Rhea v. Clipper Realty, Inc.

Background

Marcus Anthony Rhea brought this action against Clipper Realty, Inc. and other defendants under the Fair Labor Standards Act, a federal law governing matters including overtime pay. On April 18, 2024, the parties advised the court that they had reached a settlement in principle. The court then ordered them to seek class certification, preliminary approval of a class-wide settlement, and approval of the Fair Labor Standards Act settlement.

On April 29, 2024, the parties informed the court that their settlement was individual only. The court vacated its April 18 order and set new requirements.

Settlement-review requirements

The court ordered the parties to submit the settlement agreement and a joint letter by May 14, 2024. The letter must explain the basis for the proposed settlement and, if the parties contemplate dismissing the case under Federal Rule of Civil Procedure 41, why the settlement should be approved as fair and reasonable. The letter must also address any incentive payment to Rhea and any attorney’s fee award, with supporting documentation when appropriate.

The court stated that it would not approve a settlement 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 stated that it would not approve a release or waiver covering claims that had not accrued or claims unrelated to wage-and-hour matters unless the parties provided case-specific justification. It also identified restrictions on non-disparagement provisions that bar negative statements without an exception for truthful statements about the plaintiff’s experience litigating the case.

If the agreement contains one of those provisions, the parties must say whether they want the court to consider approving the agreement with the provision removed. The court noted that it may approve or reject an Fair Labor Standards Act settlement but may not rewrite the agreement itself.

Ruling and current status

Judge Furman vacated the April 18 order and ordered the parties to meet the May 14 submission deadline. He did not approve or reject the settlement in this order. Because the parties consented to proceed before the assigned magistrate judge for all purposes, Magistrate Judge Lehrburger will decide whether to approve the settlement. The initial pretrial conference and all pending deadlines were adjourned indefinitely.