Wismeg v. CUS MF Powerhouse LLC

Background

Taylor Wismeg, Cabrian Taggart, and Richard Medal sued CUS MF Powerhouse LLC, doing business as Coyote Ugly Saloon, and the individual defendants named in the caption. The plaintiffs brought claims under the Fair Labor Standards Act. On May 7, 2024, the court was notified that the parties had reached an agreement through mediation on all issues.

Settlement-approval requirements

The court ordered that the parties may not dismiss the action with prejudice based on the settlement unless the settlement is approved by the court or the Department of Labor. If the parties seek court approval, they must file a joint letter motion and the settlement agreement on the public docket by June 7, 2024. The motion must explain why the settlement is fair and reasonable, including the parties’ claims and defenses, the litigation risks, whether experienced counsel negotiated at arm’s length, and the possibility of fraud or collusion.

The motion must also address whether there is a genuine dispute about the hours worked or compensation owed and identify the amount of attorney’s fees the plaintiffs’ lawyer will seek. The court stated that it generally would not approve a settlement filed under seal or in redacted form without special circumstances. It also warned that it was unlikely to approve a general release, or a release covering claims unrelated to the wage-and-hour claims in the complaint, unless the parties explain why such a provision is appropriate.

Dismissal without prejudice

The court noted that the Second Circuit has not decided whether an FLSA case may be settled without court or Department of Labor approval and dismissed without prejudice under Rule 41(a)(1)(A). If the parties choose that route, they must file a stipulation within 30 days. The stipulation must be accompanied by an affirmation from plaintiffs’ counsel stating that the plaintiffs were clearly advised that the settlement does not prevent them from filing another lawsuit against the same defendants and affirming that the settlement contains no release of the defendants. The court warned that this option creates a risk that the case could be reopened later.

Order and current status

The court canceled all previously scheduled conferences and other deadlines. If no approval motion or stipulation is filed by June 7, 2024, the court ordered a conference for June 14, 2024, at 10:00 a.m. The order did not approve the settlement, dismiss the action, or decide the underlying FLSA claims. The provided text ends during a warning about possible sanctions against attorneys, so that portion of the order is incomplete.