Cerrato Galan v. Style Management Co., Inc.
- Barbara Moses
- 1:22-cv-01137
- U.S. District Court · Southern District of New York
- 2
In Cerrato Galan v. Style Management Co., Inc., Judge Broderick ordered the parties to submit their FLSA settlement for fairness review.
The plaintiff and defendants in the FLSA case, their counsel, and any persons included in the proposed settlement are affected because the parties must submit the settlement terms and supporting information before the court can review the agreement.
What happened
In Cerrato Galan v. Style Management Co., Inc., the parties told the court they had reached a settlement in a Fair Labor Standards Act case. The court explained that the parties could not privately settle those claims without approval from the court or the Department of Labor.
The court ordered the parties, within 30 days, to provide the settlement terms and a joint letter of no more than five pages explaining why the agreement is a fair and reasonable compromise. The letter must address factors including possible recovery, litigation burdens and risks, negotiations between experienced counsel, and possible fraud or collusion.
The court also ordered the parties to provide factual support for any attorney’s-fee award, including contemporaneous billing records. Judge Vernon S. Broderick did not approve the settlement in this order; he ordered the parties to submit information for the court’s review.
The detailed version
- Cerrato Galan v. Style Management Co., Inc. · No. 1:22-cv-01137
- Barbara Moses
- Oct. 31, 2022
Background
The parties advised the court that they had reached a settlement in this Fair Labor Standards Act (FLSA) case. The court stated that FLSA claims may not be privately settled without approval from the district court or the Department of Labor. The court therefore needed to determine whether the proposed settlement was fair and reasonable.
Required settlement information
The court said it would consider the total circumstances, including:
- the plaintiff’s possible recovery; - the extent to which the settlement would avoid expected burdens and expenses of proving the claims and defenses; - the seriousness of the litigation risks; - whether experienced counsel negotiated the agreement at arm’s length; and - the possibility of fraud or collusion.
The court also stated that any attorney’s-fee provision must be assessed separately. Counsel must provide a factual basis for the requested fees, including contemporaneous billing records identifying, for each attorney, the date, hours worked, and nature of the work.
Order
The court ordered the parties to provide the settlement terms within 30 days of the order. It further ordered them to submit a joint letter of no more than five pages explaining why the settlement fairly and reasonably compromises disputed issues, including information about the five listed factors. If the agreement provides for attorney’s fees, the parties must also submit the required supporting evidence. The order did not approve or reject the settlement. Judge Vernon S. Broderick entered the order.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.