Reyes v. Richard Buses Inc.
- Jesse Furman
- 1:21-cv-05564
- U.S. District Court · Southern District of New York
- 2
In Reyes v. First Steps Trans., Judge Furman ordered the parties to submit their proposed wage-settlement agreement for fairness review.
Maria Reyes, First Steps Trans., Inc., and their counsel were required to submit the settlement materials and address the court’s approval requirements.
What happened
Maria Reyes sued First Steps Trans., Inc. under the Fair Labor Standards Act, a federal law that requires overtime pay and additional damages for violations. The parties told the court they had reached a settlement.
The court did not approve the settlement at this stage. It ordered the parties to submit the agreement and a joint letter by October 21, 2022, explaining why the proposed settlement and any attorney’s fees, incentive payment, or other terms were fair and reasonable.
Judge Jesse M. Furman also warned that the court would not approve agreements containing broad confidentiality, unrelated or unaccrued claim releases, or certain non-disparagement provisions unless the parties justified them. The parties could instead consent to have the assigned magistrate judge review the settlement.
The detailed version
- Reyes v. Richard Buses Inc. · No. 1:21-cv-05564
- Jesse Furman
- Oct. 12, 2022
Background
Maria Reyes brought this action against First Steps Trans., Inc. under the Fair Labor Standards Act (FLSA), which requires covered employers to pay overtime wages and, for violations, an equal amount as liquidated damages. In a letter filed October 7, 2022, the parties informed the court that they had reached a settlement.
Court’s Analysis
The court explained that an FLSA settlement followed by dismissal under Rule 41 of the Federal Rules of Civil Procedure must be reviewed to ensure that it is fair. The review also covers any proposed award of attorney’s fees. The court cited factors used to evaluate the fairness and reasonableness of FLSA settlements and fee awards.
The order stated that the court would not approve a settlement containing a confidentiality provision unless the parties showed case-specific reasons overcoming the public’s common-law right of access to judicial documents. It also would not approve a release or waiver covering claims that had not accrued or claims unrelated to wage-and-hour matters unless specifically justified. Finally, it would not approve a clause barring a plaintiff from making negative statements about the defendant unless the clause protected truthful statements about the plaintiff’s experience litigating the case, or unless the parties provided case-specific justification for omitting that protection.
Order
The court ordered the parties, by October 21, 2022, to submit the settlement agreement and a joint letter explaining the basis for the proposed settlement and why any contemplated Rule 41 dismissal should be approved as fair and reasonable. The letter also had to address any incentive payment to Reyes and any attorney’s fee award to her counsel, including supporting documentation when appropriate.
The court noted that the parties could consent to proceed for all purposes before the assigned magistrate judge, who would then decide whether to approve the settlement. If the agreement included a disfavored provision, the parties had to state whether they wanted the court to consider approving the agreement with that provision stricken. The court did not itself approve or reject the settlement in this order.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.