Duran v. Amsterdam 1883-1887 LLC
- Rearden
- 1:22-cv-07425
- U.S. District Court · Southern District of New York
- 2
In Duran v. Amsterdam, Judge Rearden required the parties to submit their wage-and-overtime settlement for fairness review but did not approve it.
Biondys Duran, Amsterdam 1883-1887 LLC, and Staffpro, Inc.; the order also set requirements for any proposed FLSA settlement and attorney’s fee request in this case.
What happened
In Duran v. Amsterdam 1883-1887 LLC, plaintiff Biondys Duran and defendants Amsterdam 1883-1887 LLC and Staffpro, Inc. told the court they had reached a settlement of claims under the Fair Labor Standards Act, the federal law governing minimum wages and overtime pay.
The court explained that a settlement of these wage claims generally must be reviewed for fairness, including any proposed payment of the plaintiff’s lawyer. It ordered the parties to submit the settlement agreement and a joint letter explaining why the proposed settlement was fair and reasonable by July 21, 2023. The court did not approve or reject the settlement in this order.
Judge Jennifer H. Rearden also identified provisions the court would not approve without specific justification, including confidentiality terms, overly broad releases, and non-disparagement terms without an exception for truthful statements about the plaintiff’s case. All pending deadlines were adjourned without a new date.
The detailed version
- Duran v. Amsterdam 1883-1887 LLC · No. 1:22-cv-07425
- Rearden
- July 5, 2023
Background
The action was brought under the Fair Labor Standards Act (FLSA), 29 U.S.C. § 201 et seq. On June 30, 2023, the parties informed the court that they had reached a settlement. The opinion does not state the settlement amount or other settlement terms.
Court’s analysis
The court explained that, when parties settle FLSA claims and seek dismissal under Rule 41 of the Federal Rules of Civil Procedure, the settlement must be reviewed to ensure that it is fair. The review includes any proposed award of attorney’s fees. The court cited factors concerning the fairness and reasonableness of FLSA settlements and fee awards.
The court also stated that judicial approval is not required for an FLSA settlement made through a Rule 68(a) offer of judgment. The opinion does not state that the parties used that procedure.
Order
The court ordered the parties, by July 21, 2023, to submit the settlement agreement and a joint letter explaining the basis for the proposed settlement and, if they contemplated dismissal under Rule 41, why the settlement should be approved as fair and reasonable. The letter also had to address any incentive payment to Biondys Duran and any proposed attorney’s fee award, including supporting documentation when appropriate.
The court advised that it would not approve a settlement containing a confidentiality provision unless the parties showed case-specific reasons sufficient to overcome the public-access right that can apply to judicial documents. It also would not approve a release or waiver covering claims that had not accrued or claims unrelated to wage-and-hour matters without case-specific justification. Finally, it would not approve a clause barring negative statements about a defendant unless the clause preserved truthful statements about the plaintiff’s experience litigating the case, absent case-specific justification.
If the agreement contained any of those provisions, the parties were required to state whether they wanted the court to consider approving the agreement with the provisions removed. The court noted that it could approve or reject the settlement but could not rewrite the agreement itself. The parties could also consent to have the assigned magistrate judge decide whether to approve the settlement. All pending deadlines were adjourned without a new date.
Disposition
The court did not approve or reject the settlement in this order. It ordered the parties to submit the settlement agreement and supporting joint letter for review.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.