Gonzalez Gonzalez v. Treadwell Park LLC

Background

The parties submitted a stipulation of voluntary dismissal with prejudice as to Plaintiff Abel Gonzalez Gonzalez on February 15, 2022. The case involves claims under the Fair Labor Standards Act (FLSA), a federal wage-and-hour law.

Court’s analysis

The court explained that, under Second Circuit precedent, the parties could not dismiss an FLSA action with prejudice based on a settlement unless the settlement was approved by the court or the Department of Labor. The court also noted that the Second Circuit had left open whether the parties could settle an FLSA case without court or Department of Labor approval and dismiss it without prejudice under Federal Rule of Civil Procedure 41(a)(1)(A).

Order

The court ordered that, if the parties wished to dismiss the action with prejudice, they had to file a joint letter by February 25, 2022, explaining why the case was being dismissed with prejudice as to Plaintiff Gonzalez if there was no settlement.

Alternatively, if the parties withdrew the previously filed stipulation and submitted a stipulated dismissal without prejudice, the letter had to include Plaintiff’s counsel’s certification that: (1) Plaintiff had been clearly advised that the dismissal would not prevent him from filing another lawsuit against the same defendants concerning the wage-and-hour claims in this case; and (2) Plaintiff had not provided any release to the defendants.

If the parties had a settlement agreement, the court required them to file a joint letter motion asking the court to approve the settlement or documentation showing Department of Labor approval. The filing and settlement agreement had to be placed on the public docket by February 25, 2022. The letter motion had to explain why the settlement was fair and reasonable, including the plaintiff’s possible recovery, the burdens and expenses avoided, litigation risks, whether experienced counsel negotiated at arm’s length, and the possibility of fraud or collusion. It also had to address whether there was a genuine dispute about hours worked or compensation owed and the amount of attorney’s fees sought.

The court stated that, absent special circumstances, it was unlikely to approve a settlement filed under seal or in redacted form. It also warned that it was unlikely to approve a general release or a release of claims unrelated to the wage-and-hour claims in the complaint and related state-law claims. The court said that failure to explain an unusually broad release could lead to summary denial of the motion and sanctions against the attorneys.

Disposition

Judge Valerie Caproni did not approve a settlement or enter the requested dismissal in this order. Instead, she ordered the parties to submit the required letter, dismissal filing, settlement-approval motion, or Department of Labor documentation by February 25, 2022.