Tung v. Jade Spoon Asian Cuisine Inc.

Background

The parties reported that they had settled the dispute, including claims under the Fair Labor Standards Act (FLSA), a federal law governing minimum wages, overtime, and related employment protections. The parties also consented to the court’s authority to handle all remaining proceedings under 28 U.S.C. § 636(c).

Court’s Analysis

The court explained that, in the Second Circuit, parties generally cannot privately settle FLSA claims through a dismissal with prejudice under Federal Rule of Civil Procedure 41 without approval from the district court or the U.S. Department of Labor. The court therefore required the parties to submit a joint letter requesting judicial approval, a copy of the written settlement agreement signed by all parties, and any contingency-fee agreement and time and expense records needed to support an award of attorneys’ fees and costs.

The joint letter had to explain why the settlement was fair and reasonable under the totality of the circumstances and address the nine factors identified in Wolinsky v. Scholastic Inc. The court noted that confidentiality provisions are rarely appropriate in wage-and-hour settlements and cautioned that non-disparagement provisions should not prevent the plaintiff from making truthful statements about his experience litigating the case. It also warned that courts in the Second Circuit regularly reject provisions preventing a plaintiff from having a future employment relationship with the defendant.

The court explained that release provisions are often approved when limited to the wage-and-hour claims asserted or that could have been asserted in the case. A broader release may be approved in appropriate circumstances when it is mutual, negotiated by competent counsel, and concerns former employees with no ongoing relationship with the employer.

Order and Effect

The court ordered the parties to submit the required materials through the electronic filing system no later than April 11, 2022. Any proposed attorneys’ fee award had to be included in the written settlement agreement and supported by properly authenticated records, including information sufficient for a lodestar calculation—a calculation based on reasonable hours multiplied by reasonable hourly rates. Claimed costs had to be supported by invoices, receipts, or a sworn statement.

The order required submission of the settlement for review; it did not itself approve or reject the settlement. Judge Andrew E. Krause entered the order on March 25, 2022.