Diaz v. Bloomberg, L.P.

Background

Heidi Diaz, on behalf of herself and others similarly situated, submitted a letter with Bloomberg, L.P.’s consent seeking approval of the parties’ proposed settlement in a Fair Labor Standards Act (FLSA) case. The court explained that FLSA settlements must be reviewed for fairness and reasonableness. That review considers the plaintiff’s possible recovery, the burdens and expenses the settlement avoids, the litigation risks, whether experienced counsel negotiated the agreement at arm’s length, and the possibility of fraud or collusion.

Court’s Analysis

The court also stated that any attorney-fee award must be separately evaluated and supported by evidence. In addition, the court must closely examine release, confidentiality, and non-disparagement provisions in a proposed settlement.

The parties’ submission did not include all information necessary for the court’s review. First, it did not state Diaz’s possible recovery, preventing the court from evaluating whether the damages were fair. Second, it did not provide a factual basis for the agreed attorney fees. The court directed the plaintiff to provide contemporaneous billing records showing, for each attorney, the date, hours worked, and nature of the work. Third, although the settlement included a release provision, the submission did not address whether that release was consistent with releases previously approved in FLSA cases.

Disposition

Before approving or rejecting the proposed settlement agreement, Judge Jessica G. L. Clarke directed the parties to submit the missing information by September 22, 2023. The order did not approve or reject the settlement.