Rodriguez v. 85 McClellan Street Owners Inc.
- Jesse Furman
- 1:22-cv-01924
- U.S. District Court · Southern District of New York
- 3
In Rodriguez v. 85 McClellan Street Owners, Judge Furman required review materials for a proposed wage settlement and denied pending motions as moot.
The parties to the Fair Labor Standards Act action, including Rodriguez, the defendants, and the third-party defendants, were required to submit settlement materials; the pending dismissal motions were denied as moot.
What happened
In Rodriguez v. 85 McClellan Street Owners Inc., the parties informed the court that they had reached a settlement in principle of the Fair Labor Standards Act case. The court explained that a settlement ending such claims generally requires court review for fairness, including any proposed attorney-fee award.
The court ordered the parties to submit their settlement agreement and a joint explanation by November 28, 2022. It also identified provisions it generally would not approve, including unjustified confidentiality, overly broad releases, and non-disparagement terms without an appropriate exception.
Judge Furman adjourned the scheduled pretrial conference and all pending deadlines indefinitely, and denied as moot the motions to dismiss filed by the defendants and third-party defendants. The order did not approve the settlement or decide the underlying wage claims.
The detailed version
- Rodriguez v. 85 McClellan Street Owners Inc. · No. 1:22-cv-01924
- Jesse Furman
- Oct. 28, 2022
Background
Manuel DeJesus Rodriguez brought this action under the Fair Labor Standards Act, a federal law governing, among other things, overtime pay. The defendants and third-party defendants were also parties to related third-party claims. By letter filed October 27, 2022, the parties advised the court that they had reached a settlement in principle.
The court explained that when Fair Labor Standards Act claims are settled and dismissed under Rule 41 of the Federal Rules of Civil Procedure, the settlement must be reviewed for fairness. That review includes any proposed award of attorney’s fees.
Order
The court ordered the parties to submit the settlement agreement and a joint letter by November 28, 2022. The letter must explain the basis for the proposed settlement and why any requested dismissal should be approved as fair and reasonable, addressing the factors identified in the court’s cited precedent. If applicable, the letter must also address incentive payments to Rodriguez and any attorney’s-fee award to his counsel, with supporting documentation when appropriate.
The court stated that it would not approve a settlement containing a confidentiality provision unless the parties showed case-specific reasons sufficient to overcome the public’s right of access to judicial documents. It likewise would not approve an unjustified release or waiver of claims that had not accrued or claims unrelated to wage-and-hour matters. It also would not approve a clause barring Rodriguez from making negative statements about a defendant unless the clause included an exception for truthful statements about his experience litigating the case, absent case-specific reasons justifying the broader restriction.
The parties could instead consent to proceed before the assigned magistrate judge for all purposes, in which event that judge would decide whether to approve the settlement.
Disposition
The court adjourned indefinitely the January 11, 2023 pretrial conference and all pending deadlines. It denied as moot the motions to dismiss filed by the defendants and third-party defendants, identified as ECF Nos. 40, 46, and 47, and directed the clerk to terminate those entries and the settlement-related filing at ECF No. 52. The court did not approve the settlement in this order and did not decide the underlying wage claims.
Read the full 3-page opinion on CourtListener, the free public archive maintained by the Free Law Project.