Linares v. Cosan Construction Corp.

Background The parties advised the court that they anticipated submitting a finalized settlement agreement for court approval by January 24, 2023. The order concerns a proposed settlement under the Fair Labor Standards Act (FLSA). It states that the parties cannot privately settle FLSA claims without approval from the district court or the Department of Labor.

Settlement-review standard The court stated that it must determine whether the settlement is fair and reasonable. It identified five factors for review: (1) the plaintiff’s possible recovery; (2) the burdens and expenses the settlement would help the parties avoid in proving their claims and defenses; (3) the seriousness of the litigation risks; (4) whether experienced counsel reached the agreement through fair, arm’s-length negotiations; and (5) the possibility of fraud or collusion.

If the settlement includes attorney’s fees, the court must separately assess whether those fees are reasonable. The parties must provide a factual basis for any fee award, including billing records showing each attorney’s date of work, hours spent, and the nature of the work performed.

Order The court ordered the parties to provide the settlement terms by January 24, 2023. It also ordered them to submit a joint letter of no more than five pages explaining why the settlement is a fair and reasonable compromise of disputed issues, including information about the five listed factors. If the agreement includes attorney’s fees, the parties must submit supporting evidence for those fees. The order did not approve or reject the proposed settlement.