Aljahmi v. 1738 Finest Deli Inc.

Background

The opinion states that Nagi Aljahmi brought a case under the Fair Labor Standards Act (FLSA), a federal law governing certain wages and working hours, against 1738 Finest Deli Inc. and Abdullah Aljahmli. The parties advised the court that they had reached a settlement. The opinion does not state the settlement amount or its other terms.

Settlement-approval requirement

The court explained that an FLSA case cannot be dismissed because of a settlement unless either the court or the U.S. Department of Labor approves the agreement. To the extent Nagi Aljahmi sought dismissal under Federal Rule of Civil Procedure 41, the plaintiff or the parties jointly had to do one of two things by April 4, 2024:

1. File a letter motion asking the court to approve the settlement, together with the settlement agreement; or 2. Provide documentation showing that the Department of Labor had approved the settlement.

The letter motion had to explain why the proposed agreement was fair and reasonable. The court required discussion of the plaintiff’s possible recovery, the burdens and expenses the settlement would avoid, the seriousness of the parties’ litigation risks, whether experienced counsel negotiated at arm’s length, and the possibility of fraud or collusion. It also required the parties to address whether there was a genuine dispute about the number of hours worked or the compensation owed, and how much of the settlement the plaintiff’s attorney would seek as fees.

Confidentiality, releases, and attorney fees

The court warned that, absent special circumstances, it would not approve a settlement filed under seal or in redacted form. It also stated that, absent compelling circumstances, it would not approve sweeping nondisclosure provisions or broad releases of claims unrelated to FLSA issues.

In particular, the court identified concerns with releases that extend to numerous entities beyond the defendants, bind the plaintiff’s successors or representatives, or waive wage claims beyond those involved in this case. Any request for attorney fees had to include contemporaneous billing records stating, for each attorney, the date, hours spent, and nature of the work.

Magistrate-judge option and disposition

The parties could consent to have Magistrate Judge Robyn F. Tarnofsky oversee settlement approval. The consent form had to be filed by March 15, 2024, if the parties chose that option. The order stated that consent was voluntary and could be withheld without negative consequences.

Judge Analisa Torres did not approve the settlement and did not dismiss the action in this order. Instead, she required the parties to submit a court-approval request or Department of Labor approval documentation before seeking dismissal. The order addressed settlement procedure rather than deciding the underlying wage claims.