Sanchez v. Five Brothers Auto Spa and Lube Corp.

Background

Juan Mercado Sanchez and Alejandro Sanchez sued Five Brothers Auto Spa and Lube Corp. and Hak Sand Meier, individually. The opinion describes the matter as a wage-and-hour case under the Fair Labor Standards Act. The parties submitted a proposed judgment on June 28, 2022.

Court’s Analysis

The court explained that the proposed settlement required court approval under the Second Circuit’s decision in Cheeks v. Freeport Pancake House, Inc. The parties therefore had to file a joint letter motion asking the court to approve the settlement. The motion and settlement agreement had to be filed on the public docket by August 28, 2022.

The letter motion had to explain why the settlement was fair and reasonable. It also had to address: (1) the plaintiffs’ possible recovery; (2) the burdens and costs the settlement could avoid in proving the claims and defenses; (3) the seriousness of the parties’ litigation risks; (4) whether experienced counsel negotiated at arm’s length; and (5) the possibility of fraud or collusion. The letter also had to discuss whether a genuine dispute existed about the hours worked or compensation owed and how much the plaintiffs’ attorney would seek in fees.

Any request for attorney fees had to include contemporaneous billing records showing, for each attorney, the date, time spent, and work performed. The court further stated that, absent special circumstances, it would not approve a settlement filed under seal or in redacted form. Absent compelling circumstances, it also would not approve a settlement containing broad nondisclosure provisions or releases of claims unrelated to Fair Labor Standards Act issues.

Disposition

The court ordered the parties to file the joint letter motion and settlement agreement by August 28, 2022. The order did not approve or reject the proposed settlement. The order was signed by Magistrate Judge Valerie Figueredo on July 28, 2022.