796 F.3d 199 (2nd Cir. 2015), 14-299-cv, Cheeks v. Freeport Pancake House, Inc.

Docket Nº:14-299-cv
Citation:796 F.3d 199
Opinion Judge:POOLER, Circuit Judge:
Party Name:DORIAN CHEEKS, Plaintiff-Appellant, v. FREEPORT PANCAKE HOUSE, INC., W.P.S. INDUSTRIES, INC., Defendants-Appellees
Attorney:ABDUL HASSAN, Queens Village, NY, for Plaintiff-Appellant Dorian Cheeks. JEFFREY MEYER, Kaufman, Dolowich & Voluck, LLP (Keith Gutstein, on the brief),Woodbury, NY, for Defendants-Appellees Freeport Pancake House, Inc. and W.P.S. Industries, Inc. Laura Moskowitz, Senior Attorney, U.S. Department ...
Judge Panel:Before: POOLER, PARKER and WESLEY, Circuit Judges.
Case Date:August 07, 2015
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit
 
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Page 199

796 F.3d 199 (2nd Cir. 2015)

DORIAN CHEEKS, Plaintiff-Appellant,

v.

FREEPORT PANCAKE HOUSE, INC., W.P.S. INDUSTRIES, INC., Defendants-Appellees

No. 14-299-cv

United States Court of Appeals, Second Circuit

August 7, 2015

Argued: November 14, 2014.

Dorian Cheeks appeals, pursuant to 28 U.S.C. § 1292(b), from the refusal of the United States District Court for the Eastern District of New York (Joanna Seybert, J.) to enter the parties' stipulation of settlement dismissing, with prejudice, Cheeks' claims under the Fair Labor Standards Act (" FLSA" ) and New York Labor Law. We agree that absent such approval, plaintiffs cannot settle their FLSA claims through a private stipulated dismissal with prejudice pursuant to Federal Rule of Civil Procedure 41(a)(1)(A)(ii) . We thus affirm, and remand for further proceedings consistent with this opinion.

ABDUL HASSAN, Queens Village, NY, for Plaintiff-Appellant Dorian Cheeks.

JEFFREY MEYER, Kaufman, Dolowich & Voluck, LLP (Keith Gutstein, on the brief),Woodbury, NY, for Defendants-Appellees Freeport Pancake House, Inc. and W.P.S. Industries, Inc.

Laura Moskowitz, Senior Attorney, U.S. Department of Labor, Office of the Solicitor, (M. Patricia Smith, Solicitor of Labor, Jennifer S. Brand, Associate Solicitor, Paul L. Frieden, Counsel for Appellate Litigation, on the brief), Washington, D.C., for Amicus Curiae U.S. Department of Labor.

Before: POOLER, PARKER and WESLEY, Circuit Judges.

OPINION

POOLER, Circuit Judge :

Dorian Cheeks appeals, pursuant to 28 U.S.C. § 1292(b), from the refusal of the United States District Court for the Eastern District of New York (Joanna Seybert, J. ) to enter the parties' stipulation of settlement dismissing, with prejudice, Cheeks' claims under the Fair Labor Standards Act (" FLSA" ) and New York Labor Law. The district court held that parties cannot enter into private settlements of FLSA claims without either the approval of the district court or the Department of Labor (" DOL" ). We agree that absent such approval, parties cannot settle their FLSA claims through a private stipulated dismissal with prejudice pursuant to Federal Rule of Civil Procedure 41(a)(1)(A)(ii). We thus affirm, and remand for further proceedings consistent with this opinion.

BACKGROUND

Cheeks worked at both Freeport Pancake House, Inc. and W.P.S. Industries, Inc. (together, " Freeport Pancake House" ) as a restaurant server and manager over the course of several years. In August 2012, Cheeks sued Freeport Pancake House seeking to recover overtime wages, liquidated damages and attorneys' fees under both the FLSA and New York Labor Law. Cheeks also alleged he was demoted, and ultimately fired, for complaining about Freeport Pancake House's failure to pay him and other employees the required overtime wage. Cheeks sought back pay, front pay in lieu of reinstatement, and damages for the unlawful retaliation. Freeport Pancake House denied Cheeks' allegations.

After appearing at an initial conference with the district court, and engaging in a period of discovery, the parties agreed on a private settlement of Cheeks' action. The parties then filed a joint stipulation and order of dismissal with prejudice pursuant to Rule 41(a)(1)(A)(ii). Cheeks v. Freeport Pancake House, Inc., No. 2:12-cv-04199 (E.D.N.Y. Dec. 27, 2013) ECF No. 15. The district court declined to accept the stipulation as submitted, concluding that Cheeks could not agree to a private settlement of his FLSA claims without either the approval of the district court or the supervision of the DOL. The district court directed the parties to " file a copy of the settlement agreement on the public docket," and to " show cause why the proposed settlement reflects a reasonable compromise of disputed issues rather than a mere waiver of statutory rights brought about by an employer's overreaching." App'x at 35 (internal quotation marks omitted). The district court further ordered the parties to " show cause by providing the Court with additional information in the form of affidavits or other documentary evidence explaining why the proposed settlement is fair and reasonable." App'x at 35.

Rather than disclose the terms of their settlement, the parties instead asked the district court to stay further proceedings and to certify, pursuant to 28 U.S.C. § 1292(b), the question of whether FLSA actions are an exception to Rule 41(a)(1)(A)(ii)'s general rule that parties may stipulate to the dismissal of an action without the involvement of the court. On February 20, 2014, the district court entered an order staying the case and certifying the question for interlocutory appeal. Our Court granted the motion. Cheeks v. Freeport Pancake House, Inc., 14-299-cv (2d Cir. May 7, 2014), ECF No. 44. Our Court heard oral argument on November 14, 2014. As both parties advocated in favor of reversal, following oral argument we solicited the views of the DOL on the issues raised in this matter. The DOL submitted a letter brief on March 27, 2015, taking the position that the FLSA falls within the " applicable federal statute" exception to Rule 41(a)(1)(A), such that the parties may not stipulate to the dismissal of FLSA claims with prejudice without the involvement of a court or the DOL." Cheeks submitted supplemental briefing in response to the DOL's submission on April 20, 2015, and we find no need for additional oral argument.

DISCUSSION

The current appeal raises the issue of determining whether parties may settle FLSA claims with prejudice, without court approval or DOL supervision1, under Federal Rule of Civil Procedure 41(a)(1)(A)(ii). The question of whether judicial approval of, and public access to, FLSA settlements is required is an open one in our Circuit.2 We review this question of law de novo. See Cmty. Health Care Ass'n of N.Y. v. Shah, 770 F.3d 129, 150 (2d Cir. 2014).

Rule 41(a)(1)(A) provides in relevant part that:

Subject to Rules 23(e), 23.1(c), 23.2, and 66 and any applicable federal statute, the plaintiff may dismiss an action without a court order by filing:

(i) a notice of dismissal before the opposing party serves either an answer or a motion for summary judgment; or (ii) a stipulation of dismissal signed by all parties who have appeared.

Fed. R. Civ. P. 41(a)(1)(A).

The FLSA is silent as to Rule 41. We must determine, then, if...

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