Nyamoti v. The Mount Sinai Hospital

Background

The court was notified on February 13, 2023, that mediation had resulted in an agreement on all issues. The claims arose under the Fair Labor Standards Act, a federal wage-and-hour law.

Court’s order

The court ordered that the parties could not dismiss the action with prejudice—that is, in a way that would bar the claims from being brought again—unless either the court or the Department of Labor approved the settlement. If the parties wanted that type of dismissal, they had to file a joint letter motion asking the court to approve the agreement, or provide documentation showing Department of Labor approval. The letter motion and settlement agreement had to be filed on the public docket by March 14, 2023.

The court stated that the approval request had to explain why the proposed settlement was fair and reasonable. At a minimum, it had to address the plaintiff’s possible recovery; the burdens and expenses the settlement would avoid; the litigation risks; whether experienced counsel negotiated the agreement at arm’s length; and the possibility of fraud or collusion. It also had to address whether there was a genuine dispute about the number of hours worked or the compensation owed, and the amount of attorney’s fees the plaintiff’s lawyer would seek. The court stated that it generally would not approve a settlement filed under seal or in redacted form absent special circumstances.

The court warned that it was unlikely to approve a general release, or a release of claims not raised in the complaint and unrelated to wage-and-hour claims under the Fair Labor Standards Act or related state laws. If the parties believed unusual circumstances justified a broader release, the approval motion had to explain why. The court stated that failure to comply could lead to denial of the motion and sanctions against the attorneys.

Alternative dismissal without prejudice

The court noted that the Second Circuit had not decided whether the parties could settle a Fair Labor Standards Act case without court or Department of Labor approval and dismiss it without prejudice under Federal Rule of Civil Procedure 41(a)(1)(A). If the parties chose that route, the court ordered them to file a stipulation within 30 days. The stipulation had to include an affirmation from the plaintiff’s counsel stating that the plaintiff had been clearly advised that the settlement would not prevent another lawsuit against the same defendant and affirming that the settlement agreement contained no release of the defendant. The court warned that this option could allow the case to be reopened in the future.

Disposition

The opinion did not approve the settlement or dismiss the case. It set filing requirements for either court or Department of Labor approval of a dismissal with prejudice, or a stipulation for dismissal without prejudice. If no letter or stipulation was filed by March 14, 2023, the court ordered a conference on March 17, 2023, at 10:00 a.m.