Robles Sanchez v. Payam Inc.

Background

The court was notified on September 13, 2022, that mediation had resulted in an agreement resolving all issues. The opinion identifies the action as involving claims under the Fair Labor Standards Act (FLSA), a federal law governing wages and working hours.

Order concerning dismissal with prejudice

The court ordered that the parties could not dismiss the action with prejudice based solely on their agreement unless the settlement was approved by either the court or the Department of Labor. If the parties wanted court approval, they had to file a joint letter motion and the settlement agreement on the public docket by October 13, 2022. Alternatively, they could provide documentation of Department of Labor approval.

The court directed any approval motion to explain why the proposed settlement was fair and reasonable. At a minimum, it had to address: the plaintiff’s possible recovery; the burdens and expenses the settlement would avoid; the seriousness of the litigation risks; whether experienced counsel negotiated the agreement at arm’s length; the possibility of fraud or collusion; whether there was a genuine dispute about the hours worked or compensation owed; and the amount of attorney fees sought from the settlement.

The court stated that, absent special circumstances, it would not approve a settlement filed under seal or in redacted form. It also warned that it was unlikely to approve a general release, or a release of claims not raised in the complaint and unrelated to FLSA or related state-law wage-and-hour claims. If the parties believed unusual circumstances justified a broader release, the approval motion had to explain why. The court warned that failing to comply could lead to denial of the motion and sanctions against the attorneys.

Possible dismissal without prejudice

The court noted that the Second Circuit had not decided whether the parties could settle an FLSA case without court or Department of Labor approval and dismiss it without prejudice under Federal Rule of Civil Procedure 41(a)(1)(A). If the parties chose that route, they had to file a Rule 41(a)(1)(A) stipulation on the public docket within 30 days. The stipulation had to include an affirmation from the plaintiff’s counsel stating that the plaintiff had been clearly advised that the settlement would not prevent another lawsuit against the same defendants and affirming that the settlement agreement contained no release of the defendants.

The court warned that this option could allow the case to be reopened in the future. If no qualifying letter or stipulation was filed by October 13, 2022, the court ordered a conference for October 14, 2022, at 10:00 a.m. in Courtroom 443 of the Thurgood Marshall U.S. Courthouse.

Disposition

This order did not approve the settlement or dismiss the action. It established the procedures and filing requirements for seeking approval or pursuing a dismissal without prejudice.