Mendoza v. DL Y LLCt

Background

The opinion states that the parties had reached a settlement in this Fair Labor Standards Act (FLSA) case. It does not describe the settlement’s terms or decide the underlying wage claims.

Settlement-approval requirements

The court stated that the action could not be dismissed with prejudice based on the settlement unless the settlement agreement was approved by the court or by the Department of Labor. If the parties wanted dismissal with prejudice, they had to either file a joint letter motion asking the court to approve the agreement or provide documentation of Department of Labor approval. The deadline for filing the letter motion and settlement agreement on the public docket was July 17, 2023.

The letter motion had to explain why the proposed settlement was fair and reasonable. It also had to address the plaintiff’s possible recovery, the burdens and expenses the settlement would avoid, the litigation risks, whether experienced counsel negotiated the agreement at arm’s length, and the possibility of fraud or collusion. In addition, the parties had to discuss whether a genuine dispute existed about the number of hours worked or the compensation owed, and how much the plaintiff’s attorney would seek in fees.

Attorney fees and settlement terms

Any request for attorney fees had to include supporting documentation, including contemporaneous billing records showing each attorney’s dates, hours, and work performed. The court stated that, absent special circumstances, it would not approve a settlement filed under seal or in redacted form. It also stated that, absent compelling circumstances, it would not approve agreements containing sweeping nondisclosure provisions or broad releases of claims unrelated to FLSA issues.

Magistrate-judge consent and disposition

The parties could voluntarily consent to proceed before Magistrate Judge Jennifer Willis, who would then oversee settlement approval. The court stated that the parties could withhold consent without negative consequences. If the consent form were approved, further proceedings would occur before Judge Willis rather than Judge Torres. Any appeal would go directly to the United States Court of Appeals for the Second Circuit.

The clerk was directed to terminate any pending motions and vacate any conferences. The order did not approve the settlement and did not dismiss the action with prejudice.