Angulo v. Clowns.com, Inc.

Background

The court stated that the parties had reached a settlement in this Fair Labor Standards Act (FLSA) case. The plaintiffs are Brayan Angulo, Cameron Pille, Janina Salorio, and Xander Black, individually and on behalf of others similarly situated. The defendants are Clowns.com, Inc., Adolph Rodriguez, also identified in the caption by several other names, and Erica Barbuto.

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 by the Department of Labor. Accordingly, to the extent the plaintiffs sought dismissal under Rule 41, the plaintiffs or the parties jointly had to do one of two things by May 29, 2024: file a letter motion asking the court to approve the settlement, together with the settlement agreement, or provide documentation showing Department of Labor approval.

Required information

The court directed any approval motion to explain why the proposed settlement was fair and reasonable. It identified these factors as relevant:

- the plaintiffs’ possible range of recovery; - the burdens and expenses the settlement would avoid; - 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 also had to address whether a genuine dispute existed about the number of hours worked or the amount of compensation owed, and how much of the settlement the plaintiffs’ attorney would seek as fees. Any fee request had to include contemporaneous billing records showing, for each attorney, the date, hours worked, and nature of the work.

Terms the court cautioned against

The court said it generally would not approve a settlement filed under seal or in redacted form absent special circumstances. It also warned that, absent compelling circumstances, it would not approve sweeping nondisclosure provisions or broad releases of claims unrelated to FLSA issues. In particular, the court identified concerns with releases covering numerous entities beyond the defendants, binding successors, assigns, heirs, or representatives, and releasing wage claims beyond those involved in this case.

Consent to another judge

The parties could consent to proceed before Judge Gary Stein, who would then oversee settlement approval. If they consented, they were required to file a fully executed consent form by May 14, 2024. The order stated that the parties could withhold consent without negative consequences and that any appeal would go directly to the United States Court of Appeals for the Second Circuit.

Disposition

The order did not approve the settlement or dismiss the case. Instead, it required the parties to submit a court-approval request or proof of Department of Labor approval before seeking dismissal under Rule 41.