Hong v. Lin's Garden Restaurant, Inc.

Background

The court was advised that the parties had reached a settlement in this Fair Labor Standards Act (FLSA) case. The court explained that parties cannot privately settle FLSA claims without approval from the district court or the Department of Labor. The settlement must be shown to be fair and reasonable.

Required Fairness Review

The court stated that it would consider the total circumstances, including five factors: the plaintiff’s possible recovery; the extent to which the settlement would avoid expected burdens and expenses of proving the claims and defenses; the seriousness of the litigation risks; whether experienced counsel reached the agreement through arm’s-length bargaining; and the possibility of fraud or collusion.

If the settlement included attorney’s fees, the court stated that it would separately evaluate whether those fees were reasonable. The parties were required to submit evidence supporting any fee award, including contemporaneous billing records showing, for each attorney, the date, hours worked, and nature of the work.

Order

The court ordered the parties to submit the settlement terms within 30 days of the order. It also ordered them to submit a joint letter of no more than five pages explaining why the settlement was a fair and reasonable compromise of disputed issues and addressing the five listed factors. If the agreement included attorney’s fees, the parties also had to submit factual support for the fee award. The order required these materials for the court’s review and did not state that the court approved or rejected the settlement. Judge Vernon S. Broderick issued the order.