In Chandler v. Total Relocation Services, LLC, the Court approved a settlement between moving company and its mover/driver plaintiffs who alleged claims for unpaid wages under the FLSA and New York Labor Law. See No. 15-CIV-6791 (HBP) (S.D.N.Y. Aug. 2, 2017). The settlement was reached prior to conditional certification, and thus consisted only of the seven Named Plaintiffs.
The Court began with the general principle that it should approve the settlement if it “reflects a reasonable compromise over contested issues.” The Court then cited the oft-cited factors announced in Wolinsky v. Scholastic, Inc., 900 F. Supp. 2d 332 (S.D.N.Y. 2012), which direct courts to consider: (i) the plaintiff’s range of possible recovery; (ii) the extent to which the settlement will enable the parties to avoid burden and expense; (iii) the seriousness of the litigation risks faced by the parties; (iv) whether the settlement was the product of arm’s-length bargaining; and (v) the possibility of fraud or collusion. The Court found all factors met including, notably, the first despite the net settlement amounting to just 54% of Plaintiffs’ claimed damages.
The Court also raised two additional points, which should employers should be mindful of when drafting settlement agreements in the FLSA context. First, the Court commented favorably upon the scope of the release, insofar as it extended only to “conduct set forth in the Lawsuit,” and was thus not impermissible broad. Second, the Court held that the mutual non-disparagement clause included a carve-out “for truthful statements about plaintiffs’ experience litigating their case.”