District Court Turns the Other “Cheeks” on Parties’ Proposed Stipulation of Dismissal

Settling FLSA cases in the Second Circuit is becoming more and more difficult. In Cheeks v. Freeport Pancake House, the Second Circuit held that judicial or DOL approval is required for a valid dismissal of FLSA claims with prejudice. Cheeks is a controversial decision. The majority of courts have held that releases of FLSA rights have to be approved by a court or the DOL in order for the release to be valid, which often means that parties have to file otherwise confidential settlement agreements in publicly-available electronic court filing systems. A number of employer and plaintiffs’ counsel in many circuits have managed to settle FLSA cases like they settle other cases—that is, without filing settlement agreements publicly—by agreeing to dismissal with prejudice, which results in later-filed claims being subject to dismissal by claim preclusion principles even if not by a release. Cheeks limited that practice in the Second Circuit.

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