Kaloshi v. West Village Oasis, Inc.

Background

This Fair Labor Standards Act (FLSA) and state-law wage-and-hour case was brought by Adriana Kaloshi and two other plaintiffs against West Village Oasis, Inc. and three individual defendants. Alfonso Tenezaca, one of the plaintiffs, alleged that he worked as a food service runner from August 2020 through February 2022, was not paid for all regular and overtime hours, and did not receive all of his tips. He also alleged that the defendants retaliated against him by terminating his employment after he complained about his wages.

Tenezaca moved under Federal Rule of Civil Procedure 41(a)(2) to dismiss his own claims voluntarily and without prejudice. He stated that he no longer wanted to deal with the lawsuit, had returned to work part-time for the defendants, and had not been offered or given anything in exchange for dismissing his claims. The defendants joined his request.

Court’s analysis

The court explained that FLSA settlements generally require approval by the court or the Department of Labor, whether the dismissal is with or without prejudice. That review is intended to ensure that a settlement is fair and reasonable to the employee. But when the record confirms that no settlement exists, the special settlement-review requirement does not apply to a voluntary dismissal.

The court found nothing in the current record showing that the parties had secretly settled Tenezaca’s FLSA claims. Tenezaca stated under oath that he made the decision himself and that there was no exchange of money or other benefit for dropping the case. The defendants also represented that Tenezaca had repeatedly contacted them about abandoning the lawsuit before returning to work. Although Tenezaca’s lawyer expressed concern about possible coercion, the lawyer also agreed that dismissal would not raise the settlement-review concerns if Tenezaca had received no consideration and remained free to bring the claims again.

The court nevertheless concluded that it could not grant the motion on the present record. An earlier order required Tenezaca’s lawyer to explain the statement that Tenezaca would be left to pay his own legal bill, and required the defendants to submit a statement from someone with personal knowledge addressing whether any defendant offered or provided Tenezaca a payment or other benefit and whether he signed a release. The court found that, at most, only Tenezaca’s required declaration had been provided.

Order

The court ordered Tenezaca’s lawyer to file the required affidavit or declaration by June 20, 2023. The filing must explain whether the lawyer plans to charge Tenezaca fees, expenses, or both; the amount and basis of any charge; and whether Tenezaca was told about it. The defendants also had to file, by June 20, an affidavit or declaration signed by an individual defendant or another person with personal knowledge addressing any payment or other benefit offered or provided in exchange for dismissal and whether Tenezaca signed a release.

The order stated that no additional argument would be accepted and directed the clerk to leave the motion open for future determination. The opinion therefore did not grant or deny Tenezaca’s voluntary-dismissal motion.