Proposed Settlement of Taco Bell's Wage Suit Rejected By Court

Proposed Settlement of Taco Bell’s Wage Suit Rejected By Court

ORLANDO — Florida Federal Magistrate Judge David A. Baker recommended the rejection of a proposed settlement agreement of a wage suit between a Taco Bell franchisee and an employee because the parties failed to provide them with the actual agreement and its terms. According to the judge, the court has no ability to approve an agreement about which it has no information whatsoever, because it can not exercise jurisdiction if it is not in the record. The parties apparently filed a motion requesting that the court approve the proposed settlement agreement but did not attach the agreement. Instead they stated that they could email the agreement to the court for review, if requested.

Overtime and Recordkeeping Allegations

The wage suit was initially filed by a Taco Bell employee, alleging that the franchisee that he worked for, Florida-based Bravo Foods LLC, failed to pay him overtime in violation of the Fair Labor Standards Act (FLSA). The employee claimed that, even though he was hired as a non-exempt employee, Bravo modified its time records and deleted some or all of his overtime hours worked to avoid paying him what he was due. The parties then entered into arbitration to address the claims and reached a proposed settlement agreement.

Court or DOL Approval of Settlement Agreements

The parties in this case attempted to gain court approval of a proposed settlement. However, the federal court refused to approve the settlement because the plaintiffs the parties failed to provide it with the terms of the agreement. Under FLSA, parties cannot enter into private settlements of FLSA claims without  the approval of either a federal district court or the U.S. Department of Labor. Federal courts apply an extra level of scrutiny to FLSA settlements to prevent workers from waiving the protections of FLSA. In order to ensure workers maintain their rights under the FLSA, courts will only enforce these settlements if the settlement amount is for the full amount claimed, or if less, there is a bona fide dispute between the parties regarding the actual amount owed by the employer. Courts or DOL will scrutinize settlements to ensure that they achieve the goal of preventing employers from deriving a competitive advantage by violating FLSA.

Settlements of FLSA claims should be a good faith agreement to fairly and fully compensate employees whose wage rights have been violated. A proposed settlement agreement that does not fully compensate employees should be challenged. 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 your employee wage rights have been violated and your employer’s proposed settlement of your claims does not adequately compensate you. Additionally, you should contact us if your company proposes to settle your case since any settlement must be approved by a court or by the Department of Labor. Our top-rated team of wage lawyers will evaluate your situation to determine your best course of action.

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