Mei Xing Yu v. Hasaki Restaurant, Inc.
944 F.3d 395
| 2d Cir. | 2019Background
- Mei Xing Yu sued Hasaki Restaurant under the FLSA for unpaid overtime (collective/individual claims).
- Hasaki served a Federal Rule of Civil Procedure 68(a) offer of judgment for $20,000 plus reasonable attorneys’ fees; Yu accepted and filed the offer and acceptance with the district court.
- The district court (Furman, J.) sua sponte ordered the parties to submit the settlement for a court fairness review, relying on Cheeks v. Freeport Pancake House and reasoning that FLSA settlements require court or DOL approval.
- The district court certified the question for interlocutory appeal under 28 U.S.C. § 1292(b); the Second Circuit heard briefing (including amicus briefs from Public Citizen and the Secretary of Labor).
- The Second Circuit majority held that judicial approval is not required to enter a Rule 68(a) offer-of-judgment resolving FLSA claims and reversed the district court; Judge Calabresi dissented.
Issues
| Issue | Plaintiff's Argument (Yu) | Defendant's Argument (Hasaki) | Held |
|---|---|---|---|
| Whether a Rule 68(a) offer of judgment resolving FLSA claims requires court or DOL approval before the clerk enters judgment | Yu argued judicial approval is not required; Rule 68(a)’s mandatory command to the clerk controls | Hasaki argued Rule 68(a) judgments need not be approved (aligned with Yu) | Court held judicial approval is NOT required for Rule 68(a) FLSA settlements; clerk must enter judgment once offer accepted and filed |
| Whether Cheeks (requiring approval for Rule 41 stipulated dismissals) controls Rule 68 offers | Yu: Cheeks limited to Rule 41(a)(1)(A)(ii) and does not extend to Rule 68(a) | Dissent/Amici: Cheeks’ reasoning supports extending approval requirement to Rule 68 | Court held Cheeks is not controlling for Rule 68(a) and declined to extend it |
| Whether Supreme Court precedents and FLSA statutory history imply a judicial-approval requirement | Yu: Supreme Court cases address private waivers but do not clearly require court approval of Rule 68 stipulated judgments; §216(c) authorizes DOL supervision but does not exclude judicially filed settlements | Dissent/Amici: Brooklyn Savings, Gangi, and the 1949 amendment show Congress intended only court- or DOL-supervised settlements | Court held those precedents do not supply the “necessary clear expression of congressional intent” to exempt FLSA claims from Rule 68(a)’s operation |
| Whether Rule 68(a)’s mandatory entry is subject to exceptions (e.g., illegal settlements, class/bankruptcy rules) that would require judicial review in FLSA cases | Yu: Rule 68 is generally ministerial; some limited exceptions exist but FLSA does not fit them | Dissent/Amici: FLSA’s protective design and §216(c) make Rule 68 inappropriate without oversight | Court acknowledged other statutory exceptions exist but concluded FLSA is not one of them for Rule 68(a) offers |
Key Cases Cited
- Cheeks v. Freeport Pancake House, Inc., 796 F.3d 199 (2d Cir. 2015) (held Rule 41 stipulated dismissals settling FLSA claims with prejudice require court or DOL approval)
- Brooklyn Sav. Bank v. O’Neil, 324 U.S. 697 (1945) (private waivers of FLSA liquidated damages void as contrary to public policy)
- D.A. Schulte, Inc. v. Gangi, 328 U.S. 108 (1946) (private compromises of certain FLSA claims invalid; suggested court-supervised stipulated judgments may differ)
- North Shore Corp. v. Barnett, 323 U.S. 679 (1944) (example of stipulated judgment subjected to judicial scrutiny)
- Marek v. Chesny, 473 U.S. 1 (1985) (requires clear congressional intent to exempt a statute from operation of a Federal Rule like Rule 68)
- Lynn’s Food Stores, Inc. v. U.S. Dep’t of Labor, 679 F.2d 1350 (11th Cir. 1982) (articulated that FLSA settlements generally require court or DOL approval)