Guillermo v. Starting C & M Corp.
- Subramanian
- 1:23-cv-05022
- U.S. District Court · Southern District of New York
- 2
In Guillermo v. Starting C & M Corp., Judge Subramanian ordered the parties to submit their FLSA settlement for approval and explained limits on settlement terms.
Alicia Carmen Guillermo and the defendants in the FLSA and New York Labor Law action, including Starting C & M Corp. doing business as Andy’s Restaurant.
What happened
In Guillermo v. Starting C & M Corp., Alicia Carmen Guillermo and the defendants told the court that they had settled claims under the Fair Labor Standards Act and New York Labor Law.
The court ordered the parties to file their settlement agreement and a joint explanation by January 24, 2024. The explanation must address whether the settlement is fair and reasonable, any incentive payment to Guillermo, and any attorney’s fees. The court also described settlement terms it generally would not approve, including unsupported confidentiality provisions, overly broad releases, and certain non-disparagement clauses.
Judge Subramanian did not approve the settlement in this order. He also adjourned all pending deadlines indefinitely and reminded the parties that they could consent to have the assigned magistrate judge decide whether to approve the settlement.
The detailed version
- Guillermo v. Starting C & M Corp. · No. 1:23-cv-05022
- Subramanian
- Jan. 10, 2024
Background
Alicia Carmen Guillermo and the defendants, including Starting C & M Corp. doing business as Andy’s Restaurant, notified the court that they had reached a settlement in an action under the Fair Labor Standards Act (FLSA) and New York Labor Law. The court explained that judicial approval is required for an FLSA settlement when the parties contemplate dismissing the action under Rule 41 of the Federal Rules of Civil Procedure.
Order
The court ordered the parties to submit the settlement agreement and a joint letter by January 24, 2024. The letter must explain the basis for the proposed settlement and why it is fair and reasonable, addressing the factors identified in the court’s cited precedent. It must also address any incentive payment to Guillermo and any attorney’s fee award to her counsel, including supporting documentation when appropriate.
The parties may instead consent to proceed for all purposes before the assigned magistrate judge, who would then decide whether to approve the settlement. If they choose that option, all parties must file a completed consent form by January 24, 2024.
Settlement terms identified by the court
The court stated that it would not approve an agreement containing any of these provisions unless the parties showed case-specific reasons supporting them:
- A confidentiality provision that is not justified by reasons sufficient to overcome the public’s common-law right of access to judicial documents. - A release or waiver covering claims that have not accrued or claims unrelated to wage-and-hour matters. - A provision barring a plaintiff from making negative statements about a defendant without an exception for truthful statements about the plaintiff’s experience litigating the case.
If the agreement contains such a provision, the parties must state whether they want the court to consider approving the agreement with that provision removed. The court noted that it may approve or reject an FLSA settlement but may not rewrite the parties’ agreement. All pending deadlines were adjourned indefinitely. The order required further settlement submissions; it did not approve or reject the settlement itself.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.