United States District Court, S.D. New York
FRANKIE FIGUEROA, DANNION JORDAN, JAMEZ LEGGETT, LAMONT GRAY, and SHAWN PARRILLA, Plaintiffs,
ROVINI CONCRETE CORP., ROVINI CONSTRUCTION CORP., VINCENT ZOLLO, and ROSEMARY ZOLLO, Defendants.
MEMORANDUM OPINION AND ORDER
Honorable Ronald L. Ellis United States Magistrate Judge.
August 4, 2016, the Court held a settlement conference with
the Parties. The Court provided a recommendation for
settlement during a telephonic conference on August 10, 2016.
The Parties accepted the Court's recommendation on August
12, 2016. On September 14, 2016, the Parties consented to the
jurisdiction of the undersigned. (Doc. No. 39.) In accordance
with Cheeks v. Freeporl Pancake House, Inc., 793
F.3d 199 (2d Cir. 2015), if a settlement in a Fair Labor
Standards Act ("FLSA") case is to take effect, the
Court must first review and scrutinize the agreement to
ensure that it is fair. The Court ordered the Parties to file
the terms of the settlement agreement, a joint letter
explaining why the proposed settlement is fair and
reasonable, and an explanation of the reasonableness of the
attorneys' fees sought. On October 27, 2016, the Parties
submitted the requisite documents for approval. For the
reasons that follow, their request for approval of the
settlement agreement is DENIED.
in this district have held that FLSA settlements may not be
confidential and must be posted on the public docket.
Lopez v. Nights of Cabiria, LLC, 96 F.Supp.3d 170,
177 (S.D.N.Y. 2015). It follows that "the overwhelming
majority of courts ... reject the proposition that FLSA
settlement agreements can be confidential." Id.
(quoting Armenta v. Dirty Bird Grow. LLC No.
13-CV-4603 (WHP), 2014 WL 3344287, at *2 (S.D.N.Y. June 24,
2014)). "Such clauses can be contrary to public policy
because they prevent the spread of information about FLSA
actions to other workers ... who can then use that
information to vindicate their statutory rights."
Lopez v. Ploy Dee Inc., No. 15-CV-647 (AJN), 2016 WL
1626631, at *3 (S.D.N.Y. Apr. 21, 2016) (internal citations
omitted). Further, the Second Circuit observed that
confidentiality provisions may be '"in strong
tension with the remedial purposes of the FLSA.'"
Cheeks v. Freeport Pancake House, Inc., 796 F.3d
199, 206 (2d Cir. 2015) (quoting Nights in Cambria,
96 F.Supp.3d at 177.)
settlement agreement submitted for review in this case has
not been submitted on the public docket and contains a
confidentiality provision. While the agreement allows
Plaintiffs to discuss their claims and the facts pertaining
to their claims, Plaintiffs are prohibited from
"discuss[ing] or disclos[ing] the specific terms of
th[e] settlement, except with family members and their
counsel, accountants and financial advisors, if any."
The agreement further requires that if "contacted by any
party seeking information regarding the settlement or its
terms, " Plaintiffs or Plaintiffs' counsel must
respond with '"no comment'" or by
"informing] the inquiring party that 'the matter has
been resolved', without further discussion of the
details." The Court therefore rejects the settlement as
it stands because it contains a confidentiality provision
that is contrary to the policy behind the FLSA.
addition, courts in this District have rejected proposed
settlement agreements that contain general, broad releases
that include "unknown claims and claims that have no
relationship whatsoever to wage-and-hour issues."
Lopez v. Nights of Cabiria, 96 F.Supp.3d 170, 181
(S.D.N.Y. 2015) (quoting Moreno v. Regions Bank, 729
F.Supp.2d 1346, 1351 (M.D. Fla. 2010) ("[A]n employer is
not entitled to use [an] FLSA claim ... to leverage a release
from liability unconnected to the FLSA")); see also
Lasaro-Garcia v. Sengupta Food Services, No. 15-CV-4259
(RA), 2015 WL 9162701, at *2 (S.D.N.Y. Dec. 15, 2015)
(quoting Flood v. Carlson Restaurants Inc., No.
14-CV-2740 (AT) (GWG), 2015 WL 4111668, at *2 (S.D.N.Y. Jul.
6, 2015) ("These provisions are 'too sweeping to be
'fair and reasonable' and so must be
rejected'")); Flores-Mendieta v. Bitefood
Ltd., 15-CV-4997 (AJN), 2016 WL 1626630, at *2 (S.D.N.Y.
Apr. 21, 2016). The Second Circuit recognized how general
releases are illustrative of "the potential for abuse in
such settlements... underscor[ing] why judicial approval in
the FLSA setting is necessary." Cheeks, 796
F.3d at 206 (citing Nights of Cabiria, 96 F.Supp.3d
settlement agreement submitted for review in this case
contains such an overbroad general release. The agreement
requires Plaintiffs to "voluntarily release and forever
discharge Defendants... from any and all claims... which in
any way arise out of their employment by Defendants."
Such a release confers an "uncompensated, unevaluated
and unfair benefit" on Defendants. Nights of
Cabiria, 96 F.Supp.3d at 181. The Court therefore
rejects the proposed settlement as submitted on the
additional basis that it contains a general release.
Parties may refile the settlement and letter, curing the
defects described above, by January 31, 2017. The Parties
shall file the proposed settlement agreement on ECF. Failure
to do so will result in the Court setting pretrial deadlines
for this action.