Lopez v. JGR Services Inc.
- Andrew Krause
- 7:22-cv-09155
- U.S. District Court · Southern District of New York
- 3
Lopez v. JGR Services, Judge Krause ordered FLSA settlement materials or a Rule 68 filing, without approving the settlement.
Cristian Lopez, the other plaintiffs, JGR Services Inc., the other defendants, and their counsel were affected by the filing requirements and settlement-review cautions.
What happened
In Lopez v. JGR Services Inc., the parties told the court that they had settled their dispute, including claims under the Fair Labor Standards Act, a federal wage-and-hour law.
Because courts in the Second Circuit generally must review and approve private settlements of Fair Labor Standards Act claims, the court ordered the parties to submit a joint approval request, the signed settlement agreement, and supporting information about attorneys’ fees and costs. The parties could instead file a Rule 68 offer of judgment and acceptance by June 30, 2023.
Judge Andrew E. Krause did not approve the settlement in this order. He gave the parties filing instructions and cautioned them about confidentiality, non-disparagement, employment restrictions, release language, attorneys’ fees, and litigation costs.
The detailed version
- Lopez v. JGR Services Inc. · No. 7:22-cv-09155
- Andrew Krause
- June 7, 2023
Background
The parties reported that they had settled the dispute, including claims under the Fair Labor Standards Act (FLSA). The parties had consented to the magistrate judge’s jurisdiction for all proceedings. The order does not describe the underlying wage-and-hour claims or the settlement’s terms.
Settlement-Approval Requirements
The court explained that, in the Second Circuit, parties generally cannot privately settle FLSA claims through a stipulated dismissal with prejudice under Federal Rule of Civil Procedure 41 unless the district court or the United States Department of Labor approves the settlement.
The court ordered the parties to submit, through the court’s electronic filing system, no later than June 30, 2023:
- A joint letter motion asking the court to approve the settlement and explaining why it is fair and reasonable under all the circumstances, including the nine factors identified in Wolinsky v. Scholastic Inc.;
- A written settlement agreement signed by all parties; and
- Counsel’s contingency-fee agreement, if applicable, and time and expense records supporting any request for attorneys’ fees and costs.
The court cautioned that confidentiality provisions would rarely be appropriate in an FLSA wage-and-hour lawsuit. It also noted that a non-disparagement clause could be improper if it prevented the plaintiff from making truthful statements about the litigation. The court further warned that courts in the circuit have rejected settlements that prevent plaintiffs from having a future employment relationship with the defendant. It stated that courts commonly approve releases limited to wage-and-hour claims and related claims that could have been asserted, while general releases may be approved in appropriate circumstances when they are mutual, negotiated by competent counsel, and concern former employees with no ongoing relationship with the employer.
Fees and Costs
The court stated that its fairness review extends to attorneys’ fees and costs. Any proposed award had to be included in the written settlement agreement, signed by the parties, and supported by the relevant fee agreement and authenticated time and expense records. The information had to support a lodestar calculation, which estimates a reasonable fee by multiplying reasonable hours by reasonable hourly rates. Plaintiffs’ counsel also had to substantiate costs with invoices, receipts, or a sworn statement.
Alternative Rule 68 Procedure and Disposition
At a June 6, 2023 conference, counsel had indicated that the parties were considering resolving the matter through a Rule 68 offer of judgment and acceptance instead of filing a settlement-approval motion. The court stated that, if the parties chose that procedure, they had to file the offer and acceptance by June 30, 2023.
The order therefore set submission requirements and did not approve the reported settlement or decide the underlying FLSA claims.
Read the full 3-page opinion on CourtListener, the free public archive maintained by the Free Law Project.