FLSA Settlements Face Challenges In NY After Cheeks Ruling

By Alex Umansky and Jeffrey Rosenberg (August 3, 2018, 11:27 AM EDT) -- Cheeks v. Freeport Pancake House Inc.[1] was a case that completely changed the way in which two parties can settle a claim pursuant to the Fair Labor Standards Act. Cheeks arose after an individual plaintiff settled an FLSA wage claim with defendants and filed a stipulation seeking to dismiss all claims with prejudice under Rule 41(a) of the Federal Rules of Civil Procedure. While this used to be standard procedure in FLSA cases, the district court rejected the dismissal and instead found that all FLSA settlements now had to be reviewed and approved by the court. The plaintiff appealed, and the Second Circuit affirmed, also finding that the FLSA mandated the court's review of all FLSA settlements to be enforceable. More specifically, in Cheeks, the Second Circuit held that where a plaintiff had already filed a lawsuit under the FLSA, the plaintiff could not privately agree to release his or her FLSA claims and stipulate to their dismissal with prejudice under FRCP 41(a). The Second Circuit found that stipulated dismissals settling FLSA claims with prejudice "require approval of the district court or the [Department of Labor] to take effect."...

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