Torres Tapia v. Pil Pil Spanish Tapas Inc.

Background

The court was notified that, through mediation, the parties had reached an agreement on all issues. The case involves claims under the Fair Labor Standards Act (FLSA), which establishes federal wage-and-hour requirements.

Court’s Instructions

The court ordered that the parties may not dismiss the action with prejudice based on the settlement unless either the court or the Department of Labor approves the settlement agreement. If the parties wanted court approval, they had to file a joint letter motion and the settlement agreement on the public docket by November 12, 2023. The letter motion had to explain why the settlement was fair and reasonable, including the plaintiff’s possible recovery, the burdens and costs avoided through settlement, 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 number of hours worked or the amount of compensation owed and how much the plaintiff’s attorney would seek in fees. The court stated that it generally would not approve a settlement filed under seal or in redacted form absent special circumstances.

The court further 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. If the parties believed unusual circumstances justified a broader release, they had to explain why. The court warned that failing to follow these instructions could lead to denial of the approval motion and possibly sanctions against the attorneys.

Alternative Dismissal Procedure

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 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 told they could file another lawsuit against the same defendants and confirming that the settlement agreement contained no release of the defendants. The court warned that this option carried a risk that the case could later be reopened.

If no approval request or stipulation was filed by November 12, 2023, the court ordered a conference for November 17, 2023, at 10:00 a.m. The order did not approve the settlement or dismiss the case.