Based largely on an interpretation of the law issued by a federal appeals court 40 years ago, the U.S. Department of Labor (DOL) takes the position that to be enforceable, private parties cannot settle claims of alleged violations under the Fair Labor Standards Act (FLSA) absent approval either by the agency or by a federal court.
But must an FLSA settlement be approved either by DOL or by a court to be enforceable? Notably, there is nothing in the text of the FLSA itself that prevents employers and employees from settling claims outside of a supervised settlement process. Along those lines, we recently became aware of two federal trial court rulings where the court opted to address the issue directly, concluding in each case that there is nothing special about the FLSA that prevents private settlements without supervision.
While these are only district court opinions, and are subject to further review, they may signal the beginning of the end of the doctrine that approval by DOL or a court is required to settle an FLSA case.
Members of the Center for Workplace Compliance (CWC) can read more here.