TERENCE POLETTI v. PEPSI COLA BOTTLING COMPANY OF NEW YORK INC (2024)

REPORT & RECOMMENDATION

This is a wage-and-hour case in which Plaintiffs, current or former distributors of Defendant Pepsi-Cola Bottling Company of New York (“Pepsi”), claim that Pepsi misclassified them as independent contracts rather than employees. One of the Plaintiffs was named George Murn. On November 12, 2024, the Court granted the motion of Natalie Blue Murn, as Administrator CTA of the Estate of George Murn, to substitute for as Plaintiff for George Murn. (Dkt. 128.)

At the same time she moved for substitution, Ms. Murn also moved to voluntarily withdraw her claim without prejudice pursuant to Federal Rule of Civil Procedure 41(a)(1)(A)(i). That rule allows a plaintiff to voluntarily dismiss an action without a court order by filing a notice of dismissal before the opposing party serves an answer or motion for summary judgment. Id. As no answer or summary judgment has yet been filed, voluntary dismissal is appropriate under the rule.

However, because the instant action asserts claims under the Federal Labor Standards Act (“FLSA”), there is an additional consideration. In the Second Circuit, FLSA settlement require court review and approval in order to ensure that the settlement agreement is fair and reasonable. Cheeks v. Freeport Pancake House, Inc., 796 F.3d 199, 206 (2d Cir. 2015). Review and approval are required regardless of whether the dismissal is with or without prejudice. Samake v. Thunder Lube, Inc., 24 F.4th 804, 810 (2d Cir. 2022).

No such review and approval are required, however, where the court obtains “confirmation that no settlement exist[s].” Id. at 811. In that circumstance, “the unique considerations underlying Cheeks do not apply, and no further judicial review of the plaintiff's voluntary dismissal is required.” Kaloshi v. West Village Oasis, Inc., No. 22-CV-4593, 2023 WL 3945554, at *2 (S.D.N.Y. June 12, 2023) (citing Samake, 24 F. 4th at 11).

Here, there is no settlement agreement and none is contemplated. (See Declaration of Daniel Gobetz, dated Nov. 11, 2024, Dkt. 121-1, ¶¶ 16-19.) Rather, the reason Ms. Murn wishes to withdraw the Estate's claim is so that she will be free to negotiate with Pepsi for sale of the distributorship. (Id. ¶¶ 13-14.) No party opposed the motion. The Court held a hearing on December 18, 2024, during which it confirmed through Ms. Murn's counsel that Ms. Murn wishes to withdraw her claims without prejudice; that her decision is voluntary and made of her own free will and without any coercion; that negotiation and sale of the distributorship is in her best interest; and that her dismissing the action without prejudice as a condition to negotiating potential entry into an agreement to sell her distributorship is not an attempt by Defendants to enter into a settlement agreement and evade review as required under Cheeks.

The Court understands that in the event Ms. Murn and Pepsi were to enter into an agreement to sell the distributorship, the agreement would include a general release of all claims by Ms. Murn. (Gobetz Decl. ¶18.) Such a release apparently is a standard provision of a Pepsi Bottling distributorship purchase agreement, and would not be given in connection with a settlement agreement. (Id.) And, in the event Ms. Murn does not enter into an agreement to sell her distributorship to Pepsi, she will be free to reinstate her claims as dismissal will be without prejudice.

Accordingly, I recommend that Ms. Murn's voluntary dismissal of her claims without prejudice be So-Ordered.

Deadline For Filing Objections And Preserving Appeal

Pursuant to 28 U.S.C. § 636(b)(1) and Rules 72, 6(a), and 6(d) of the Federal Rules of Civil Procedure, the parties shall have fourteen (14) days to file written objections to this Report and Recommendation. Any party shall have fourteen (14) days to file a written response to the other party's objections. Any such objections and responses shall be filed with the Clerk of the Court, with courtesy copies delivered to the Chambers of the Honorable Vernon S. Broderick, United States Courthouse, 40 Foley Square, New York, New York 10007, and to the Chambers of the undersigned, at United States Courthouse, 500 Pearl Street, New York, New York 10007. Any request for an extension of time for filing objections must be addressed to Judge Broderick. Failure to file timely objections will result in a waiver of the right to object and will preclude appellate review.

ROBERT W. LEHRBURGER UNITED STATES MAGISTRATE JUDGE