuk Ozen, also known as Serchu and Cachando, and Sema Ozaslan Oze. The settlement included claims under the Fair Labor Standards Act (FLSA).

Dismissal With Prejudice

The court explained that under the Second Circuit's decision in Cheeks v. Freeport Pancake House, Inc., the parties could not dismiss FLSA claims with prejudice—that is, permanently—through a notice of voluntary dismissal under Federal Rule of Civil Procedure 41(a)(1)(A). They instead had to seek court approval under Rule 41(a)(2).

To pursue that route, the parties were ordered first to discuss whether they would consent under 28 U.S.C. § 636(c) to having the assigned magistrate judge conduct all further proceedings, including review of the proposed settlement. If both sides consented, they had to file a completed consent and reference form by July 12, 2021. If either side withheld consent, the parties had to file a joint letter by that date stating that they did not consent, without identifying the party or parties withholding consent. The order stated that withholding consent would have no negative consequences.

If the parties did not consent to magistrate-judge proceedings, they had to submit a joint motion by July 19, 2021, explaining why the settlement was fair and should be approved. The motion had to address the factors identified in Wolinsky v. Scholastic Inc. and include the settlement agreement as an exhibit. The court stated that it would not approve a settlement containing a confidentiality provision. It also stated that settlement-related materials could not be filed under seal unless the parties made a particularized showing overcoming the presumption that judicial documents are publicly accessible.

If the settlement included attorney fees, the parties had to address whether the fees were reasonable under the framework in Goldberger v. Integrated Resources, Inc. Plaintiffs' attorneys also had to attach detailed records of the time they spent working on the case.

Dismissal Without Prejudice

As a second option, the parties could submit a stipulation under Rule 41(a)(1)(A) dismissing the FLSA claims without prejudice. The court stated that it would accept such a stipulation and directed the parties to submit it by July 12, 2021, as a proposed order through the court's electronic filing system.

Disposition

The court directed the parties to proceed under one of the two described alternatives. The order did not approve the settlement, enter a dismissal, or decide the underlying FLSA claims.