Vargas v. Gorillas Technologies US Inc.
- Analisa Torres
- 1:23-cv-08622
- U.S. District Court · Southern District of New York
- 4
In Vargas v. Gorillas Technologies US Inc., Judge Torres required approval of the reported Fair Labor Standards Act settlement before dismissal with prejudice.
Adolfo Vargas and Gorillas Technologies US Inc. are affected because any dismissal with prejudice based on their settlement requires approval by the court or the Department of Labor. Their attorneys are affected by the required disclosure and billing-record requirements, and the parties may choose whether to consent to Magistrate Judge James L. Cott’s jurisdiction.
What happened
Vargas v. Gorillas Technologies US Inc. is a Fair Labor Standards Act case in which the court was told that the parties had reached a settlement.
The court said the case could not be dismissed with prejudice unless the settlement was approved by the court or the Department of Labor. It required any request for approval to explain why the settlement was fair and reasonable, address disputes about hours and compensation, and disclose requested attorney’s fees with supporting billing records. The parties had to file the request and settlement agreement by April 1, 2024, if they sought dismissal with prejudice.
Judge Torres also said pending motions were moot and vacated all conferences. The parties could choose to have Magistrate Judge James L. Cott oversee settlement approval, but they could withhold consent without negative consequences.
The detailed version
- Vargas v. Gorillas Technologies US Inc. · No. 1:23-cv-08622
- Analisa Torres
- Mar. 1, 2024
Background
The court stated that the parties had informed it that they reached a settlement in this Fair Labor Standards Act (FLSA) case. The opinion does not state the settlement amount or other settlement terms.
Settlement-Approval Requirements
The court held that the action could not be dismissed with prejudice unless the settlement agreement was approved either by the court or by the Department of Labor. If the parties sought dismissal with prejudice, they were required to file a joint letter motion asking the court to approve the settlement, or documentation showing Department of Labor approval. The filing, including the settlement agreement, was due on April 1, 2024.
The court directed the letter motion to explain why the proposed settlement was fair and reasonable. It identified these considerations: the plaintiff’s 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. The filing also had to address whether a genuine dispute existed about the hours worked or compensation owed and how much the plaintiff’s attorney would seek in fees.
Any request for attorney’s fees had to include contemporaneous billing records identifying, for each attorney, the date, hours worked, and nature of the work. The court also stated that, absent special circumstances, it would not approve a settlement filed under seal or in redacted form. Absent compelling circumstances, it would not approve a settlement containing sweeping nondisclosure provisions or broad releases of claims unrelated to FLSA issues.
Other Orders
The parties could consent to proceed before Magistrate Judge James L. Cott, who would then oversee settlement approval. If they consented, they had to file a fully executed consent and reference form by March 19, 2024. The court stated that consent was voluntary and could be withheld without negative consequences. It also stated that any appeal would go directly to the United States Court of Appeals for the Second Circuit.
The court ruled that any pending motions were moot and vacated all conferences. The opinion does not approve the settlement or state that dismissal with prejudice was entered.
Read the full 4-page opinion on CourtListener, the free public archive maintained by the Free Law Project.