Molling v. Liebenrau LLC

Background

Nicole Molling sued Liebenbrau LLC and other defendants. The parties reported that they had settled the dispute, including claims under the Fair Labor Standards Act (FLSA), the federal law governing certain wage and hour rights. They also consented to Judge Andrew E. Krause's authority to handle all remaining proceedings under 28 U.S.C. § 636(c).

Settlement-procedure requirements

The court explained that, in the Second Circuit, parties privately settling FLSA claims must either file an offer of judgment under Federal Rule of Civil Procedure 68 and a notice accepting it, or ask the court to approve the settlement. The court ordered the parties to file a joint motion by October 13, 2023, identifying which option they would pursue and attaching the required documents.

If the parties sought judicial approval, the court required a joint letter explaining why the settlement was fair and reasonable under all the circumstances, including discussion of the nine factors identified in the cited precedent. They also had to submit the written settlement agreement signed by all parties and, if needed to support attorney fees and costs, counsel's contingency-fee agreement and time and expense records.

Terms and fees the court addressed

The court cautioned that confidentiality provisions are rarely appropriate in FLSA wage-and-hour settlements. It also cautioned against non-disparagement provisions that would prevent Molling from making truthful statements about her experience litigating the case. The court noted that settlements generally should not prevent a plaintiff from having a future employment relationship with the defendant.

The court further noted that release language is often limited to wage-and-hour claims asserted in the action and related claims that could have been asserted. It recognized that a mutual general release may be approved in appropriate circumstances, including when both sides are represented by competent counsel and the former employees have no ongoing relationship with the employer.

The court stated that its fairness review would include the reasonableness of attorney fees and costs. Any proposed fee and cost award had to appear in the signed settlement agreement and be supported by the relevant agreements, authenticated time and expense records, information about counsel's experience and hourly rates, and documentation such as invoices, receipts, or a sworn statement. The court referenced the lodestar method, which estimates reasonable fees by multiplying reasonable hours by reasonable hourly rates, as a check on the requested fees.

Ruling

Judge Andrew E. Krause ordered the parties to submit the joint motion and supporting materials by October 13, 2023. The order did not approve or reject the settlement and did not decide the underlying FLSA claims.