Guacan v. Hawkeye Security NY LLC

Background

Ivan Guacan brought this proposed collective action under the Fair Labor Standards Act, a federal wage law, against Hawkeye Security NY LLC and the other defendants. The court was advised on April 10, 2023, that the parties had reached agreement on all issues.

The court explained that an employer violating the overtime-pay requirement must pay the unpaid overtime and an equal amount as additional damages. When the parties settle and seek dismissal under Rule 41 of the Federal Rules of Civil Procedure, the court must review the settlement, including any proposed attorney’s fee award, to determine whether it is fair.

Options for Finalizing the Settlement

The court stated that, if the parties planned to dismiss the case under Rule 41, they had two options by April 26, 2023:

1. Submit the settlement agreement with a joint letter explaining the basis for the settlement and why it was fair and reasonable. The letter also had to address any incentive payment to Guacan and any attorney’s fee award, with supporting documentation when appropriate. 2. Consent to proceed before Magistrate Judge Aaron for all purposes. In that event, Magistrate Judge Aaron would decide whether to approve the settlement.

The order did not itself approve or reject the settlement.

Settlement Terms the Court Identified

The court stated that it would not approve an agreement containing any of these provisions unless the parties showed case-specific reasons supporting them:

- A confidentiality provision, unless justified by reasons sufficient to overcome the public’s common-law right of access to judicial documents. - A release or waiver covering claims that had not accrued or claims unrelated to wage-and-hour matters. - A provision barring Guacan from making negative statements about a defendant unless it preserved the right to make truthful statements about his experience litigating the case, or unless the parties justified the broader restriction with case-specific reasons.

If the agreement contained one of these provisions, the parties were directed to say whether they wanted the court to consider approving the agreement with the provision removed. The court noted that it could approve or reject the agreement but could not rewrite it.

Disposition

Judge Jesse M. Furman ordered that the conference previously scheduled for April 18, 2023, be adjourned without a new date being set. The order established procedures for seeking settlement approval but did not decide the underlying wage claims or approve the proposed settlement.