Almanzar v. Silver Star Properties Corp.

Background

The parties informed the court that they had reached a settlement in Rafael Almanzar’s Fair Labor Standards Act (FLSA) case against Silver Star Properties Corp. The court stated that FLSA claims cannot be privately settled without approval from either the district court or the Department of Labor.

Court’s analysis

The court explained that an FLSA settlement must be fair and reasonable. To evaluate the agreement, the court would consider the total circumstances, including:

- the plaintiff’s possible recovery; - the burdens and expenses the settlement would avoid in proving the claims and defenses; - the litigation risks faced by the parties; - whether experienced counsel reached the agreement through arm’s-length bargaining; and - the possibility of fraud or collusion.

If the agreement included attorney’s fees, the court would separately evaluate whether those fees were reasonable. The parties would need to provide factual support for any fee award, including contemporaneous billing records showing, for each attorney, the date, hours worked, and nature of the work.

Order

Judge Vernon S. Broderick ordered the parties to submit the settlement terms within 30 days. He also ordered them to submit a joint letter of no more than five pages explaining why the settlement was a fair and reasonable compromise and addressing the listed factors. If the agreement included attorney’s fees, the parties were ordered to provide the required factual support. The order did not approve the settlement.