Cartagena v. Sixth Avenue West Associates LLC

Background

Gabriel Cartagena brought this action against Sixth Avenue West Associates LLC under the Fair Labor Standards Act (FLSA), 29 U.S.C. § 201 et seq., and New York Labor Law. The court was advised that the parties had reached a settlement. The opinion does not state the settlement amount or other terms.

Court’s Order

The court explained that judicial approval is required for a settlement of FLSA claims when dismissal under Rule 41 of the Federal Rules of Civil Procedure is contemplated. It ordered the parties to submit the settlement agreement and a joint letter by January 25, 2024. The letter must explain the basis for the proposed settlement and why it should be approved as fair and reasonable, referring to the factors discussed in Wolinsky. It must also address any incentive payment to the plaintiff and any attorney’s fee award to plaintiff’s counsel, including supporting documentation when appropriate.

The court advised that the parties could instead consent to proceed before the assigned Magistrate Judge for all purposes, in which case that judge would decide whether to approve the settlement. Any fully executed consent form was due by the same date.

Settlement Provisions Identified by the Court

The court stated that it would not approve a settlement containing a confidentiality provision unless the parties showed case-specific reasons sufficient to overcome the public’s common-law right of access to judicial documents. It likewise stated that it would not approve a release or waiver covering claims that had not accrued or claims unrelated to wage-and-hour matters without case-specific justification. The court also identified non-disparagement provisions that bar negative statements about the defendant without an exception for truthful statements about the plaintiff’s experience litigating the case, unless the parties provide case-specific justification.

If the agreement contained any of those provisions, the parties’ letter had to state whether they wanted the court to consider approving the agreement with the provisions removed. The court noted that it could approve or reject an FLSA settlement but could not modify the agreement itself.

Disposition

The court did not approve the settlement in this order. It ordered the parties to submit additional materials, directed the Clerk of Court to strike Docket 27, and reopened the case. The order was signed by Arun Subramanian, United States District Judge, on January 11, 2024.