Kaloshi v. West Village Oasis, Inc.

Background

The plaintiffs and defendants informed the court that they had reached a settlement in principle. The case includes claims under the Fair Labor Standards Act, a federal law governing matters such as minimum wages and overtime. The parties contemplated dismissal under Rule 41 of the Federal Rules of Civil Procedure. The court explained that, in those circumstances, approval is required before the FLSA claims can be settled and the case dismissed.

Order

The court ordered the parties to submit the settlement agreement and a joint letter by February 12, 2024. The letter must explain the basis for the proposed settlement and why it should be approved as fair and reasonable. It must also address any incentive payments to a plaintiff and any attorney’s fee award to the plaintiffs’ counsel, including supporting documentation when appropriate.

The court advised that it would not approve a settlement containing a confidentiality provision unless the parties provided case-specific reasons sufficient to overcome the public’s common-law right of access to judicial documents. It likewise 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 would not approve a provision barring a plaintiff from making negative statements about a defendant unless it included an exception for truthful statements about the plaintiff’s experience litigating the case, absent sufficient case-specific reasons for omitting that exception.

If the agreement contains any of those provisions, the parties must state whether they want the court instead to consider approving the agreement with those provisions removed. The court noted that it may approve or reject an FLSA settlement but may not rewrite the agreement itself. The parties may also consent to proceed before the assigned magistrate judge for all purposes, in which case that judge would decide whether to approve the settlement. All pending deadlines were adjourned without a new date.

Disposition

Judge Arun Subramanian did not approve or reject the settlement. He ordered the parties to submit the required materials by February 12, 2024 and advised them about provisions the court would not approve absent additional justification.