Perossio v. Pure Growth Consulting, LLC, 1:18-cv-01946-BCM

Plaintiff Francisco Pablo Perossio and defendants (including Pure Growth Consulting, LLC) reached a settlement that resolves FLSA wage-and-hour claims.
The parties consented to Magistrate Judge Barbara Moses’s authority under 28 U.S.C. § 636(c) for all remaining proceedings.
The Court vacated existing deadlines and ordered the parties, by December 21, 2022, to submit: (a) a joint letter showing the settlement is fair and reasonable under Wolinsky; (b) the fully executed written settlement agreement for the public docket; and (c) counsel’s contingency fee agreement (if any) and supporting time and expense records to support any fee award.
The Order cautioned that confidentiality and non-disparagement clauses that prevent truthful statements about employment, the suit, or the settlement are generally disfavored in FLSA resolutions.
The Court warned that one-way or overbroad general releases in FLSA settlements are ordinarily unacceptable.
The Court emphasized that it will review the reasonableness of attorneys’ fees and costs; any fee award must be memorialized in a personally signed settlement agreement and supported by authenticated fee agreements and time/expense records, with a detailed explanation of the basis for the award (degree of success is the critical factor).

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the FLSA settlement is fair and reasonable under Wolinsky factors	Settlement should be approved as fair and reasonable	Settlement should be approved; parties ask court to approve	Parties must submit joint letter and supporting materials; court will assess fairness under Wolinsky
Whether confidentiality/non-disparagement terms are permissible	Plaintiff may accept confidentiality/non-disparagement but subject to carve-outs for truthful statements	Defendants may seek confidentiality/non-disparagement	Court cautions such clauses are rarely appropriate; non-disparagement must carve out truthful statements about employment, litigation, and settlement
Whether a one-way or overbroad general release is acceptable	Plaintiff may be asked to sign broad release as part of settlement	Defendants may seek broad or one-way releases	Court warns district courts ordinarily refuse to approve one-way/overbroad releases in FLSA settlements
Adequacy and documentation of attorneys’ fees and costs	Plaintiff’s counsel will seek fees/costs; must justify award and show contingency agreement/time records	Defendants may agree to fees as part of settlement but must include documentation	Court requires fee award be memorialized in a personally signed agreement and supported by authenticated contingency fee agreement and time/expense records; degree of success is primary factor

Wolinsky v. Scholastic Inc., 900 F. Supp. 2d 332 (S.D.N.Y. 2012) (factors for evaluating fairness of FLSA settlements)
Fisher v. SD Protection, Inc., 948 F.3d 593 (2d Cir. 2020) (district court must review reasonableness of attorneys’ fees in FLSA settlement; requirements for documentation and explanation)
Farrar v. Hobby, 506 U.S. 103 (U.S. 1992) (degree of success is critical in determining reasonableness of fee awards)