Hipolito v. Accurate Door & Construction of NY, Inc.

Background

Jorge Hipolito brought this action against Accurate Door & Construction of NY, Inc., and other defendants under the Fair Labor Standards Act (FLSA), a federal law governing wages and overtime. The court explained that an employer violating the overtime-pay requirement may owe the unpaid overtime and an equal amount as liquidated damages. The parties advised the court that they had reached a settlement in principle.

Court’s Order

The court ordered the parties to submit the settlement agreement and a joint letter by May 17, 2024. The letter must explain the basis for the proposed settlement and why, if the parties plan to dismiss the case under Federal Rule of Civil Procedure 41, the settlement should be approved as fair and reasonable. The letter must also address any payment to Hipolito beyond the settlement amount intended to encourage participation in the case and any attorney’s fee award, including supporting documentation for the fees when appropriate.

The court reminded the parties that they could consent to proceed before the assigned magistrate judge for all purposes, including settlement approval. If all parties consent, they must file the completed consent form by May 17, 2024.

Settlement Terms Identified by the Court

The court advised that it would not approve an agreement containing certain provisions unless the parties provide sufficient, case-specific reasons. These included:

- a confidentiality provision, unless justified by reasons specific to this case that overcome the public’s general right to access court documents; - a release or waiver of claims that had not yet arisen or claims unrelated to wage-and-hour matters, unless the parties justify the broad release with case-specific reasons; and - a provision barring Hipolito from making negative statements about a defendant, unless it allows truthful statements about his experience litigating the case or is otherwise justified by case-specific reasons.

If the agreement contains one of these provisions, the parties must state whether they want the court to consider approving the agreement with the provision removed. The court noted that it may approve or reject an FLSA settlement but may not rewrite the agreement itself. All other pending dates and deadlines were adjourned indefinitely.

Disposition

The court ordered additional settlement submissions and did not approve the settlement in this order. The opinion does not decide whether the alleged wage claims are valid or whether the proposed settlement is fair.