Cortes v. DS Brooklyn Portfolio Owner LLC

Background

The court was advised that the parties had reached a settlement in principle in this Fair Labor Standards Act (FLSA) case. The opinion does not state the settlement amount, its other terms, or the specific wage claims at issue.

Legal Standard

The court stated that the parties could not privately settle FLSA claims with final effect without approval from the district court or the Department of Labor. The court therefore had to determine whether the proposed settlement was fair and reasonable. It identified five relevant considerations: the plaintiffs’ possible recovery; the burdens and expenses the settlement would avoid; the parties’ litigation risks; whether experienced counsel negotiated at arm’s length; and the possibility of fraud or collusion.

If the settlement included attorney fees, the court also had to assess whether those fees were reasonable. Counsel had to provide a factual basis for the award, including contemporaneous billing records showing each attorney’s date of work, hours spent, and work performed.

Order

The court ordered the parties to provide the settlement terms by June 13, 2022. It also ordered them to submit a joint letter of no more than five pages explaining why the settlement represented a fair and reasonable compromise of disputed issues, including information about the five factors identified by the court. If the agreement included attorney fees, the parties had to submit supporting evidence and billing records. This order required information for the court’s review; the opinion does not state that the court approved or rejected the settlement.