Conley v. Mavis Tire Supply, LLC

Background

Christopher Conley, William Bryce, and Samuel DeJesus sued Mavis Tire Supply, LLC. The court was advised that the parties had reached a settlement involving claims under the Fair Labor Standards Act (FLSA), the federal law governing wages and working hours.

Settlement-review requirement

The court explained that judicial approval is required for an FLSA settlement when the parties contemplate dismissal under Rule 41 of the Federal Rules of Civil Procedure. The court ordered the parties to submit the settlement agreement and a joint letter by April 26, 2024. The letter must explain the basis for the proposed settlement and why it should be approved as fair and reasonable, with reference to the factors identified in Wolinsky. It must also address any incentive payments to a plaintiff and any attorney-fee award to plaintiffs' counsel, including supporting documentation when appropriate.

The parties were given the option to consent to proceed before the assigned magistrate judge for all purposes. If all parties consented, they were required to file a completed consent form by April 26, 2024, and the magistrate judge would decide whether to approve the settlement.

Settlement provisions identified by the court

The court stated that it would not approve an agreement containing a confidentiality provision unless the parties showed case-specific reasons sufficient to overcome the common-law right of public access to judicial documents.

The court also stated that it would not approve a release or waiver covering claims that had not accrued or claims unrelated to wage-and-hour matters unless the parties provided case-specific reasons justifying such a broad release. In addition, the court would not approve a clause barring a plaintiff from making negative statements about the defendant unless the clause included an exception for truthful statements about the plaintiff's experience litigating the case, or the parties provided case-specific reasons justifying the clause without that exception.

If the agreement contained any of these provisions, the parties were required to say whether they wanted the court to consider approving the agreement with those provisions removed. The court noted that it could approve or reject the settlement but could not rewrite the agreement itself. The court also stated that, absent good cause, it would publicly file both the joint letter and the settlement agreement even if the agreement contained a confidentiality provision.

Disposition

Judge Subramanian ordered the parties to submit the settlement agreement and joint letter by April 26, 2024, allowed them to consent to magistrate-judge review, and adjourned all pending deadlines without setting a new date. The order did not approve or reject the settlement.