Francisco v. Han-Bae Corp.

Background

The court was advised that the parties had reached a settlement in this Fair Labor Standards Act (FLSA) case. The opinion does not provide the settlement amount, the settlement terms, or the specific FLSA claims.

The court stated that parties may not privately settle FLSA claims with prejudice without approval from the district court or the Department of Labor. The court therefore had to determine whether the proposed agreement was a fair and reasonable compromise of disputed issues.

Required Settlement Information

The court directed the parties to provide the settlement terms within 30 days of the order. It also required a joint letter of no more than five pages explaining why the settlement was fair and reasonable. The letter was to address, among other matters, the following factors:

- the plaintiffs’ possible recovery; - the burdens and expenses the settlement would avoid in proving the claims and defenses; - the seriousness of the litigation risks; - whether experienced counsel negotiated the agreement at arm’s length; and - the possibility of fraud or collusion.

If the agreement included attorney’s fees, the court required evidence providing a factual basis for the fee award. The court specified that this evidence should include contemporaneous billing records identifying, for each attorney, the date, hours worked, and nature of the work.

Disposition

Judge Vernon S. Broderick ordered the parties to submit the settlement terms, the joint explanatory letter, and any required attorney-fee evidence. The order did not approve or reject the settlement and did not decide the underlying FLSA claims.