Stancul v. JSJL Realty Corp.

Background

Jovan Stancul brought this action against JSJL Realty Corp. and other defendants under the Fair Labor Standards Act, a federal law governing matters including overtime pay. The parties informed the court on April 23, 2024, that they had reached a settlement in principle.

The court explained that when FLSA claims are settled and dismissed under Rule 41 of the Federal Rules of Civil Procedure, the settlement must be reviewed to ensure that it is fair. The review also applies to any proposed attorney’s fee award. The opinion states that, instead of seeking court approval, the parties may choose to proceed through a Rule 68(a) offer of judgment, which does not require judicial approval for resolution of FLSA claims.

Order

The court ordered the parties to submit the settlement agreement and a joint letter by Friday, June 7, 2024. The letter must explain the basis for the proposed settlement and, if the parties contemplate dismissal under Rule 41, why the settlement should be approved as fair and reasonable under the factors identified in the court’s cited precedent. It must also address any incentive payment to Stancul and any attorney’s fee award to his counsel, including supporting documentation when appropriate.

The court advised that it would not approve a settlement containing a confidentiality provision without case-specific reasons sufficient to overcome the public’s common-law right of access to judicial documents. It also would not approve an overly broad release or waiver covering claims that had not accrued or claims unrelated to wage-and-hour matters without case-specific justification. The court further required a non-disparagement clause to preserve an exception for truthful statements about the plaintiff’s experience litigating the case, unless specific reasons justified omitting that exception.

If the agreement contains one of those provisions, the parties must state whether they want the court alternatively to consider approval with the provision removed. The court noted that it may approve or reject the settlement but may not modify the agreement itself. The parties were also reminded that they could consent to proceed before the assigned magistrate judge for all purposes, including settlement approval, by filing the required consent form by May 3, 2024.

Disposition

The court ordered the parties to submit the settlement materials and did not approve or reject the settlement in this order. Judge Rearden also set the stated deadlines and conditions for any later settlement review.