Yu v. Ollies44 LLC

Background

Shao Cong Yu filed this action on December 3, 2021, asserting claims under the Fair Labor Standards Act (FLSA). On February 1, 2022, Yu filed a notice of voluntary dismissal without prejudice under Federal Rule of Civil Procedure 41(a)(1)(A)(i). A dismissal without prejudice generally does not bar refiling, but the order does not discuss any future filing.

Settlement Review

The court explained that when a plaintiff voluntarily dismisses an FLSA action under Rule 41(a)(1)(A), the court must determine whether the parties reached an FLSA settlement. If they did, the court must review the settlement for fairness and reasonableness. The court identified five relevant considerations: Yu’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 court also stated that any attorney’s-fee provision must be reviewed separately. Counsel must provide a factual basis for the requested fees, including contemporaneous billing records showing, for each attorney, the date, hours worked, and nature of the work.

Order

The court ordered the parties to file a letter within 21 days stating whether there had been any settlement, including whether Yu or his counsel received anything in exchange for dismissing the action. If the parties settled, they must provide the settlement terms and explain, in no more than five pages, why the settlement is a fair and reasonable compromise of disputed issues. They must also provide supporting evidence for any attorney’s fees. If there was no settlement, the letter must explain why Yu filed a notice of voluntary dismissal without prejudice after commencing the action. The order did not decide whether a settlement existed or whether any settlement was fair.