Chen v. Nara Sushi 76 Inc.

Background

De Fa Chen brought claims against Nara Sushi 76 Inc., doing business under several listed names, Guimin Lin, Kathy Zeng, and Bo Huang. The claims included allegedly unpaid wages and overtime under the Fair Labor Standards Act (FLSA), as well as unpaid or improperly withheld wages and wage-notice and wage-statement violations under New York law.

The parties reached a settlement and first sought court approval. On October 7, 2022, the court denied that request without prejudice and ordered the parties to submit a revised settlement letter and agreement. The revised agreement and renewed request for approval were before the court in this order.

Court’s Analysis

The court explained that an FLSA wage settlement requires approval by the Department of Labor or a district court. For court approval, the parties must show that the settlement is fair and reasonable. The court considers factors including the plaintiff’s possible recovery, the burdens and expenses avoided through settlement, litigation risks, whether experienced counsel negotiated at arm’s length, and the possibility of fraud or collusion.

The parties stated that there was no fraud or collusion. The court concluded that the revised settlement satisfied the relevant fairness factors. The court also addressed the release provision that had caused the earlier agreement to be rejected. The revised provision applied to the defendants rather than entities beyond the defendants and was mutual, meaning both sides released certain claims connected with the employment and the action. The court determined that this revised release was fair and reasonable. The court had previously found the requested attorney’s fees and costs reasonable.

Ruling and Effect

The court granted the parties’ request for approval of the revised settlement. It directed the Clerk of Court to terminate all pending motions and close the case.