Diaz v. Dollar N Discount LLC

Background

Louis Lopez Diaz brought this action against Dollar N Discount LLC doing business as Real Deal Dollar & Discount and Hassan Siddique under the Fair Labor Standards Act (FLSA), a federal law governing matters including overtime pay. On June 5, 2023, the parties informed the court that they had reached a settlement in principle.

The court explained that an employer violating the FLSA’s overtime-pay requirement may owe unpaid overtime compensation and an equal amount as additional damages. It also explained that when parties settle FLSA claims and seek dismissal under Rule 41 of the Federal Rules of Civil Procedure, the court must review the settlement, including any proposed attorney’s fee award, for fairness.

Order

The court ordered the parties to submit the settlement agreement and a joint letter by July 6, 2023. The letter must explain the basis for the proposed settlement and why it should be approved as fair and reasonable, referring to the factors identified in Wolinsky v. Scholastic, Inc. It must also address any incentive payment to Diaz and any attorney’s fee award to his counsel, with supporting documentation when appropriate.

The court reminded the parties that they could consent to proceed before the assigned Magistrate Judge, who would then decide whether to approve the settlement. If all parties consented, they were directed to file a fully executed consent form by June 28, 2023. The court also noted that judicial approval is not required for an FLSA settlement made through a Rule 68(a) offer of judgment.

The court stated that it would not approve a settlement containing a confidentiality provision unless the parties showed case-specific reasons overcoming the public’s common-law right of access to judicial documents. It likewise would not approve a release of unaccrued or unrelated claims without case-specific justification, or a clause barring negative statements about a defendant without an exception for truthful statements about the plaintiff’s experience litigating the case, absent such justification. If the agreement contained any of these provisions, the parties were instructed to say whether they wanted the court to consider approval after striking the provisions. The court noted that it could approve or reject the agreement but could not rewrite it.

Disposition

Judge Jennifer H. Rearden did not approve the proposed settlement because the agreement had not yet been submitted for review. The court adjourned all pending deadlines, terminated the pending motion at ECF No. 11, and directed the Clerk of Court to serve the order on pro se defendant Hassan Siddique.