Benitez v. 58 west llc

Background

Jose Benitez brought this action under the Fair Labor Standards Act, a federal law governing wage and overtime pay. On February 14, 2022, he filed a notice of voluntary dismissal with prejudice. The opinion does not state that the court approved the dismissal or identify the terms of any settlement.

Court’s Analysis

The court explained that the Fair Labor Standards Act requires an employer that violates overtime-pay requirements to pay unpaid overtime compensation and an equal amount as liquidated damages. It also explained that when parties settle Fair Labor Standards Act claims and seek dismissal with prejudice under Federal Rule of Civil Procedure 41, the court must review the settlement, including any proposed attorney’s fee award, for fairness and reasonableness.

The court therefore ordered Benitez to submit a letter by February 17, 2022, clarifying whether the dismissal was intended to be without prejudice or with prejudice. If it was without prejudice, the court stated that it would order the dismissal without further inquiry. If it was with prejudice, the parties had to seek approval of any settlement or otherwise explain the basis for the dismissal.

Order

The court ordered that, if the parties intended to dismiss with prejudice, they had to submit the settlement agreement and a joint letter by February 28, 2022. The letter had to explain the proposed settlement’s basis and why it was fair and reasonable, and address any incentive payment to Benitez and any attorney’s fee award to his counsel, with supporting documentation when appropriate.

The court stated that it would not approve a settlement containing a confidentiality provision without case-specific justification overcoming the public’s common-law right of access to court documents. It also stated that it would not approve a release or waiver covering claims that had not accrued or claims unrelated to wage-and-hour matters without case-specific justification. A provision barring Benitez from making negative statements about a defendant would also need an exception for truthful statements about his experience litigating the case, unless the parties provided case-specific justification for omitting that exception. If a settlement contained any of these provisions, the parties had to say whether they wanted the court to consider approving the agreement with those provisions stricken; the court noted that it could approve or reject an agreement but could not rewrite it.

The parties were reminded that they could consent to have the assigned magistrate judge decide whether to approve a settlement. The scheduled March 15, 2022 pretrial conference and all pending deadlines were adjourned without a new date. Because defense counsel had not yet appeared, the court ordered plaintiff’s counsel to serve the order on the defendants within two business days and file proof of service, after which defense counsel had to file notices of appearance.

Disposition

The order did not finally dismiss the action. It required clarification and, if dismissal with prejudice was pursued, further settlement submissions and court review.