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 “2nd Circ. Remand Gives Lesson for Closing Wage Claims,” by Jon Steingart. (Read the full version – subscription required.)

Following is an excerpt:

Litigants with state and federal claims should resolve them all in a trial court before filing an appeal, so they can avoid a fiasco like when the Second Circuit said it couldn't decide what to make of a $5 million trial win for workers, attorneys told Law360.

The court on March 5 said it didn't have enough information to resolve a restaurant group's appeal of a jury's finding that it didn't follow the New York Labor Law rules for paying tipped workers. The employees, who worked at two Valbella restaurants in Manhattan, also brought claims under the federal Fair Labor Standards Act, but both sides agreed to shelve them based on the judge's suggestion.

The problem with that approach is that obtaining a jury verdict on the state law claims left the FLSA claims unresolved, the Second Circuit said. …

Jeffrey Ruzal, who represents hospitality employers as a member of Epstein Becker Green, told Law360 he's puzzled by the choice to hold a trial on just the state law claims.

"If you have any and all live claims that are going to a jury, it should probably go without saying that you try all of them, even if they are overlapping," he said. "It takes greater care to ensure that the jury appreciates any similarities and potential distinctions between and among the various statutes at issue." …

Ruzal said efficiency in litigation is indispensable and he appreciates that Judge Woods appeared to want to keep things running smoothly.

But FLSA claims, unlike claims under other laws, require careful attention to how they're disposed because the Second Circuit takes a strict view that judicial approval is necessary before letting plaintiffs dismiss or settle their claims, he said. Circuit precedent calls on district courts to ensure that workers aren't coaxed into releasing claims for a fraction of their value, he said.

"There's a lot of constraints to how courts in the Second Circuit especially treat FLSA claims via resolution by voluntary resolution of the parties, through settlement and also through voluntary dismissal," he said. "Short of that thorough oversight, you can't simply just make the FLSA claims go away and that's what effectively happened here."


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