Suarez v. BQA Transport LLC

Background

The court was notified on October 30, 2023, that mediation had produced an agreement resolving all issues between the parties. The case involves claims under the Fair Labor Standards Act (FLSA).

Settlement approval and dismissal with prejudice

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 a dismissal with prejudice, they had to file either a joint letter motion asking the court to approve the agreement or documentation showing Department of Labor approval. The filing, including the settlement agreement, had to be placed on the public docket by November 30, 2023.

The court stated that the letter motion had to explain why the settlement was fair and reasonable. It had to address, at a minimum:

- the plaintiff’s possible recovery; - the burdens and expenses the settlement would help the parties avoid in proving their claims and defenses; - the seriousness of the risks of continuing the litigation; - the length of negotiations between experienced counsel; and - the possibility of fraud or collusion.

The motion also had to address whether a genuine dispute existed about the number of hours worked or the compensation owed, and how much of the settlement the plaintiff’s attorney would seek as fees.

Absent special circumstances, the court stated that it would not approve an agreement filed under seal or in redacted form.

Release provisions

The court advised that it was unlikely to approve a settlement containing a general release or releasing claims that were not raised in the complaint and were unrelated to FLSA or related state wage-and-hour claims. The court said such releases are generally disfavored. If the parties believed unusual circumstances justified a release extending beyond wage-and-hour and related labor-law claims, the joint motion had to explain why that term was appropriate. The court warned that failure to do so would likely result in summary denial of the motion and could also lead to sanctions against the attorneys.

Dismissal without prejudice

The court noted that the United States Court of Appeals for 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 under Rule 41(a)(1)(A) on the public docket within 30 days. The stipulation had to include an affirmation from the plaintiff’s counsel stating that the plaintiff or plaintiffs had been clearly advised that the settlement would not prevent them from filing another lawsuit against the same defendants. Counsel also had to affirm that the settlement agreement did not contain a release of the defendants. The court warned that this option carried the risk that the case could be reopened later.

Other orders and deadlines

The court canceled all previously scheduled conferences and other deadlines. If the parties filed neither a letter nor a stipulation by November 30, 2023, the court ordered a conference for December 1, 2023, at 10:00 a.m. in Courtroom 443 of the Thurgood Marshall U.S. Courthouse in New York, New York.

Disposition

The order did not approve the settlement or enter a dismissal. It established the procedures and deadlines the parties had to follow if they sought dismissal based on the settlement.