Wallace v. International House of Pancakes, LLC
- Sarah Netburn
- 1:21-cv-06993
- U.S. District Court · Southern District of New York
- 2
Wallace v. International House of Pancakes, Judge Vyskocil reopened the case and ordered information needed to review the parties’ proposed Fair Labor Standards Act settlement.
Niquan Wallace and the named defendants, who must jointly provide information for the Court’s review of their proposed settlement.
What happened
In Wallace v. International House of Pancakes, LLC, the parties reported reaching a settlement in principle. The Court had previously discontinued the case for 30 days without costs and without prejudice.
Because the complaint includes claims under the Fair Labor Standards Act, the Court explained that judicial approval of the settlement is required. The parties must jointly explain why the settlement is a fair and reasonable compromise rather than an employer’s waiver of statutory rights.
Judge Vyskocil ordered the parties to submit that explanation by April 27, 2023. The Court also ordered the Clerk to reopen the case and terminate the pending motion at ECF No. 68; it did not approve the settlement in this order.
The detailed version
- Wallace v. International House of Pancakes, LLC · No. 1:21-cv-06993
- Sarah Netburn
- Apr. 18, 2023
Background
Plaintiff Niquan Wallace sued International House of Pancakes LLC, Trihop Management LLC, Trihop 177th Street LLC, Trihop 14th Street LLC, Trihop 69th Street LLC, John Doe LLC, Ben Ashkenazy, Edward Scannapieco, and Kwesi Thomas. The complaint asserted claims under the Fair Labor Standards Act, a federal law governing matters including minimum wages and overtime pay.
On March 17, 2023, the parties informed the Court that they had reached a settlement in principle. On March 20, 2023, the Court entered a 30-day order discontinuing the case without costs to any party and without prejudice.
Settlement-review requirement
The Court explained that settlements of Fair Labor Standards Act claims require approval by either the district court or the United States Department of Labor. The Court therefore stated that it must examine the proposed settlement for fairness. This order did not approve the settlement.
The Court ordered the parties to submit a joint letter by April 27, 2023, explaining why the proposed settlement represents a fair and reasonable compromise of disputed issues rather than a waiver of statutory rights caused by employer overreaching. The parties must address:
- Wallace’s possible range of recovery; - the extent to which the settlement would help the parties avoid the burdens and expenses of proving their claims and defenses; - the seriousness of the litigation risks faced by the parties; - whether experienced counsel reached the settlement through arm’s-length bargaining; and - the possibility of fraud or collusion.
The letter must also address whether a genuine dispute exists about the number of hours worked or the amount of compensation due, and how much Wallace’s attorney will seek in fees. The Court further stated that, absent special circumstances, it would not approve a settlement filed under seal or in redacted form.
Disposition
The Court ordered the Clerk of Court to reopen the action and terminate the motion pending at ECF No. 68. The opinion does not state that the Court approved or rejected the proposed settlement.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.