Rhea v. Clipper Realty, Inc.
- Robert Lehrburger
- 1:24-cv-01040
- U.S. District Court · Southern District of New York
- 2
In Rhea v. Clipper Realty, Judge Furman required settlement-approval filings after the parties reported an agreement in principle on wage claims.
The parties, the FLSA collective plaintiffs, and members of the proposed class are affected by the required settlement-approval process and the adjournment of the case deadlines.
What happened
Marcus Anthony Rhea sued Clipper Realty, Inc. and others under the Fair Labor Standards Act and New York Labor Law, on behalf of himself, other collective plaintiffs, and a proposed class. The parties told the court they had reached a settlement in principle.
The court did not approve the settlement. It required the parties to file by May 10, 2024, a motion seeking class certification, preliminary approval of the class settlement, and approval of the Fair Labor Standards Act settlement. The filings must include the proposed settlement, a notice and opt-out plan, a schedule, and a proposed order setting a fairness hearing.
Judge Jesse M. Furman also directed the parties to address whether the settlement is fair and reasonable and to provide information about any incentive payments and attorney-fee request. He warned that certain confidentiality, broad-release, and non-disparagement provisions generally would not be approved without case-specific justification, and adjourned the initial pretrial conference and all pending deadlines.
The detailed version
- Rhea v. Clipper Realty, Inc. · No. 1:24-cv-01040
- Robert Lehrburger
- Apr. 18, 2024
Background
The action asserts claims under the Fair Labor Standards Act (FLSA), a federal wage-and-hour law, and New York Labor Law. Marcus Anthony Rhea brought the action on behalf of himself, the FLSA collective plaintiffs, and the class. On April 18, 2024, the parties advised the court that they had reached a settlement in principle.
Court’s directives
The court explained that approval is required for an FLSA settlement when dismissal under Federal Rule of Civil Procedure 41 is contemplated, and for a class-wide settlement of state-law claims under Rule 23. By May 10, 2024, the parties must file a motion seeking class certification, preliminary approval of the class-wide settlement, and approval of the FLSA settlement.
The motion papers must include the proposed settlement; a proposed schedule for notifying class members, allowing them to opt out, obtaining preliminary approval, and holding a fairness hearing; and a proposal for how class members will receive notice. The parties must also file a proposed order as a separate docket entry and submit it as a Word document to chambers.
If the parties contemplate dismissing the FLSA claims under Rule 41, their supporting memorandum must explain why the settlement is fair and reasonable, addressing the factors identified by the court. The memorandum must also address any proposed incentive payments to plaintiffs and any proposed attorney’s fee award, with supporting documentation when appropriate.
Settlement provisions identified by the court
The court advised that it will not approve a settlement containing a confidentiality provision unless the parties show case-specific reasons sufficient to overcome the public’s common-law right of access to judicial documents. It also will not approve a release or waiver covering claims that have not accrued or claims unrelated to wage-and-hour matters unless the parties provide case-specific justification. A non-disparagement clause that bars negative statements about a defendant must include an exception for truthful statements about a plaintiff’s experience litigating the case, unless the parties provide case-specific justification for omitting that exception.
If the settlement includes any of those provisions, the parties’ joint letter must state whether they want the court to consider approving the agreement with the provisions removed. The court noted that it may approve or reject an FLSA settlement but may not modify the agreement itself.
Disposition and scheduling
The court did not approve or reject the settlement at this stage. It reminded the parties that they could consent to proceed before the assigned magistrate judge for settlement approval. The initial pretrial conference scheduled for May 22, 2024, and all pending deadlines were adjourned without a new date. The order was signed by Judge Jesse M. Furman.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.