Laxa v. CIM Group L.P.

Background

The case involved wage-and-hour and employment-discrimination claims. Talia Rivera alleged, among other things, that the defendants violated the overtime provisions of the Fair Labor Standards Act (FLSA) and New York Labor Law. The opinion states that Gabriela Laxa did not assert wage-and-hour claims against the defendants.

After participating in court-sponsored mediation, the parties reported that they had reached a settlement. They consented to Magistrate Judge James L. Cott’s jurisdiction to review the wage-and-hour portion of the proposed settlement. The parties submitted a letter supporting the settlement and a proposed agreement for review under Cheeks v. Freeport Pancake House, which requires judicial review of certain FLSA settlements.

Court’s analysis

The court explained that there is generally a strong presumption that an FLSA settlement is fair, while also recognizing that courts must review such settlements. After reviewing the parties’ submissions and agreement, the court found that all terms, including the allocation of attorney’s fees, appeared fair and reasonable under the circumstances and the factors identified in Wolinsky v. Scholastic Inc. The court also stated that the agreement appeared to result from arm’s-length bargaining between experienced counsel.

The parties used separate settlement arrangements for the wage-and-hour claims and the discrimination claims. The court agreed that the separate settlement of the discrimination claims did not require judicial review. The opinion notes that the Second Circuit had not directly decided whether such bifurcated settlements are permissible, but cites district-court authority approving that structure.

Ruling and effect

Judge James L. Cott approved the settlement of Talia Rivera’s wage-and-hour claims. The court’s approval of the attorney-fee allocation was not an approval of the hourly rate of the plaintiffs’ counsel, and approval of the agreement did not approve any tax allocations the parties may have made.

The court retained jurisdiction to resolve disputes arising from the agreement, including enforcement or alleged breach. The clerk was directed to close the case.