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Total Articles: 9

It’s PAID: DOL to Supervise Settlements Again in Cases Voluntarily Disclosed by Employers

On March 6, 2018, the U.S. Department of Labor’s (DOL) Wage and Hour Division (WHD) announced a new nationwide program to resolve minimum wage and overtime violations under the Fair Labor Standards Act (FLSA). Referred to as the Payroll Audit Independent Determination (PAID) program, it is expected to be a six-month pilot initiative that allows employers to conduct self-audits of their payroll practices and voluntarily report underpayments to the DOL/WHD which, in turn, will supervise the back wage payments.

Second Circuit to Decide Whether Court Approval of FLSA Settlements Applies to Accepted Offers of Judgment

Seeking to resolve a split among the district courts in the Second Circuit, the Court of Appeals has accepted an interlocutory appeal to decide whether, in resolving cases involving FLSA claims, offers of judgment under Rule 68 require DOL or judicial scrutiny and approval. Yu v. Hasaki Restaurant, Inc., 2017 U.S. App. LEXIS 20698 (2nd Cir. Oct. 23, 2017).

Second Circuit Holds that Parties May Not Stipulate to Dismiss With Prejudice FLSA Actions Without Court Approval

A recent decision by the Second Circuit will likely make it more difficult for parties to enter into private Fair Labor Standards Act (FLSA) settlements in cases pending not only in the Second Circuit, but nationwide. On August 7, 2015, in Cheeks v. Freeport Pancake House, Inc., No. 14-299, the Second Circuit held that parties may not stipulate to dismiss an FLSA action with prejudice, pursuant to Federal Rule of Civil Procedure 41(a)(1)(A), without court approval, "even if the parties want to take their chances that their settlement will not be" enforced in future litigation.

Second Circuit Affirms “Supervision” Doctrine Vis a Vis FLSA Settlements

Bringing some degree of clarity to the murky question of whether parties can dismiss a pending FLSA lawsuit on their own volition, the Court of Appeals for the Second Circuit has ruled that any dismissal with prejudice requires “the approval of the district court or the DOL to take effect.” Cheeks v. Freeport Pancake House, 2015 U.S. App. LEXIS 13815 (2d Cir. Aug. 7, 2015).

Fifth Circuit Finds Settlement Agreement Did Not Release Employees’ FLSA Claims

In Bodle v. TXL Mortgage Corp., No. 14-20224 (June 1, 2015), the Fifth Circuit Court of Appeals held that a generic, broad-form settlement release between an employer and two of its former employees did not bar those employees’ subsequent lawsuit under the Fair Labor Standards Act (FLSA) for alleged overtime violations.

Former Employee Successfully Disavows FLSA Settlement

The Eleventh Circuit U.S. Court of Appeals (with jurisdiction over Alabama, Florida, and Georgia) recently expanded the court's 1982 ruling in Lynn's Food Stores, Inc. v. U.S. limiting the settlement of claims under the federal Fair Labor Standards Act. Lynn's Foods said that such settlements between an employer and its current employees are permitted only (i) under the U.S. Labor Department's supervision, or (2) where a court has scrutinized the settlement for fairness and has entered a "stipulated judgment."

Cracking the Door? The Eleventh Circuit Again Considers When Out-of-Court FLSA Settlements Are Enforceable

n 1982, the Eleventh Circuit Court of Appeals held in Lynn’s Food Stores, Inc. v. United States that employers and employees cannot settle claims under the Fair Labor Standards Act (FLSA) unless (1) the settlement is supervised by the U.S. Secretary of Labor, or (2) a court enters a stipulated judgment after “scrutinizing the settlement for fairness.” Since then, most federal district courts (not just those in the Eleventh Circuit) have followed this ruling, routinely holding that out-of-court settlement agreements, to the extent that they purport to waive FLSA claims, are per se unenforceable.

Appellate Court Enforces Private FLSA Settlement

The longstanding general view has been that wage claims under the federal Fair Labor Standards Act may be reliably settled only....

Fifth Circuit Holds that Approval Not Required by Court or Department of Labor for FLSA Settlement

In Martin v. Spring Break ’83 Productions, LLC, No. 11-30671 (5th Cir. July 24, 2012), the Fifth Circuit Court of Appeals, addressing an issue of first impression, held that a union-negotiated settlement precluded plaintiffs, union members, from pursuing their claims under the Fair Labor Standards Act (“FLSA”) for unpaid wages, even though the settlement was never approved by the court or the Department of Labor (“DOL”). The ruling contravenes a long-standing Eleventh Circuit decision, Lynn’s Food Stores, Inc. v. United States, which had held that FLSA claims may not be settled without approval of the court or the DOL. The Fifth Circuit declined to read Lynn’s Food Stores to require approval from a court or the DOL in all instances, finding that settlement and waiver of FLSA claims may be effectuated without oversight in certain circumstances, such as those presented in Martin.
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