Mota Bautista v. Countywide Builders, Inc.

Background

The opinion concerns an action under the Fair Labor Standards Act (FLSA). The court was advised by Magistrate Judge Robyn F. Tarnofsky that the parties had reached a settlement. The opinion does not state the settlement amount or other financial terms.

Settlement approval requirement

The court explained that an FLSA action cannot be dismissed based on a settlement unless the settlement agreement is approved by the court or by the Department of Labor. Therefore, to the extent the plaintiffs sought dismissal under Federal Rule of Civil Procedure 41, the plaintiffs or all parties jointly had to take one of two steps:

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

The filing had to be made on the public docket by April 26, 2024. The letter motion had to explain why the proposed settlement was fair and reasonable. At a minimum, it had to discuss:

- The plaintiffs’ possible range of recovery; - How the settlement would allow the parties to avoid expected burdens and expenses of proving their claims and defenses; - The seriousness of the litigation risks; - Whether experienced counsel negotiated the agreement at arm’s length; and - The possibility of fraud or collusion.

The letter also had to address whether a genuine dispute existed about the number of hours worked or the compensation owed, and how much of the settlement the plaintiffs’ attorney would seek as fees. Any request for attorney fees had to include contemporaneous billing records identifying, for each attorney, the date, hours worked, and nature of the work.

Terms the court indicated it generally would not approve

Unless special circumstances existed, the court stated that it would not approve a settlement filed under seal or in redacted form. Unless compelling circumstances existed, it also would not approve agreements containing sweeping nondisclosure provisions or broad releases of claims unrelated to the FLSA issues.

The court specifically identified releases that, absent extraordinary circumstances, would not be approved if they:

- Released numerous entities beyond the defendants, including related entities; - Bound the plaintiffs’ successors, assigns, heirs, or representatives; or - Required the plaintiffs to release any claim involving unpaid or improperly paid wages, rather than only the claims in this action.

Consent to magistrate judge jurisdiction and disposition

The parties could voluntarily consent to have Magistrate Judge Robyn F. Tarnofsky oversee settlement approval and all further proceedings. If they consented, they had to file a completed consent form by April 19, 2024. The court stated that parties could withhold consent without negative consequences. Any appeal would go directly to the United States Court of Appeals for the Second Circuit. The court vacated all conferences.

The opinion does not approve the settlement or dismiss the action. Instead, it sets the requirements and deadlines for seeking approval or documenting Department of Labor approval before dismissal.