Melchor Ruiz v. Eisen & Son, Inc.
- Rearden
- 1:22-cv-08644
- U.S. District Court · Southern District of New York
- 2
In Melchor Ruiz v. Eisen & Son, Judge Rearden ordered the parties to submit their proposed Fair Labor Standards Act settlement for fairness review.
The plaintiffs, defendants, and plaintiffs’ counsel were required to provide the settlement agreement and supporting explanation; the settlement was not approved by this order.
What happened
In Melchor Ruiz v. Eisen & Son, the parties told the court that they had reached a settlement in principle in a case brought under the Fair Labor Standards Act, a federal law governing matters including overtime pay.
The court explained that proposed settlements of these claims, including any payment of the plaintiffs’ lawyers, must be reviewed for fairness if the parties seek dismissal under the federal settlement-dismissal rule. The court also described provisions it generally would not approve, including broad confidentiality, unrelated claim releases, and certain limits on plaintiffs’ statements about their experiences.
Judge Rearden ordered the parties to submit the settlement agreement and a joint explanation by June 16, 2023. The order did not approve or reject the settlement; it also gave the parties the option to consent to have the assigned magistrate judge decide whether to approve it.
The detailed version
- Melchor Ruiz v. Eisen & Son, Inc. · No. 1:22-cv-08644
- Rearden
- June 1, 2023
Background
The plaintiffs brought this action under the Fair Labor Standards Act (FLSA), 29 U.S.C. § 201 et seq. On May 31, 2023, the parties informed the court that they had reached a settlement in principle. The opinion states that the FLSA requires an employer violating the overtime-pay requirement to pay the unpaid overtime compensation and an equal additional amount as liquidated damages.
Settlement Review
The court explained that when FLSA claims are settled and dismissed under Rule 41 of the Federal Rules of Civil Procedure, the settlement must be reviewed for fairness. That review includes any proposed award of attorneys’ fees. The court cited factors used to evaluate whether an FLSA settlement and any fee award are fair and reasonable.
The court stated that it would not approve a settlement containing a confidentiality provision unless the parties showed case-specific reasons sufficient to overcome the public’s common-law right of access to judicial documents. It also would not approve a release or waiver covering claims that had not accrued or claims unrelated to wage-and-hour matters unless the parties showed case-specific reasons justifying that broader release. Finally, it would not approve a provision barring a plaintiff from making negative statements about a defendant unless the provision allowed truthful statements about the plaintiff’s experience litigating the case, or the parties showed case-specific reasons justifying the provision without that exception.
Order
The court ordered the parties to submit the settlement agreement and a joint letter by June 16, 2023. The letter must explain the basis for the proposed settlement and, if the parties contemplated dismissal under Rule 41, why the settlement should be approved as fair and reasonable. It must also address any incentive payments to the plaintiffs and any attorneys’ fee award to plaintiffs’ counsel, with supporting documentation where appropriate.
The court reminded the parties that they could consent to proceed for all purposes before the assigned magistrate judge, who would then decide whether to approve the settlement. The parties were directed to file a fully executed consent form by June 16, 2023 if all parties agreed. The court did not approve or reject the settlement in this order. It also stated that it could approve or reject an FLSA settlement but could not modify the agreement itself; if prohibited provisions were included, the parties could ask the court to consider approval with those provisions removed, subject to the order’s discussion of public filing and good cause.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.