Crawford v. Leeding Builders Group, LLC

Background

Algi Crawford, Xavier Harrison, and Keveen Goris sued Leeding Builders Group, LLC and AECOM on behalf of themselves and others described as similarly situated. The complaint alleges, among other things, that the defendants failed to pay overtime wages in violation of the Fair Labor Standards Act (FLSA), a federal law governing minimum wages and overtime pay.

On February 5, 2024, the parties submitted a stipulation seeking voluntary dismissal of the action without prejudice under Federal Rule of Civil Procedure 41(a)(1)(A)(i). The opinion discusses the stipulation in the context of a settlement of the FLSA claims.

Court’s analysis

The court explained that parties cannot use a voluntary dismissal under Rule 41(a) to avoid judicial review of an FLSA settlement. In the Second Circuit, an FLSA settlement must be approved by the district court or the Department of Labor. The review is intended to determine whether the settlement is fair and reasonable to the plaintiff. This requirement applies whether the dismissal is with or without prejudice.

The court stated that the parties’ submission must address at least the plaintiffs’ possible recovery, the burdens and expenses the settlement would avoid, the litigation risks, whether experienced counsel negotiated the agreement at arm’s length, and the possibility of fraud or collusion. It must also address whether there is a genuine dispute about the hours worked or compensation owed and how much the plaintiffs’ attorney will seek in fees.

Any fee request must include contemporaneous billing records showing, for each attorney, the date, time spent, and work performed. The court also stated that, absent special or compelling circumstances, it would not approve a settlement filed under seal or in redacted form, containing sweeping nondisclosure provisions, or releasing claims unrelated to FLSA issues.

Disposition

The court stated that it would not approve the parties’ stipulation, and that the case remains open. By March 6, 2024, the parties must submit their settlement, a letter motion, and exhibits supporting the settlement’s fairness. The parties may instead consent to have Magistrate Judge Jennifer Willis oversee approval of the settlement by filing the required consent form by that date. Consent is optional and may be withheld without negative consequences. Any appeal would go directly to the United States Court of Appeals for the Second Circuit.