Flores v. Lechonera Pollo Sabroso Restaurant Corp.

Background

Iris Flores sued Lechonera Pollo Sabroso Restaurant Corp., doing business as Lechonera Pollo Sabroso, and Basilio Bello and Rafael Velasco. She brought claims individually and on behalf of others similarly situated under the Fair Labor Standards Act (FLSA). The court was notified that mediation had produced an agreement on all issues.

Court’s instructions for dismissal with prejudice

The court ordered that the parties could not dismiss the action with prejudice based on the settlement unless the settlement agreement was approved by the court or the Department of Labor. If the parties sought court approval, they had to file a joint letter motion and the settlement agreement on the public docket by April 17, 2023. The letter motion had to explain why the proposed settlement was fair and reasonable, including:

- Flores’s possible recovery; - the burdens and expenses the settlement would avoid in 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 motion also had to address whether a genuine dispute existed about the hours worked or compensation owed and how much Flores’s attorney would seek in fees. The court stated that, absent special circumstances, it would not approve a settlement filed under seal or in redacted form.

The court further warned that it was unlikely to approve a general release or a release of claims unrelated to the wage-and-hour claims in the complaint and related state-law claims. If the parties believed unusual circumstances justified a broader release, they had to explain why. The court stated that failing 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 an FLSA case could be settled without court or Department of Labor approval and dismissed without prejudice under Federal Rule of Civil Procedure 41(a)(1)(A). If the parties chose that route, they had to file a stipulation on the public docket within 30 days. The stipulation had to include an affirmation from plaintiff’s counsel stating that the plaintiff or plaintiffs had been clearly advised that the settlement would not prevent another lawsuit against the same defendants and affirming that the settlement agreement contained no release of the defendants. The court warned that this option carried a risk that the case could later be reopened.

Disposition

The court did not decide the merits of the FLSA claims or approve a settlement. It ordered the parties to follow one of the stated filing procedures. If no letter or stipulation was filed by April 17, 2023, the court ordered a conference for April 21, 2023, at 10:00 a.m. in Courtroom 443 of the Thurgood Marshall U.S. Courthouse.