Tolentino v. Thai Smile Restaurant Corp.

Background

The court was informed that the parties had reached a settlement in Jeronimo Tolentino’s case under the Fair Labor Standards Act, a federal law governing wages and working conditions. The defendants were Thai Smile Restaurant Corp. (doing business as Tue Thai Food), Prasong Pornpichayanurak, and Suphakit Saeue, also known as Nick.

Settlement-approval requirements

The court stated that the action could not be dismissed with prejudice based on the settlement unless either the court or the Department of Labor approved the settlement. If the parties sought dismissal with prejudice, they had to file either a joint letter motion asking the court to approve the agreement or documentation showing Department of Labor approval. The filing, including the settlement agreement, was due on July 13, 2022, and had to be made on the public docket.

The requested court approval had to explain why the proposed settlement was fair and reasonable. The court identified factors including Tolentino’s possible recovery, the burdens and expenses avoided through settlement, the litigation risks, whether experienced counsel negotiated the agreement at arm’s length, and the possibility of fraud or collusion. The filing also had to address whether a genuine dispute existed about the hours worked or compensation owed and how much Tolentino’s attorney would seek in fees.

Any request for attorney fees had to include contemporaneous billing records showing, for each attorney, the dates, hours, and work performed. The court also stated that, absent special circumstances, it would not approve a settlement filed under seal or in redacted form. Without compelling circumstances, it would not approve sweeping nondisclosure provisions or releases covering claims unrelated to Fair Labor Standards Act issues.

Other directions and ruling

The parties could voluntarily consent to have Magistrate Judge Sarah Netburn oversee settlement approval, but they were free to withhold consent without negative consequences. If they consented by June 29, 2022, and the court approved the form, future proceedings would be conducted before Judge Netburn. Any appeal would go directly to the United States Court of Appeals for the Second Circuit.

Judge Analisa Torres ruled that any pending motions were moot and vacated all conferences and deadlines. The opinion did not approve the settlement or state that the case was dismissed with prejudice.