Molling v. Liebenrau LLC

Background

Nicole Molling sued Liebenbrau LLC, Cochecton Pump House Holdings LLC, David Robert Lieber, and Jin Zhang. She asserted claims under the Fair Labor Standards Act (FLSA) and New York Labor Law based on alleged unpaid wages, including overtime, as well as a claim under the New York Human Rights Law alleging pregnancy-based discrimination.

The parties jointly asked the court to approve a proposed settlement under the Second Circuit’s requirement that district courts review private settlements of FLSA claims. The proposed agreement called for a total payment of $13,000, consisting of $8,223.34 to Molling and $4,776.66 to her counsel for attorneys’ fees and costs.

Reasons for the Ruling

The court concluded that it could not approve the agreement at that time for three reasons.

First, the parties did not provide enough information to evaluate whether the settlement amount was fair and reasonable. Molling alleged that she was paid for 40 hours per week even though she often worked more than 70 hours and was not paid overtime. The parties described her unpaid-overtime damages as approximately $9,000, but did not provide her hourly wage, the number of weeks she worked, or the number of hours she worked each week. They also did not account for her claims for spread-of-hours wages, damages for allegedly inadequate wage notices and wage statements, or possible liquidated damages.

Second, the release provisions were not sufficiently mutual. Molling’s release covered a broad range of known and unknown claims relating to her employment and separation, while the defendants’ release covered claims related to the federal action that they had against Molling. The court found that the two provisions appeared imbalanced and required revision before approving a broad general release.

Third, the proposed mutual non-disparagement provision was inadequate. It prohibited false, derogatory, disparaging, or defamatory statements but did not include an exception for truthful statements by the parties about their litigation experiences. The court said the provision needed such an exception or should be removed entirely.

Disposition

Judge Andrew E. Krause denied without prejudice the parties’ application for approval of the proposed settlement. The parties were directed to file a revised settlement-approval application with sufficient information about Molling’s maximum possible recovery and a revised agreement with sufficiently mutual releases and an appropriate non-disparagement provision, or no non-disparagement provision. The filing deadline was March 25, 2024.