Thomas v. Arts in Common LLC

Background

The court was informed that the parties had reached a settlement in a case that included claims under the Fair Labor Standards Act (FLSA), a federal law governing certain wage and hour rights. The order explained how the parties could proceed but did not itself approve the settlement, dismiss the case, or enter judgment.

Options for Resolving the FLSA Claims

The court described three alternatives:

1. Court-approved dismissal with prejudice under Rule 41(a)(2). Under Second Circuit precedent, the parties could not dismiss FLSA claims with prejudice through the ordinary voluntary-dismissal procedure in Rule 41(a)(1)(A). They instead had to seek court approval under Rule 41(a)(2). The parties first had to discuss whether to consent to having all further proceedings, including evaluation of the proposed settlement, conducted by the assigned magistrate judge. If both consented, they had to file the required consent form by February 23, 2022. If either party withheld consent, the parties had to notify the court by that date without identifying the nonconsenting party. They then had to submit a joint motion explaining why the settlement was fair by March 2, 2022, unless they proceeded before the magistrate judge.

The motion had to address the fairness factors identified in Wolinsky v. Scholastic Inc. and include the settlement agreement. The court stated that it would not approve settlement agreements containing confidentiality provisions. It also stated that settlement-related documents could not be filed under seal without a particularized showing overcoming the presumption that judicial documents are publicly accessible. If the settlement included attorney’s fees, the parties had to address the fees’ reasonableness under Goldberger v. Integrated Resources, Inc., and plaintiffs’ attorneys had to provide detailed time records.

2. Dismissal without prejudice under Rule 41(a)(1)(A). The court stated that it would accept a stipulation dismissing the FLSA claims without prejudice if the parties also certified that there had been no settlement of those claims. If they could not make that certification, they had to seek court review of the settlement under the first procedure. Any such stipulation and certification was due February 23, 2022.

3. Offer of judgment under Rule 68(a). The parties could instead resolve the case through an offer and acceptance of judgment under Rule 68(a). The court stated that judicial approval was not required for an accepted Rule 68 offer in an action involving FLSA claims. The parties had to submit the executed offer and acceptance, along with a proposed judgment, by February 23, 2022.

Disposition

Judge Gregory H. Woods directed the parties to proceed through one of the three described alternatives. The order itself did not grant or deny a motion, approve the settlement, dismiss the claims, or enter judgment. It was a procedural order establishing the available settlement procedures and deadlines.