Perez v. Perdomo Jr.

Background

Jose Perez brought claims under the Fair Labor Standards Act (FLSA), a federal wage-and-hour law, and New York Labor Law against Orlando Perdomo, Jr. and Perdomo Builders, LLC. In a letter filed June 16, 2022, the parties advised the court that they had reached a settlement in principle. The opinion does not provide the proposed settlement’s financial or other terms.

The court explained that approval is required for an FLSA settlement when dismissal under Federal Rule of Civil Procedure 41 is contemplated. Approval is also required for settling state-law claims on a class-wide basis under Rule 23.

Court’s directives

The court ordered the parties to file, by July 7, 2022, a motion seeking:

- certification of the proposed class; - preliminary approval of the class-wide settlement; and - approval of the FLSA settlement.

The motion papers must include the proposed settlement, a proposed schedule for notifying class members, the period for class members to opt out, preliminary approval, and a fairness hearing, along with a proposal for how notice will be given. The parties must also file a proposed order preliminarily approving the class settlement, providing for notice, and scheduling the fairness hearing.

If the parties contemplated dismissal of the FLSA claims under Rule 41, the court required their supporting memorandum to explain why the settlement was fair and reasonable, using the factors identified in Wolinsky v. Scholastic, Inc. The memorandum also must address any incentive payments to the plaintiffs and any proposed attorney’s fee award, with supporting documentation where appropriate.

Settlement provisions identified by the court

The court stated that it would not approve an agreement containing certain provisions unless the parties showed case-specific reasons for them. These included:

- confidentiality provisions that lacked sufficient justification to overcome the public’s common-law right of access to judicial documents; - releases or waivers covering claims that had not accrued or claims unrelated to wage-and-hour matters; and - non-disparagement provisions barring negative statements without an exception for truthful statements about a plaintiff’s experience litigating the case.

If the agreement contained such provisions, the parties were directed to say whether they wanted the court instead to consider approving the agreement with those provisions removed. The court noted that it could approve or reject an FLSA settlement but could not modify the agreement itself.

Disposition

The order did not approve or reject the settlement. It required further filings for the court’s consideration and adjourned the September 20, 2022 conference and all existing deadlines indefinitely. The court also advised that the parties could consent to have the assigned magistrate judge decide whether to approve the settlement.