Rodriguez v. Taco Mix LLC

Background

Maximinio Rodriguez sued Taco Mix LLC, Taco Mix II LLC, Taco Mix III LLC, Taco Mix Brooklyn LLC, Taco Mix Staten Island LLC, Jorge Sanchez, Alejo Sanchez, and Joanna Sanchez under the Fair Labor Standards Act (FLSA) and the New York Labor Law. He alleged that the defendants failed to pay the lawful minimum wage, overtime compensation, and spread-of-hours compensation, and failed to provide proper wage notices and wage statements.

The court initially denied approval of the parties’ settlement request without prejudice on April 26, 2022, and directed the parties to revise certain provisions, abandon the settlement, or agree to dismiss the case without prejudice. The court later approved a revised agreement and closed the case on May 17, 2022. After that approval, the parties reached another agreement under which Rodriguez agreed to extend the defendants’ time to begin installment payments in exchange for an additional $4,800 payment, bringing the total settlement amount to $52,800. Rodriguez later reported that the defendants had not made the first payment within the required period. The case was reopened, and the parties reported that they intended to revise the settlement terms. They eventually submitted the updated agreement before the court in this order.

Reasons for Denial

The court denied the updated settlement agreement because it contained three provisions the court had previously rejected.

First, the release required Rodriguez to give up all possible claims, including unknown claims and claims unrelated to wage-and-hour issues. It also covered a broad list of entities and individuals connected with the defendants. The court again declined to approve that release for the reasons stated in its earlier order.

Second, the agreement stated that Rodriguez would never seek employment with the company or the other covered parties. The court described this no-rehire provision as highly restrictive and in tension with the remedial purposes of the FLSA.

Third, the agreement prohibited Rodriguez from making disparaging statements about the company, the defendants, and a broad group of related people and entities. The court concluded that the provision could bar truthful statements about Rodriguez’s wage-and-hour claims and that the agreement did not contain an exception allowing such statements. The court explained that a non-disparagement clause in an FLSA settlement must include a carve-out for truthful statements about the plaintiff’s experience litigating the case.

Disposition

Judge Edgardo Ramos denied the request for settlement approval without prejudice. The parties were instructed to submit a revised agreement by July 10, 2023, removing or tailoring the release, no-rehire, and non-disparagement provisions as described in the order.