Reid v. Mainstream Electric, Inc.

Background

The action arises under the Fair Labor Standards Act, a federal law governing matters including overtime pay. The parties advised the court that they had reached a settlement in principle. The opinion explains that a settlement resolving Fair Labor Standards Act claims through a dismissal under Rule 41 generally requires court approval, including review of any proposed attorneys’ fee award, to ensure that the agreement is fair.

Court’s Order

The court ordered the parties to submit the settlement agreement and a joint letter by April 18, 2024. The letter must explain the basis for the proposed settlement and why the court should approve it as fair and reasonable, addressing the fairness factors identified in the cited precedent. If applicable, the letter must also discuss any payment to the plaintiff for serving as an incentive and any attorneys’ fee award, with supporting documentation when appropriate.

The court reminded the parties that they could consent to proceed before the assigned magistrate judge for all purposes, including deciding whether to approve the settlement. If they all consented, they had to file a completed consent form by April 18, 2024. The court also noted that judicial approval is not required for a Fair Labor Standards Act settlement made through a Rule 68(a) offer of judgment.

Settlement Provisions Addressed

The court advised that it would not approve an agreement containing a confidentiality provision unless the parties showed case-specific reasons sufficient to overcome the public’s common-law right of access to judicial documents. It likewise would not approve a release of unaccrued claims or claims unrelated to wage-and-hour matters without case-specific justification. A non-disparagement clause barring negative statements about a defendant must include an exception allowing truthful statements about the plaintiff’s experience litigating the case, unless the parties provide sufficient case-specific justification for omitting that exception.

If the proposed agreement contains any of those provisions, the parties must say whether they want the court to consider approving the agreement with the provisions removed. The court stated that it could approve or reject the agreement but could not rewrite it.

Recusal Disclosure and Disposition

Judge Margaret M. Garnett disclosed that she had been Commissioner of the New York City Department of Investigation during portions of the period identified in the complaint, from 2018 through 2021, and remained in that position until November 10, 2021. She stated that, to her knowledge, she had no particular or confidential information about the events in the complaint and saw no basis for recusal. Any party seeking recusal, providing additional information relevant to recusal, or requesting a conference about the issue had to file an appropriate letter by April 10, 2024. The court postponed all other pending dates and deadlines indefinitely. The order did not approve or reject the settlement.