Andreyuk v. ASF Construction & Excavation Corp.
- Andrew Krause
- 7:19-cv-07476-AEK
- U.S. District Court · Southern District of New York
- 3
In Andreyuk v. ASF Construction & Excavation Corp., Judge Krause required materials for court review of the parties’ settled Fair Labor Standards Act claims.
The plaintiffs, defendants, and their counsel were required to provide materials for judicial review of the reported settlement and any attorneys’ fees and costs.
What happened
In Andreyuk v. ASF Construction & Excavation Corp., the parties told the court that they had settled their dispute, including claims under the Fair Labor Standards Act, a federal wage-and-hour law.
The court explained that these claims cannot be privately settled and dismissed with prejudice without approval from the court or the U.S. Department of Labor. It ordered the parties to submit a joint request explaining why the settlement is fair, the signed settlement agreement, and documents supporting any requested lawyers’ fees and costs by May 5, 2023.
Judge Andrew E. Krause also cautioned that settlement terms involving confidentiality, restrictions on truthful statements, or bans on future employment may create problems, and that releases and fee requests must satisfy the court’s fairness review. The order did not approve or reject the settlement.
The detailed version
- Andreyuk v. ASF Construction & Excavation Corp. · No. 7:19-cv-07476-AEK
- Andrew Krause
- Apr. 12, 2023
Background
The parties reported that they had settled their dispute, including claims under the Fair Labor Standards Act (FLSA). The order does not state the settlement amount or describe the underlying allegations.
Court’s directions
The court explained that, in the Second Circuit, parties cannot privately settle FLSA claims through a stipulated dismissal with prejudice under Federal Rule of Civil Procedure 41 unless the district court or the U.S. Department of Labor approves the settlement.
The court ordered the parties to submit, by May 5, 2023:
- A joint letter requesting judicial approval and explaining why the settlement is fair and reasonable under the totality of the circumstances, including the nine factors identified in the court’s cited authority.
- A written settlement agreement signed by all parties.
- Any contingency-fee agreement and time and expense records needed to support an award of attorneys’ fees and costs.
Settlement terms and fees
The court cautioned that confidentiality provisions are rarely appropriate in wage-and-hour settlements because of the policies underlying the FLSA. It also noted that a non-disparagement provision may be improper if it prevents plaintiffs from making truthful statements about their experience litigating the case.
The court further cautioned that courts in the Second Circuit have consistently rejected FLSA settlements that prevent plaintiffs from having a future employment relationship with the defendant. It noted that courts frequently approve releases limited to wage-and-hour claims asserted or that could have been asserted in the action. Under appropriate circumstances, courts may also approve broad mutual releases negotiated by competent counsel when former employees have no ongoing relationship with the employer.
The court stated that its fairness review includes attorneys’ fees and costs. Any proposed fee award had to be included in the written settlement agreement, signed by the parties, and supported by properly authenticated fee and expense records. The information had to be sufficient to support a lodestar calculation, meaning a reasonableness calculation based on the time spent and reasonable hourly rates. Claimed costs had to be supported by invoices, receipts, or a sworn statement about the expenses incurred.
Disposition
The order directed the parties to submit materials for review; it did not approve or reject the settlement. The opinion does not state a separate disposition of the underlying claims.
Read the full 3-page opinion on CourtListener, the free public archive maintained by the Free Law Project.