Jeffrey (Jeff) H. Ruzal, Member of the Firm in the Employment, Labor & Workforce Management practice, in the firm’s New York office, was quoted in Law360 Employment Authority, in “1 Way to Wrap Up Wage-Hour Suits Without Court Review,” by Jon Steingart. (Read the full version – subscription required.)
Following is an excerpt:
Litigants in wage and hour cases who wince at the Second Circuit's requirement to submit proposed settlements for court approval may want to consider another option that terminates claims and puts money in workers' pockets: an offer of judgment.
An offer of judgment is a tool available in federal district courts, where civil procedure Rule 68 explains how they work. If the plaintiff agrees to the amount the defendant offers, the rule requires the court clerk to enter judgment for the plaintiff. The court has no discretion to review the deal. …
Jeffrey Ruzal, who represents employers as a member of Epstein Becker Green, told Law360 the right way to think of Rule 68 is as a litigation device that brings claims to an end in one fell swoop. A traditional settlement, on the other hand, is more amenable to customization with carefully negotiated terms, which makes it a better option when there are unknown variables, such as the number of unpaid hours or the number of workers affected by an employer's practices.
"I think traditionally it takes the form of a take-it-or-leave-it scenario, rather than a settlement where you're resolving the dispute but where the parties disagree as to the amount that should be paid," Ruzal said. "I think it becomes much more difficult for a plaintiff's counsel to accept an offer of judgment unless it really has some mathematical precision."
In a traditional settlement, the parties can negotiate a deal that stipulates which claims the plaintiff will drop, which includes an enforceable promise not to refile them, he said. That can include a pledge to dismiss existing claims as well as a pledge not to file certain potential claims, he added.
But an offer of judgment can only release claims a plaintiff has pending, Ruzal said.
"If crafted thoughtfully, a wage and hour release in a settlement agreement can provide broader coverage to defendant employers than pursuing the end of the litigation through a Rule 68 offer of judgment," he said.
A traditional settlement or an offer of judgment could make sense for bringing litigation to an end, but the differences between the two mean they are not simply alternatives to each other, he said.
"A settlement and a Rule 68 offer of judgment are both ways to resolve a case, but I think the resolution is on very different terms," he said. "I think on balance that they're not comparable tools."