Bailes v. Halo Media LLC

Background

The court stated that it had been advised that Jared Bailes and Halo Media, LLC had reached a settlement involving claims under the Fair Labor Standards Act (FLSA). The order did not disclose the settlement amount or other settlement terms, and it did not decide the underlying claims.

Court-approved dismissal with prejudice

The court explained that, under the Second Circuit’s decision in Cheeks v. Freeport Pancake House, FLSA claims cannot be dismissed with prejudice—that is, permanently—through the parties’ automatic dismissal procedure under Federal Rule of Civil Procedure 41(a)(1)(A). Instead, the parties must seek court approval under Rule 41(a)(2).

The court first directed the parties to discuss whether they would consent to having all further proceedings conducted by the assigned magistrate judge. If both consented, they had to file a signed consent form by September 13, 2023. If either party withheld consent, the parties had to file a joint letter by that date stating that they did not consent without identifying the party or parties who withheld consent. The order stated that withholding consent would not have negative consequences.

If the parties did not consent to proceed before the magistrate judge, they had to submit a joint motion by September 20, 2023 explaining why the settlement was fair and should be approved. The motion had to address the factors identified in Wolinsky v. Scholastic Inc. and include the settlement agreement. The court also stated that it would not approve settlement agreements containing confidentiality provisions and would not seal settlement-review materials without a particularized showing overcoming the presumption of public access. If the settlement included attorney’s fees, the motion also had to address their reasonableness and include detailed attorney time records.

Dismissal without prejudice

The court stated that the parties could instead submit a stipulation dismissing the FLSA claims without prejudice, meaning they would not be permanently barred from bringing those claims again. The parties had to certify that there had been no settlement of FLSA claims and had to submit the stipulation and certification by September 13, 2023. If they could not make that certification, the court directed them to seek approval of the settlement through the procedure described above.

Offer of judgment

The court also reminded the parties that they could resolve the case through an offer of judgment under Rule 68(a). It explained that, if the opposing party accepted the offer within the rule’s 14-day period, either party could file the offer and acceptance, after which the clerk would enter judgment. Citing Second Circuit precedent, the court stated that judicial approval was not required for a Rule 68(a) offer of judgment involving FLSA claims. The parties had to submit the executed offer and acceptance, along with a proposed judgment order, by September 13, 2023.

Disposition

The court entered an order directing the parties to proceed through one of the three described procedures. It did not grant or deny a merits motion, approve the settlement, dismiss the case, or enter judgment in this order.