Zeng v. USA QR Culture Industrial Development LLC

Background

Yang Zeng brought this action individually and on behalf of other similarly situated employees under the Fair Labor Standards Act (FLSA) and New York Labor Law. The parties advised the court that they had reached a settlement in principle. Because the parties contemplated dismissal under Federal Rule of Civil Procedure 41, the court explained that judicial approval of the FLSA settlement was required.

Court’s Order

The court ordered the parties to submit the settlement agreement and a joint letter by September 15, 2023. The letter must explain the basis for the proposed settlement and why it should be approved as fair and reasonable, with reference to the factors discussed in Wolinsky. It must also address any incentive payment to the plaintiff and any attorney’s-fee award to plaintiff’s counsel, 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 common-law right of public access to judicial documents. It also would not approve an unjustifiably broad release or waiver covering claims that had not accrued or claims unrelated to wage-and-hour matters. In addition, a non-disparagement clause barring negative statements about a defendant generally would need an exception for truthful statements about the plaintiff’s experience litigating the case, unless the parties showed case-specific reasons for omitting that exception.

If the agreement included any of those provisions, the parties were required to say whether they wanted the court to consider approving the agreement with the provisions removed. The court noted that it could approve or reject an FLSA settlement but could not modify the agreement itself. The parties could also consent to proceed before the assigned magistrate judge for all purposes, including settlement approval. The court adjourned the September 26, 2023 pretrial conference and all pending deadlines without setting new dates.

Disposition

The court did not approve or reject the settlement in this order. It ordered the parties to provide the agreement and supporting explanation by September 15, 2023, and adjourned the conference and pending deadlines. Judge Arun Subramanian signed the order.