Olibares v. MK Cuisine Global LLC

Background

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

Settlement-review standard

The court explained that parties generally may not privately settle FLSA claims with prejudice without approval from the district court or the Department of Labor. The court must be satisfied that the settlement is fair and reasonable. It must consider the total circumstances, including:

- the plaintiff’s 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 settlement includes an award of attorney’s fees, the court must separately assess whether those fees are reasonable. Counsel must provide a factual basis for the requested award, including contemporaneous billing records showing each attorney’s date of work, hours spent, and the nature of the work.

Order

Judge Vernon S. Broderick ordered the parties to provide the settlement terms within 30 days 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 agreement included attorney’s fees, the parties had to submit supporting evidence. The order did not approve or reject the settlement.