Bruno v. Cory Realty, Inc.

Background

The plaintiffs brought this action under the Fair Labor Standards Act, a federal law governing wage and overtime requirements. By letter filed September 14, 2022, the parties informed the court that they had reached a settlement in principle.

Court’s analysis

The court explained that an employer violating the overtime-pay requirement must pay the unpaid overtime compensation and an equal amount as additional damages. It also explained that when parties seek to settle and dismiss Fair Labor Standards Act claims under Rule 41 of the Federal Rules of Civil Procedure, the court must review the settlement—including any proposed attorney-fee award—to determine whether it is fair and reasonable.

The court stated that it would not approve a settlement containing a confidentiality provision unless the parties showed case-specific reasons overcoming the public’s right of access to judicial documents. It also stated that it would not approve an overly broad release or waiver covering claims that had not accrued or claims unrelated to wage-and-hour matters unless the parties provided case-specific justification. Finally, it would not approve a provision barring a plaintiff from making negative statements about a defendant unless the provision protected truthful statements about the plaintiff’s experience litigating the case, absent case-specific justification for the broader restriction.

Order

The court ordered the parties to submit the settlement agreement and a joint letter by September 28, 2022. The letter had to explain the basis for the proposed settlement and why any Rule 41 dismissal should be approved as fair and reasonable, address any plaintiff incentive payments, and address any attorney-fee award with supporting documentation when appropriate.

The parties could instead consent to proceed before the assigned magistrate judge for purposes of settlement approval and, if all parties consented, had to file the completed consent form by the same deadline. If the agreement contained provisions the court would not ordinarily approve, the parties had to state whether they wanted the court to consider approval with those provisions removed. The court noted that it could approve or reject the agreement but could not rewrite it.

The court adjourned the September 16 conference and all pending deadlines indefinitely, and directed the clerk to terminate the filing that reported the settlement. The order did not approve or reject the settlement itself.