Pelaez v. JCJ Bakery Corp.

Background

The parties informed the court by letter filed July 8, 2021, that they had reached a settlement in principle in this Fair Labor Standards Act case. The opinion explains that the law requires an employer violating overtime-pay requirements to pay unpaid overtime compensation and an equal amount as additional damages. It also explains that a court must review an FLSA settlement and any proposed attorney’s-fee award for fairness when the parties seek dismissal under Federal Rule of Civil Procedure 41.

Court’s directives

The court ordered the parties to submit the settlement agreement and a joint letter by August 6, 2021. The letter must explain the basis for the proposed settlement and why the settlement should be approved as fair and reasonable, referring to the factors discussed in the cited authority. It must also address any incentive payment to the plaintiff and any attorney’s-fee award to plaintiff’s counsel, including supporting documentation when appropriate.

The court stated that it would not approve a settlement containing a confidentiality provision unless the parties showed case-specific reasons sufficient to overcome the public-access right concerning judicial documents. It likewise would not approve a release or waiver covering claims that had not accrued or claims unrelated to wage-and-hour matters unless the parties justified that breadth with case-specific reasons. The court also would not approve a provision barring the plaintiff from making negative statements about a defendant unless it preserved truthful statements about the plaintiff’s experience litigating the case, absent case-specific reasons justifying the broader restriction. If the agreement contained any of these provisions, the parties were directed 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.

Ruling and procedural status

Judge Jesse M. Furman ordered the parties to provide the settlement materials; he did not approve or reject the settlement in this order. He advised that the parties could consent to have the assigned Magistrate Judge decide whether to approve the settlement. The scheduled August 12, 2021 pretrial conference and all pending deadlines were adjourned indefinitely.