Mateo v. S M Construction USA, Inc.

Background

Manuel Mateo sued S M Construction USA Inc. and Safdar Muhammad individually and on behalf of others similarly situated. The opinion states that the claims were brought under the Fair Labor Standards Act (FLSA). On October 11, 2023, the court was notified that the parties had reached an agreement on all issues.

Court’s Order

The court ordered that the parties could not dismiss the action with prejudice based on the agreement unless the settlement agreement was approved either by the court or by the Department of Labor. If the parties sought court approval, they had to file a joint letter motion and the settlement agreement on the public docket by November 12, 2023. The motion had to explain why the settlement was fair and reasonable, including the plaintiff’s possible recovery, the burdens and expenses avoided through settlement, the parties’ litigation risks, whether experienced counsel negotiated at arm’s length, and the possibility of fraud or collusion.

The filing also had to address whether a genuine dispute existed 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 a settlement filed under seal or in redacted form. It also warned that it was unlikely to approve a broad release covering 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 appropriate, they had to explain why.

The court further stated that the parties could proceed without court or Department of Labor approval by filing a dismissal without prejudice under Federal Rule of Civil Procedure 41(a)(1)(A). That filing had to be made on the public docket within 30 days and accompanied by an affirmation from plaintiffs’ counsel stating that the plaintiffs had been clearly advised that the settlement would not prevent another lawsuit against the same defendants and affirming that the agreement contained no release of the defendants. The court warned that this option could allow the case to be reopened in the future.

Disposition and Effect

This was an order establishing procedures for handling a reported FLSA settlement. The court did not approve the settlement, dismiss the case, or decide the merits of the wage-and-hour claims. If neither the required approval filing nor the dismissal filing was submitted by November 12, 2023, the court ordered a conference for November 17, 2023, at 10:00 a.m. Judge Valerie Caproni signed the order.