Perez v. Buyk Corp.
- Lorna Schofield
- 1:21-cv-11168
- U.S. District Court · Southern District of New York
- 2
In Perez v. Buyk Corp., Judge Schofield denied approval of the FLSA settlement because its release was too broad, giving the parties a chance to amend or litigate.
The ruling affected Michael Perez and the defendants in the action, including Buyk Corp. and the other released parties identified in the proposed settlement.
What happened
In Perez v. Buyk Corp., the parties submitted a proposed settlement and attorney billing details in a wage-and-hour case under the Fair Labor Standards Act. The court was required to review whether the settlement was fair and reasonable.
The court found that the settlement’s release was overly broad and vague. It covered claims about wage payments during or after employment and other wage-related claims, rather than being limited to the wage-and-hour issues in this case.
Judge Lorna G. Schofield denied approval of the settlement in its current form. She ordered the parties to say by October 24, 2022, whether they would amend the agreement or continue the litigation; any amended agreement had to address the release problem.
The detailed version
- Perez v. Buyk Corp. · No. 1:21-cv-11168
- Lorna Schofield
- Oct. 3, 2022
Background
Michael Perez filed a letter with a proposed settlement agreement and attorney billing details in this Fair Labor Standards Act (FLSA) action. The court explained that settlements in FLSA cases must be reviewed to determine whether they are fair and reasonable.
Issue
The proposed settlement included a release provision. Section 1(a) covered any other claims or proceedings against Food Start Inc. and numerous related persons and entities involving wage payments during or after employment, including facts known or existing through the date the release was signed. Other sections covered every wage-related claim, demand, cause of action, charge, and grievance against the released parties.
Court’s analysis
The court held that the release was overly broad and vague. It said that an FLSA settlement release must be expressly limited to the plaintiff’s wage-and-hour issues in the immediate case. A release covering wage payments during or after employment could extend beyond the claims being settled and was inconsistent with the protective purposes of the FLSA settlement-review requirement.
The court gave an example of a narrower release it had previously approved—one limited to claims relating specifically to the wage-and-hour claims in the litigation that occurred by the agreement’s effective date.
Disposition
The court ordered that approval of the settlement agreement was denied at this time and stated that the agreement was not approved in its current form. By October 24, 2022, the parties had to file a letter stating whether they would amend the settlement agreement or proceed with the litigation. If they chose to amend it, they had to file an amended agreement addressing the overly broad release.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.