Aviles v. CFR Corp.

Background

The plaintiffs brought this action under the Fair Labor Standards Act (FLSA), which includes requirements concerning overtime wages. On May 24, 2023, the court was told by Magistrate Judge Moses, who had been assigned to conduct a settlement conference, that the parties had reached a settlement.

The order explains that when FLSA claims are settled and dismissed under Rule 41 of the Federal Rules of Civil Procedure, the district court must examine the settlement to determine whether it is fair. The court must also review any proposed award of attorney’s fees. The opinion does not disclose the settlement’s terms, amount, or proposed fee award.

Court’s instructions

The parties were given two ways to finalize the settlement, assuming they intended to dismiss the case under Rule 41:

1. By June 8, 2023, they could submit the settlement agreement and a joint letter explaining why the agreement was fair and reasonable. The letter was to address the fairness factors identified in Wolinsky v. Scholastic, Inc. and, if applicable, any incentive payments to the plaintiffs and attorney’s fees, with supporting documentation when appropriate. 2. By the same date, they could consent to proceed before Magistrate Judge Moses for all purposes. In that event, she would decide whether to approve the settlement.

The court noted that judicial approval is not required for an FLSA settlement completed through a Rule 68(a) offer of judgment.

Settlement provisions identified by the court

The court stated that it would not approve a settlement containing any of the following provisions unless the parties provided sufficient, case-specific justification:

- A confidentiality provision, unless the parties showed reasons strong enough to overcome the public’s common-law right of access to judicial documents. - A release or waiver covering claims that had not yet accrued or claims unrelated to wage-and-hour matters. - A provision barring a plaintiff from making negative statements about a defendant without an exception allowing truthful statements about the plaintiff’s experience litigating the case.

If the agreement contained any of those provisions, the parties’ joint letter also had to say whether they wanted the court to consider approving the agreement with the provisions removed. The court explained that it could approve or reject the settlement but could not rewrite the agreement. It also warned that, absent good cause, it would publicly file both the joint letter and the settlement agreement if the parties asked it to consider removing a confidentiality provision.

Disposition

The order did not approve or reject the settlement. It set a deadline and procedures for seeking approval and ordered that the previously scheduled June 13, 2023 conference be adjourned indefinitely.