E.D.N.Y. Judge Reverses Course: Rule 41 Stipulation of Voluntary Dismissal in FLSA Action Does Not Require Court Approval

by Sheppard Mullin Richter & Hampton LLP
Contact

On February 22, 2013, U.S. District Judge Brian Cogan reversed his prior decision that required a plaintiff to seek court approval of a settlement before her action under the Fair Labor Standards Act (“FLSA”) could be voluntarily dismissed. In Picerni v. Bilingual SEIT & Preschool, Inc., No. 12 Civ. 4938 (BMC) (E.D.N.Y. Feb. 22, 2013), plaintiff Donna Piscerni sued her employer, defendant Bilingual SEIT & Preschool, Inc., alleging that she was not paid the requisite minimum wage for her work. In October 2012, the defendant made an offer of judgment and the plaintiff accepted the offer. The offer was accepted prior to the initial case management conference with the court, and prior to the defendant filing its answer or appearance. In considering the offer of judgment, Judge Cogan initially declined to enter judgment, citing 29 U.S.C. § 216(c), which gives the Secretary of Labor the right of approval over stipulated settlements in FLSA cases. In light of Judge Cogan’s initial ruling, the plaintiff filed a motion for approval.

In this sua sponte reversal of his earlier decision, Judge Cogan found that the Federal Rules of Civil Procedure, and particularly Rule 41, allow plaintiffs to discontinue an action for any reason, so long as it is done early in the case (i.e., before the defendant answers). The longstanding practice had been for courts to require judicial approval over settlements in cases brought under the FLSA out of a concern that employers who settle without court approval run the “risk of a subsequent suit by the same employee, even if the employer receives a release as part of the settlement.” Picerni, at *3. In reaching his decision, Judge Cogan reviewed two Supreme Court cases which articulated this risk and addressed these releases—Brooklyn Savings Bank v. O’Neil, 342 U.S. 697 (1945), and D.A. Schulte, Inc. v. Gangi, 328 U.S. 108 (1946). Both of these cases found that the respective releases were unenforceable absent a showing that a “bona fide dispute as to the number of hours worked or computation of the employees’ pay” had been determined by the lower courts. Id. at *4-5.

In bucking this long-standing practice, Judge Cogan noted that, “[a]lthough I have ruled to the contrary in the past, I have come around to the view that the procedure of a court requiring approval before it permits parties to voluntarily dismiss an FLSA action is incorrect.” Id. at *8. As such, Judge Cogan held that the dismissal was valid because actions under the FLSA are not statutorily exempt from Rule 41, and a plaintiff’s right to voluntarily dismiss an action should be honored.

Judge Cogan, however, did acknowledge the risk that remains to the defendant employer because there was no determination by a court of a bona fide dispute as to the wages owed to the plaintiff, thus leaving the door open to a later suit by the plaintiff.

In light of Judge Cogan’s decision, the option of making an early offer of judgment, and having the case dismissed without court approval remains a viable one that employers may wish to explore in certain cases, with the understanding that certain risks do exist.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Sheppard Mullin Richter & Hampton LLP | Attorney Advertising

Written by:

Sheppard Mullin Richter & Hampton LLP
Contact
more
less

Sheppard Mullin Richter & Hampton LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.
Feedback? Tell us what you think of the new jdsupra.com!