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

Article by Sean Kirby and Rachel Tischler*

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...