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Overtime Pay Lawsuits
Overtime Pay Lawsuits
21 Dec 2015

NEW YORK — The prevailing rule under federal law is that any settlement of cases brought under the Fair Labor Standards Act (FLSA) has to be approved by either the U.S. Department of Labor or a federal court. That rule is now being challenged in the U.S. Supreme Court by a FLSA plaintiff in a case where a federal court of appeals concluded such approval was required before private parties  can enter into a settlement agreement of a FLSA case that is not a class action suit.

Underlying Overtime Case

The employee here had filed a FLSA suit against his employer, Freeport Pancake House, for FLSA violations. He claimed that the company failed to properly pay overtime wages and retaliated against them for complaining regarding that failure. During the discovery phase of the case, the parties agreed on a private settlement to end the case and jointly filed a stipulation to dismiss the case with prejudice. However, the federal district court judge directed them to publicly file a copy of the settlement along with documents demonstrating that the agreement was fair and reasonable. The plaintiff challenged that ruling in the Second Circuit Court of Appeals.

Decision on Approval Rule During Appeal

On appeal, the plaintiff argued that they were private parties in a FLSA lawsuit that was not a class action and should be able to stipulate dismissal of the case without having to get court approval. The Second Circuit analyzed the issue and concluded that FLSA fell without those types of cases brought under federal statutes that require the approval of a federal court or the Department of Labor before parties can stipulate dismissals that settle claims with prejudice. The Department of Labor submitted a memorandum brief to the Second Circuit stating the Department’s position, which was the position adopted by the court.

When the plaintiff asked the Supreme Court to take the case, he argued that the overwhelming majority of FLSA cases have been dismissed by stipulation of the parties without court approval. If the Second Circuit’s decision is correct, then tens of thousands of FLSA cases were improperly dismissed over many decades and would create chaos in the judicial system. Additionally, courts would be burdened with thousands of extra hearings regarding settlement agreements to rule on their fairness. Ultimately, the plaintiff argues that the Second Circuit’s decision would harm plaintiffs who immediately need settlement proceeds or would have relatively small agreements wiped out by attorneys’ fees they would incur by having to get approval of their settlements.

Individuals who have claims for wage violations under FLSA should not enter into settlement agreements of their claims against their employer without the assistance of an experienced attorney. You should call (855) 754-2795 or complete the Free Unpaid Overtime Case Review form on the top right of this page if you feel that you have a valid wage claim. Our top-rated team of wage lawyers will evaluate your situation to determine your best course of action. We will also determine if it is in your best interest to file a lawsuit against your employer. There are strict time limitations for filing, so it is important that you call our experienced attorneys today.

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Overtime Pay Law's experienced and qualified legal team provides free consultation on claims and will not charge any legal fees or costs unless they're successful in winning a settlement.

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