Suy v. Noree Thai Bazaar Inc.

Background

The plaintiffs brought claims under the Fair Labor Standards Act (FLSA). On September 18, 2023, the parties notified the court that mediation had produced an agreement resolving all issues.

Court’s directives

The court ordered that the parties could not dismiss the action with prejudice based on the settlement unless the settlement agreement was approved by the court or the Department of Labor. If the parties wanted court approval, they had to file a joint letter motion and the settlement agreement on the public docket by October 19, 2023. The motion had to explain why the proposed settlement was fair and reasonable, including:

- the plaintiff’s possible recovery; - the burdens and expenses the settlement would avoid; - the seriousness of the litigation risks; - whether experienced counsel negotiated at arm’s length; and - the possibility of fraud or collusion.

The filing also had to address whether there was a genuine dispute about the hours worked or compensation owed and how much the plaintiff’s attorney would seek in fees. The court stated that, absent special circumstances, it would not approve an agreement filed under seal or in redacted form.

The court also warned that it was unlikely to approve a general release or a release of claims unrelated to the wage-and-hour claims in the complaint and related state-law claims. If the parties believed an unusually broad release was justified, they had to explain why. The court warned that failure to follow this direction could result in denial of the motion and sanctions against the attorneys.

Dismissal without prejudice

The court noted that the Second Circuit had not decided whether an FLSA case could be settled without court or Department of Labor approval and then dismissed without prejudice under Federal Rule of Civil Procedure 41(a)(1)(A). If the parties chose that route, they had to file a stipulation on the public docket within 30 days. The stipulation had to include an affirmation from the plaintiffs’ counsel stating that the plaintiffs had been clearly advised that the settlement would not prevent them from filing another lawsuit against the same defendants and affirming that the settlement contained no release of the defendants. The court warned that this option could allow the case to be reopened later.

Disposition

The order did not approve the settlement or dismiss the case. It set the procedures and deadlines for seeking approval or filing a dismissal without prejudice. If neither a letter nor a stipulation was filed by October 19, 2023, Judge Valerie Caproni ordered a conference for October 20, 2023.