United States District Court, E.D. New York
QITING YANG, on behalf of herself and all other persons similarly situated, Plaintiff,
MATSUYA QUALITY JAPANESE INC., d/b/a MATSUYA QUALITY JAPANESE EATS, BERNARD BENLEVI, and LONGLIN LI, Defendants.
Plaintiff: Ruchama Leah Cohen, Esq., Michael Samuel, Esq.,
Samuel & Stein.
Defendant Benlevi: Bernard Benlevi, pro se.
remaining Defendants: No appearances
MEMORANDUM & ORDER
pending before the Court is the parties' joint letter
requesting approval of their settlement agreement (the
“Settlement Agreement”) in this Fair Labor
Standards Act (“FLSA”) case. (Sept. 15, 2016
Ltr., Docket Entry 20.) For the reasons set forth below, the
parties' joint request is DENIED.
parties previously requested approval of their agreement on
January 5, 2016. (Nov. 12, 2015 Ltr., Docket Entry 18.) This
Court rejected the agreement because it contained a
confidentiality provision and a “sweeping”
release provision. (Elec. Order, Jan. 19, 2016.)
Additionally, the agreement failed to specify the amount of
attorneys' fees. (Elec. Order, Jan. 19, 2016.) On
September 15, 2016, the parties filed the revised Settlement
Agreement for the Court's review. (Settlement Agree.,
Docket Entries 20-1 & 20-2.))
dismissing FLSA claims with prejudice must be approved by the
district court or the Department of Labor in order to take
effect. Cheeks v. Freeport Pancake House, Inc., 796
F.3d 199, 206 (2d Cir. 2015). To determine whether an FLSA
settlement is fair and reasonable, the court considers
“the bona fides of the [parties'] dispute,
including (1) the plaintiff's range of possible recovery;
(2) the seriousness of the litigation risks faced by the
parties; (3) the extent to which the settlement will enable
the parties to avoid anticipated burdens and expenses that
would be incurred if they proceeded with litigation; (4)
whether the settlement agreement is the product of arm's
length bargaining between experienced counsel; and (5)
whether there is fraud or collusion.” Lopez v.
41-06 Bell Blvd. Bakery LLC, No. 15-CV-6953, 2016 WL
6156199, at *1 (E.D.N.Y. Oct. 3, 2016), R&R
adopted, 2016 WL 6208481 (E.D.N.Y. Oct. 21, 2016)
(quoting Wolinsky v. Scholastic Inc., 900 F.Supp.2d
332, 335 (S.D.N.Y. 2012)) (internal quotation marks omitted).
in Cheeks, the Second Circuit provided guidance as
to the types of provisions that contravene the FLSA's
remedial purpose of “prevent[ing] abuses by
unscrupulous employers, and remedy[ing] the disparate
bargaining power between employers and employees.”
Cheeks, 796 F.3d at 207. Such provisions include (1)
“highly restrictive confidentiality provisions, ”
(2) “overbroad release[s] that would waive practically
any possible claim against the defendants, including unknown
claim[s] and claims that have no relationship whatsoever to
wage-and-hour issues, ” and (3) “provision[s]
that would set the fee for plaintiff's attorney . . .
without adequate documentation.” Gonzales v. Lovin
Oven Catering of Suffolk, Inc., No. 14-CV-2824, 2015 WL
6550560, at *3 (E.D.N.Y. Oct. 28, 2015) (quoting
Cheeks, 796 F.3d at 206) (ellipsis in original;
internal quotation marks omitted).
the Court continues to find the Settlement Agreement's
release provision to be unreasonable. The Second Circuit
specifically referred to “overbroad releases that would
waive practically any possible claim against the
defendants” as contrary to the purposes of the FLSA.
Cheeks, 796 F.3d at 206 (internal quotation marks
and citation omitted); see also McCall v. Brosnan Risk
Consultants, Ltd., No. 14-CV-2520, 2016 WL 4076567, at
*2 (E.D.N.Y. Apr. 15, 2016) (holding that “an overbroad
release of claims that is not limited to matters addressed in
[the] action” is unreasonable). Such releases are
problematic because they “‘transfer to the
employee the risk of extinguishing an unknown
claim.'” McCall, 2016 WL 4076567, at *2
(quoting Camacho v. Ess-A-Bagel, Inc., No.
14-CV-2592, 2014 WL 6985633, at *4 (S.D.N.Y. Dec. 11, 2014)).
Here, the Settlement Agreement states that “Plaintiff .
. . release[s] the Defendant . . . from any and all debts,
obligations, claims, demands, orders, judgments or causes
of action of any kind whatsoever, whether in tort, contract,
statute, at common law, or on any other basis . . .
whether asserted in the Action or not . . . .”
(Settlement Agmt., Docket Entry 20-1, ¶ 3.) (emphasis
supplied).) The above-quoted language constitutes an
unreasonable and sweeping release that reaches far beyond the
claims in this action.
the Court finds the Settlement Agreement's
non-disparagement clause to be unreasonable. A
non-disparagement provision runs counter to the purpose of
the FLSA when it “‘silenc[es] the employee who
has vindicated a disputed FLSA right'” by
prohibiting him or her from discussing their litigation
experience. Panganiban v. Medex Diagnostic and Treatment
Ctr., LLC, No. 15-CV-2588, 2016 WL 927183, at
*2 (E.D.N.Y. Mar. 7, 2016) (quoting Lopez v. Nights of
Cambria, LLC, 96 F.Supp.3d 170, 179 (S.D.N.Y. 2015)).
Thus, an FLSA settlement agreement may include a
non-disparagement clause “as long as it includes
‘a carve-out for truthful statements about
plaintiffs' experience litigating their case.'”
Id. (quoting Martinez v. Gulluoglu LLC, No.
15-CV-2727, 2016 WL 206474, at *1 (S.D.N.Y. Jan. 15, 2016)).
The non-disparagement clause in the Settlement Agreement does
not include a carve-out allowing Plaintiff to speak
truthfully regarding this case. (Settlement Agmt. ¶ 4)
(“The parties have not and will not engage in any
conduct that is injurious to the reputation and interests of
the other including publicly disparaging . . . denigrating,
or criticizing Plaintiff or Defendant regarding any subject
matter, including without limitation those that are relevant
to the instant proceedings, and settlement.”).
foregoing reasons, the Court DENIES the parties' joint
request to approve the Settlement Agreement (Docket Entry
20.) The parties are directed to proceed in one of three
ways: (1) the parties may file a revised agreement with a
limited release provision and a non-disparagement clause with
the appropriate carve-out; (2) the parties may submit a joint
letter for in camera inspection that explains why
the Court should approve the Settlement Agreement, either in
its present form or with the previously noted modifications;
or (3) the parties may file a letter indicating their intent
to abandon their settlement and continue to litigate this
action. The parties must take one of the above-mentioned
actions within thirty (30) days of the date of this
Memorandum and Order. The Clerk of the Court is directed to
mail a copy of this Memorandum and Order to the pro