Guerra v. Bunny Deli Inc.

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 amount or other substantive terms of the proposed settlement.

Court’s analysis

The court explained that FLSA claims cannot be privately settled without approval from the district court or the Department of Labor. The settlement must be shown to be fair and reasonable. The court identified five relevant considerations: the plaintiffs’ possible recovery; the extent to which settlement would avoid the burdens and expenses of proving the claims and defenses; the seriousness of the parties’ litigation risks; whether experienced counsel negotiated the agreement at arm’s length; and the possibility of fraud or collusion.

The court also stated that any attorney’s-fee provision must be assessed separately. Counsel must provide a factual basis for the requested fees, including contemporaneous billing records showing, for each attorney, the date, hours spent, and nature of the work.

Order

Judge Vernon S. Broderick ordered the parties to provide the settlement terms by August 11, 2022, so the court could determine whether they complied with the FLSA and reflected a reasonable compromise of disputed issues. The parties also had to submit a joint letter of no more than five pages explaining why they believed the settlement was fair and reasonable, including information about the five identified factors. If the settlement included attorney’s fees, they had to submit supporting evidence. The order did not approve or reject the settlement.