Omeda v. Jannah Inc.

Background

The parties informed the court that they had reached a tentative settlement in this Fair Labor Standards Act (FLSA) action. The court explained that FLSA settlements followed by dismissal generally require court or Department of Labor approval. The court must review the settlement, including any proposed attorney’s fee award, for fairness and reasonableness.

Orders concerning the settlement

The court ordered the parties to submit the settlement agreement and a joint letter by November 11, 2022. The letter must explain the basis for the proposed settlement and, if the parties seek dismissal under Federal Rule of Civil Procedure 41, why the settlement is fair and reasonable. It must address the factors identified in the court’s cited precedent, as well as any incentive payment to the plaintiff and any attorney’s fee award to the plaintiff’s counsel. Supporting documentation for the fee request must be provided when appropriate.

The court stated that it 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 stated that it would not approve a release or waiver covering claims that had not accrued or claims unrelated to wage-and-hour matters unless the parties justified that breadth. A non-disparagement provision would also need an exception for truthful statements about the plaintiff’s experience litigating the case, unless the parties provided case-specific reasons for omitting that exception. If the agreement included one of these provisions, the parties were directed to say whether they wanted the court to consider approval with the provision removed. The court noted that it could approve or reject the agreement but could not rewrite it.

Other dispositions

The court adjourned all pending deadlines without setting a new date. At the plaintiff’s election, the case was dismissed without prejudice as to corporate defendants Jannah Inc. and 260 Brook Ave. Inc., and the Clerk of Court was directed to terminate them as parties. The order does not state that the court approved the tentative settlement or decided the underlying wage claims.

Because counsel for the remaining individual defendants had not appeared, the court ordered the plaintiff’s counsel to serve those defendants with a copy of the order within two business days and file proof of service. The parties also could consent to have the assigned Magistrate Judge decide whether to approve the settlement.