Laxa v. CIM Group L.P.

Background

Gabriela Laxa and Talia Rivera sued CIM Group L.P., 246 Spring Street (NY) LLC, Sean Lynch, and Sharon Telesca Feurer. The court was advised by letter filed January 16, 2024, that the parties had reached a settlement in principle. The opinion states that court approval is required for settlement of Fair Labor Standards Act claims when dismissal under Rule 41 of the Federal Rules of Civil Procedure is contemplated.

Court’s order

The court ordered the parties to submit the settlement agreement and a joint letter by January 31, 2024. The letter must explain the basis for the proposed settlement and why, if dismissal under Rule 41 is contemplated, the settlement should be approved as fair and reasonable. It must also address any incentive payments to the plaintiffs and any attorney’s fee award to plaintiffs’ counsel, including supporting documentation where appropriate.

The parties were told they could consent to proceed for all purposes before the assigned magistrate judge, who would then decide whether to approve the settlement. If all parties consented, they were directed to file a fully executed consent form by January 31, 2024.

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 common-law right of access to judicial documents. It also would not approve a release or waiver covering claims that had not accrued or claims unrelated to wage-and-hour matters, absent case-specific justification. Likewise, it would not approve a clause barring a plaintiff from making negative statements about a defendant unless the clause included an exception for truthful statements about the plaintiff’s experience litigating the case, absent case-specific justification.

If the agreement contained any of those provisions, the parties’ letter had to say 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. All pending deadlines were adjourned without a new date, all pending motions were denied as moot, and the Clerk of Court was directed to terminate the motion at ECF No. 22.

Disposition

Judge Arun Subramanian ordered submission of the proposed settlement materials, denied all pending motions as moot, adjourned all pending deadlines, and directed termination of the ECF No. 22 motion. The opinion did not approve the settlement itself.