Yang v. Matsuya Quality Japanese Inc. et al

Filing 21

MEMORANDUM AND ORDER - For the 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 set forth herein. 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 se Defendant. So Ordered by Judge Joanna Seybert on 2/2/2017. C/ECF; C/M (Valle, Christine)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
---------------------------------------X
QITING YANG, on behalf of herself and
all other persons similarly situated,
Plaintiff,
MEMORANDUM & ORDER
15-CV-1949(JS)(ARL)

-againstMATSUYA QUALITY JAPANESE INC., d/b/a
MATSUYA QUALITY JAPANESE EATS,
BERNARD BENLEVI, and LONGLIN LI,

Defendants.
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APPEARANCES
For Plaintiff:
Ruchama Leah Cohen, Esq.
Michael Samuel, Esq.
Samuel & Stein
38 W. 32nd St., Suite 1110
New York, NY 10001
For Defendant
Benlevi:

For remaining
Defendants:

Bernard Benlevi, pro se
70 Fir Drive
Roslyn, NY 11576
No appearances

SEYBERT, District Judge:
Currently 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.
The 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.
2016.)

(Elec. Order, Jan. 19,

On September 15, 2016, the parties filed the revised

Settlement Agreement for the Court’s review.

(Settlement Agree.,

Docket Entries 20-1 & 20-2.))
Settlements 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).
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Additionally, 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

provisions

employees.”

include

provisions,”

(2)

(1)

Cheeks,
“highly

“overbroad

796

F.3d

at

restrictive

release[s]

207.

Such

confidentiality

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

documentation.”

attorney

. . .

without

adequate

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).
First,

the

Court

continues

to

find

the

Agreement’s release provision to be unreasonable.

Settlement
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”
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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.
Second, the Court finds the Settlement Agreement’s nondisparagement
provision

runs

clause

to

counter

be
to

unreasonable.
the

purpose

of

A

non-disparagement
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
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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.1

(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.”).
CONCLUSION
For the 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

The Court acknowledges that the parties’ prior agreement
contained an identical non-disparagement clause. However, the
Court’s analysis on this issue is largely informed by this
District’s subsequent decision in Panganiban v. Medex Diagnostic
and Treatment Center, LLC, No. 15-CV-2588, 2016 WL 927183, at *2
(E.D.N.Y. Mar. 7, 2016).
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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 se Defendant.

SO ORDERED.
/s/ JOANNA SEYBERT______
Joanna Seybert, U.S.D.J.
Dated: February
2 , 2017
Central Islip, New York

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