Carter v. Fresh Dining Concepts LLC

Background

The court was advised that Kiera Carter and Fresh Dining Concepts LLC had 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 requirement

The court explained that an FLSA action cannot be dismissed under Federal Rule of Civil Procedure 41 based on a settlement unless the settlement has been approved by the court or the Department of Labor. Accordingly, to the extent Carter seeks dismissal under Rule 41, she or the parties jointly must either file a letter motion asking the court to approve the settlement or provide documentation showing Department of Labor approval. The filing must include the settlement agreement and must be made on the public docket by April 22, 2024.

The letter motion must explain why the settlement is fair and reasonable. The court identified these minimum subjects:

- Carter’s possible recovery range; - how the settlement would avoid the burdens and expenses of proving the parties’ claims and defenses; - the seriousness of the litigation risks; - whether experienced counsel negotiated the settlement at arm’s length; and - the possibility of fraud or collusion.

The filing must also address whether a genuine dispute exists about the hours worked or compensation owed, and how much of the settlement Carter’s attorney will seek as fees. The court stated that general or conclusory statements about the possible recovery and litigation risks would not be enough.

Confidentiality, releases, and attorney fees

The court stated 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 a settlement containing a broad nondisclosure provision or a release of claims unrelated to FLSA issues.

The opinion specifically cautions against releases that cover numerous entities beyond the defendant, bind Carter’s successors or representatives, or release wage claims beyond those involved in this case. Any request for attorney fees must include contemporaneous billing records showing, for each attorney, the date, hours worked, and nature of the work.

Disposition

Judge Analisa Torres did not approve or reject the settlement in this order. Instead, the order requires the specified approval filing or Department of Labor documentation before dismissal can be sought. The parties may also consent to proceed before Magistrate Judge Robyn F. Tarnofsky, who the order says would oversee settlement approval. The order later refers to further proceedings before “Judge Wang” if that consent is approved; the opinion therefore contains an apparent internal inconsistency about which judge would handle those proceedings.