Garcia v. Pan Lu
- Vincent Briccetti
- 7:21-cv-08221
- U.S. District Court · Southern District of New York
- 2
In Garcia v. Pan Lu, Judge Briccetti declined to approve a wage-and-hour settlement because its release was too broad, while allowing revision.
Oscar Garcia and defendants Jielan Pan Lu, 158 Willow St LLC, 74 Oak St LLC, Xiaocun Lu, also known as George Lu, and 897 Nepperhan Property LLC—the parties to the proposed settlement.
What happened
Garcia v. Pan Lu is a wage-and-hour case under the Fair Labor Standards Act. Oscar Garcia filed a proposed settlement agreement and a statement explaining its basis.
The court objected to the agreement’s mutual release. The release covered all known and unknown claims against the defendants and related people and entities, including claims unrelated to this case or Garcia’s employment.
Judge Briccetti declined to approve the settlement at that time. He allowed the parties until September 15, 2022, to submit a revised agreement and explanation that narrowed the release or explained why it was fair and reasonable, and said the court was otherwise tentatively inclined to approve the settlement.
The detailed version
- Garcia v. Pan Lu · No. 7:21-cv-08221
- Vincent Briccetti
- Sept. 1, 2022
Background
Oscar Garcia brought this case under the Fair Labor Standards Act, a federal wage-and-hour law. On August 31, 2022, Garcia filed a proposed settlement agreement and a statement explaining the basis for the agreement, as required by the Second Circuit’s decision in Cheeks v. Freeport Pancake House, Inc.
The Proposed Release
Section 3 of the proposed agreement contained a mutual general release. Garcia would release all known and unknown claims against the defendants and a broad group of people and entities related to or affiliated with them. The defendants would likewise release all known and unknown claims against Garcia.
The court found that the release was much broader than the claims related to this lawsuit or Garcia’s employment relationship with the defendants. Citing another Southern District of New York decision, the court stated that releases in Fair Labor Standards Act cases should not waive practically any possible claim, including unknown claims unrelated to wage-and-hour issues. It concluded that Section 3 was too sweeping to be fair and reasonable.
Ruling and Next Step
The court declined, at that time, to approve the proposed settlement agreement. It allowed the parties to file, by September 15, 2022, a revised agreement signed by all parties and a revised explanation of the settlement’s basis. The revised filing had to change Section 3 or explain why the broad release was fair and reasonable to Garcia. The court stated that it was otherwise, at least tentatively, inclined to approve the settlement.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.