Arias v. Gilzeis Realty Company, LLC

Background

The court stated that it had been advised that the parties reached a settlement in a case involving claims under the Fair Labor Standards Act (FLSA), a federal law governing minimum wages, overtime, and related employment protections. The order addressed how the parties could resolve the FLSA claims; it did not decide the underlying claims.

Options for resolving the FLSA claims

The court described three alternatives:

1. Dismissal with prejudice after court approval. A dismissal with prejudice permanently ends the dismissed claims. Relying on the Second Circuit's decision in Cheeks v. Freeport Pancake House, Inc., the court explained that the parties could not dismiss FLSA claims with prejudice without court approval under Federal Rule of Civil Procedure 41(a)(2). The parties first had to discuss whether they would consent to having all further proceedings, including review of the proposed settlement, conducted by the assigned magistrate judge. If they did not both consent, they had to submit a joint motion explaining why the settlement was fair and attaching the settlement agreement. The motion had to address the factors identified in Wolinsky v. Scholastic Inc.

The court stated that it would not approve settlement agreements containing confidentiality provisions. It also stated that settlement-related documents could not be filed under seal unless the parties made a specific showing that overcame the presumption of public access to court records. If the settlement included attorney fees, the parties had to address whether the fees were reasonable and provide detailed attorney time records.

2. Dismissal without prejudice without a settlement of the FLSA claims. A dismissal without prejudice does not bar refiling the claims. The court stated that it would accept a stipulation dismissing the FLSA claims without prejudice if the parties certified that there had been no settlement of those claims. If they could not make that certification, the parties had to seek court review of the settlement under the first option.

3. Offer of judgment. The parties could instead use an offer and acceptance of judgment under Federal Rule of Civil Procedure 68. The court explained that, under the Second Circuit's decision in Met Xing Yu v. Hasaki Restaurant, Inc., court approval was not required for a Rule 68 offer of judgment involving FLSA claims. The parties choosing this option had to submit the executed offer and acceptance and a proposed order entering judgment.

Order and classification

The court ordered the parties to submit the documents required for their chosen option within two weeks of the order. The text does not state that the court approved the settlement, dismissed the claims, or entered judgment. Judge Gregory H. Woods therefore issued a procedural order governing the next steps for resolving the parties' reported settlement rather than a ruling on the merits of the FLSA claims.