Jimenez v. GLM Associates, Inc.

Background

The action was brought under the Fair Labor Standards Act, a federal law governing matters including overtime pay. The court was advised by Magistrate Judge Lehrburger, who had been assigned to conduct a settlement conference, that the parties had agreed to terms resolving the action. The opinion explains that an employer violating the overtime-pay requirement may owe the unpaid overtime and an equal amount as liquidated damages.

Because the parties apparently contemplated resolving and dismissing the action under Federal Rule of Civil Procedure 41, the court explained that it would need to review the settlement, including any proposed attorney’s fee award, for fairness and reasonableness. The court did not approve the settlement in this order.

Instructions for Finalizing the Settlement

The court gave the parties two options, both with a February 13, 2023 deadline:

1. They could submit the settlement agreement and a joint letter explaining the basis for the proposed settlement and why it was fair and reasonable, addressing the factors identified in the cited precedent. The letter was also to address any incentive payment to the plaintiff and any attorney’s fee award, with supporting documentation when appropriate. 2. They could consent to proceed before Magistrate Judge Lehrburger for all purposes, in which case he would decide whether to approve the settlement.

The court also 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 likewise would not approve an overly broad release or waiver covering claims that had not accrued or claims unrelated to wage-and-hour matters unless the parties provided case-specific justification. A non-disparagement provision barring negative statements about a defendant would also need a carve-out for truthful statements about the plaintiff’s experience litigating the case, unless the parties justified omitting that carve-out.

If the agreement contained any of those provisions, the parties were directed to say whether they wanted the court to consider approving the agreement with the provisions removed. The court noted that it could approve or reject the settlement but could not modify the agreement itself. The opinion also noted that judicial approval is not required for an Fair Labor Standards Act settlement made through a Rule 68(a) offer of judgment.

Disposition

The order provided procedures for submitting or obtaining review of the proposed settlement and ordered that the settlement conference scheduled for May 30, 2023, be adjourned indefinitely. It did not rule on the merits of the wage-and-hour claims and did not state that the settlement was approved or that the action was dismissed.