Mauricio v. Tiramisu Restaurant, LLC

Background

This wage-and-hour case was brought under the Fair Labor Standards Act. The parties consented to the jurisdiction of United States Magistrate Judge James L. Cott and submitted a joint letter and fully executed settlement agreement for court approval. The approval requirement arose from the Second Circuit’s decision in Cheeks v. Freeport Pancake House.

The agreement required payment under a lengthy schedule. The court noted the defendants’ apparent financial situation resulting from the COVID-19 pandemic and explained that possible difficulty collecting damages supported finding the settlement reasonable.

Court’s Analysis

After reviewing the parties’ submissions and considering that the court had participated in a lengthy settlement conference, the court found that all settlement terms appeared fair and reasonable under the totality of the circumstances. This included the provision allocating attorney’s fees as one-third of the settlement amount. The court clarified that approving that allocation did not approve the hourly rate of the plaintiff’s counsel.

The agreement also contained a one-way non-disparagement provision. The court said it strongly preferred mutual non-disparagement clauses, but found this provision acceptable because it did not prevent Mauricio from making truthful statements. The court identified the ability to make truthful statements as the most critical element of a non-disparagement provision in a wage-and-hour settlement.

Disposition

The court approved the proposed settlement. It retained jurisdiction over the case, and would reopen it if necessary, solely to enforce the parties’ settlement. The Clerk was directed to close the case.