Encarnacion v. City Catering Cafe Inc.

Background

The plaintiffs brought an action for damages under the Fair Labor Standards Act, 29 U.S.C. § 201 et seq., and the New York Labor Law. The parties jointly requested approval of their settlement agreement and submitted a fully executed copy on September 21, 2022.

Court’s Review

The court explained that a federal court must determine whether a settlement of a Fair Labor Standards Act case is fair and reasonable and resulted from arm’s-length negotiation rather than employer overreaching. The court reviewed the settlement agreement and the parties’ joint letter. Its review considered, among other things, prior proceedings, the risks, burdens, and costs of continuing the case, the possible range of recovery, whether the agreement resulted from arm’s-length bargaining between experienced counsel or the parties, the amount of attorney’s fees, and the possibility of fraud or collusion.

The court noted that the agreement contained no confidentiality restrictions, narrowly limited the release to wage-and-hour claims, and set attorney’s fees within a fair, reasonable, and acceptable range.

Ruling and Disposition

The court found the settlement agreement fair and reasonable and approved it. Because the case was resolved by settlement, the court dismissed and discontinued it in its entirety, with prejudice, without costs or fees to any party except as provided in the settlement agreement. The Clerk of Court was directed to terminate all motions and deadlines and close the case.