To Seek Or Not To Seek (Court Approval)? THAT Is The Question

Unlike most other causes of action, FLSA claims require court or agency approval before a release can be deemed fully valid and enforceable.  Are there scenarios where it makes sense for employers to “roll the dice” and settle a pending litigation without asking the court to bless the terms of the deal?

The question, which rarely bedeviled litigators when FLSA claims were more of a rarity than they are today, now has enormous practical significance given how many wage-hour lawsuits are filed and the very real prospect that settling one case can lead to a multitude of “copycat” claims.  Outside the FLSA setting, of course, this is a non-issue; parties file a bare-bones Stipulation of Dismissal with the court stating that the claims are dismissed with prejudice, the settlement agreement remains fully confidential, and everyone (including the judge) goes on to the next case.  The defendant need not lose a moment’s sleep worrying that, if the same plaintiff returns with the same claim, the release will be held unenforceable simply because the court never approved its terms.

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