Basurto v. Lenox Coffee LLC
- Subramanian
- 1:22-cv-06915
- U.S. District Court · Southern District of New York
- 2
Basurto v. Lenox Coffee: Judge Subramanian reopened the case and ordered submission of the proposed Fair Labor Standards Act settlement for approval.
The plaintiffs, Lenox Coffee LLC, the other defendants, and their attorneys were affected by the order’s reopening of the case and requirements for submitting the proposed settlement for approval.
What happened
In Basurto v. Lenox Coffee LLC, the parties told the court they had reached a settlement in principle concerning claims under the Fair Labor Standards Act, a federal wage-and-hour law.
The court directed the Clerk to cancel the May 16 dismissal order and reopen the case. It ordered the parties to submit their settlement agreement and a joint explanation by June 28, 2024, because court approval is required when the parties plan to dismiss Fair Labor Standards Act claims under the federal dismissal rule.
Judge Arun Subramanian also warned that the court would not approve certain confidentiality, overly broad release, or non-disparagement provisions without specific justification. The order did not approve the settlement; it set requirements for seeking approval.
The detailed version
- Basurto v. Lenox Coffee LLC · No. 1:22-cv-06915
- Subramanian
- May 17, 2024
Background
The opinion states that the parties advised the court that they had reached a settlement in principle. The case involves claims under the Fair Labor Standards Act (FLSA). The court explained that, when parties contemplate dismissing FLSA claims under Rule 41 of the Federal Rules of Civil Procedure, court approval is required. The order cites the appellate decision in Cheeks v. Freeport Pancake House, Inc., and the factors discussed in Wolinsky for evaluating whether an FLSA settlement is fair and reasonable.
Court’s Actions and Instructions
The Clerk of Court was directed to vacate, meaning cancel, the May 16 order of dismissal and reopen the case. The parties were ordered to submit the settlement agreement and a joint letter by June 28, 2024. The letter must explain the basis for the proposed settlement and why a Rule 41 dismissal should be approved as fair and reasonable. It must also address any incentive payments to the plaintiff and any attorney-fee award to plaintiff’s counsel, including supporting documentation when appropriate.
The parties were given the option to consent to proceed before the assigned magistrate judge for all purposes, including deciding whether to approve the settlement. If all parties consented, they were instructed to file a completed consent form by June 28, 2024.
Settlement Provisions Identified by the Court
The court advised that it would not approve a settlement containing a confidentiality provision unless the parties showed case-specific reasons strong enough to overcome the public-access right that can apply to judicial documents. It also 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. Finally, it would not approve a clause barring the plaintiff from making negative statements about a defendant unless the clause protected truthful statements about the plaintiff’s experience litigating the case or was otherwise specifically justified.
If the agreement contained any of those provisions, the parties were instructed to say whether they wanted the court instead to consider approving the agreement with the offending provisions removed. The court noted that it could approve or reject an FLSA settlement but could not modify the agreement itself. The order did not approve or reject the proposed settlement.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.