Rhea v. Clipper Realty, Inc. ( 2024 )

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK ---------------------------------------------------------------------- X : MARCUS ANTHONY RHEA, : : Plaintiff, : : 24-CV-1040 (JMF) -v- : : ORDER CLIPPER REALTY, INC. et al., : : Defendants. : : ---------------------------------------------------------------------- X JESSE M. FURMAN, United States District Judge: On April 18, 2024, the Court was advised that the parties in this action, brought pursuant to the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201 et seq., had reached a settlement in principle. That same day, the Court ordered the parties to file a motion for class certification, preliminary approval of the class-wide settlement, and approval of the FLSA settlement. See ECF No. 18. On April 29, 2024, the parties informed the Court that they had reached a settlement on an individual basis only. See ECF No. 19. Accordingly, the Court’s April 18, 2024 Order, ECF No. 18, is hereby VACATED, and the parties shall adhere to the new deadlines below. Under the FLSA, an employer who violates the requirement that overtime wages be paid must pay both the unpaid overtime compensation and an additional equal amount as liquidated damages. See id. § 216(b). In the event of a settlement and dismissal under Rule 41 of the Federal Rules of Civil Procedure, the settlement — including any proposed attorney’s fee award — must be scrutinized by the Court to ensure that it is fair. See Cheeks v. Freeport Pancake House, Inc., 796 F.3d 199 (2d Cir. 2015) (holding that “stipulated dismissals settling FLSA claims with prejudice require the approval of the district court or the DOL to take effect”); Wolinsky v. Scholastic, Inc., 900 F. Supp. 2d 332, 335-36 (S.D.N.Y. 2012) (identifying factors a court may consider in evaluating the fairness and reasonableness of a proposed FLSA settlement and the reasonableness of a proposed attorney’s fee award).1 0F Accordingly, unless and until the Court orders otherwise, it is hereby ORDERED that, on or before May 14, 2024, the parties must submit the settlement agreement to the Court along with a joint letter explaining the basis for the proposed settlement and why, if parties contemplate dismissal under Rule 41, it should be approved as fair and reasonable, with reference to the factors discussed in Wolinsky. See Wolinsky, 900 F. Supp. 2d at 335-36. The 1 Judicial approval is not required for a settlement of FLSA claims by way of a Rule 68(a) offer of judgment. See Mei Xing Yu v. Hasaki Rest., Inc., 944 F.3d 395, 414 (2d Cir. 2019). letter should also address, if applicable, any incentive payments to the plaintiff and any attorney’s fee award to plaintiff's counsel (with documentation to support the latter, if appropriate). In addition, the parties are advised that the Court will not approve any settlement agreement containing any of the following provisions: e aconfidentiality provision, unless the parties can show that there are reasons, specific to the case, sufficient to overcome the common law right of access to judicial documents. See id. at 337-41 (explaining the common law right of public access as it relates to settlement agreements in FLSA cases); see also Sanz v. Johny Utah 51 LLC, No. 14-CV- 4380 (JMF), 2015 WL 1808935, at *2 (S.D.N.Y. Apr. 20, 2015); e arelease or waiver provision that releases or waives claims that have not accrued or claims unrelated to wage-and-hour matters, unless the parties can show that there are reasons, specific to this case, justifying such a broad release. See, e.g., Lopez v. Nights of Cabiria, LLC, 96 F. Supp. 3d 170, 181 (S.D.N.Y. 2015); or e aclause that bars a plaintiff from making negative statements about a defendant unless it includes a carve-out for truthful statements about a plaintiffs experience in litigating his case, or unless the parties can show that there are reasons, specific to this case, justifying a non-disparagement clause without such a carve-out. See, e.g., Zapata v. Bedoya, No. 14-CV-4114, 2016 WL 4991594, at *2 (E.D.N.Y. Sept. 13, 2016). In the event that the settlement agreement does contain any of these provisions, the parties’ joint letter should also indicate whether the parties want the Court, in the alternative, to consider for approval the settlement agreement with the provision(s) stricken (in which case, the Court would, absent good cause, docket both the parties’ joint letter and the settlement agreement itself — notwithstanding any confidentiality provision). Cf Fisher v. SD Protection Inc., 948 F.3d 593, 606 (2d Cir. 2020) (holding that a district court may approve or reject a settlement of FLSA claims, but may not modify the agreement itself). The parties are reminded that because they have consented to proceed for all purposes before the assigned Magistrate Judge, Magistrate Judge Lehrburger will decide whether to approve the settlement. Finally, the initial pretrial conference scheduled for May 22, 2024, see ECF No. 6, along with all pending deadlines in this case, are adjourned sine die. SO ORDERED. Dated: April 30, 2024 New York, New York SSE RMAN ited States District Judge