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Can I Unilaterally Settle My Wage And Hour Claim?

by | Aug 31, 2022 | Employment Discrimination, Employment Law, Wage: Minimum Wage, Wage: Overtime, Wage: Tipped Employees |

Labor and employment law is a broad, and complicated beast. It encompasses a myriad of claims including Workers’ Compensation retaliation and interference, discrimination, retaliation, FMLA violations, and wage and hour violations. One thing all of these claims have in common is they all tend to settle at some point in the case’s lifespan, before going to trial.

Settling a case, while difficult in practice, is straight forward on paper. You determine the value of the claims and negotiate with the former employer to come to a deal where they pay for the harm that they caused in exchange for dropping your claims against them for good. It’s a great way to resolve your claims without going through the long and grueling court process. However, with wage and hour claims, brought under the federal Fair Labor Standards Act (“FLSA”), there’s a catch.

When Congress passed the FLSA in 1938, they established the first federal minimum wage requirement in the United States. Additionally, the FLSA requires employers to pay non-exempt employees time and a half for hours worked beyond 40 hours in a given work week. (Best Law Read: Is My Manager Personally Liable For Overtime Violations?; What Can I Do If I’m Not Paid For All My Hours?). It is also important to note that the FLSA protects employees from retaliation by their employers after reporting wage theft or other FLSA violations. (Best Law Read: What Happens If My Job Retaliates Against Me For My Reporting Wage Violations?).

Congress passed the FLSA to establish the “minimum standard of living necessary for health, efficiency, and general well-being of workers.” To protect this minimum standard, Congress included a provision that requires settlements of FLSA claims to be approved by the courts. As the United States Supreme Court put it, allowing settlements that are below minimum wage would permit an employer to evade the FLSA and gain an unfair competitive advantage. Brooklyn Savings Bank, 324 U.S. 697 (1945).  (Best Law Read: No Wage Violation Is Too Small To Pursue).

It’s been almost 85 years and the prohibition on FLSA settlements without court permission still holds. Recently, the federal court for the Western District of North Carolina issued a decision prohibiting an offer of judgment to be filed in a case involving an FLSA claim.  An offer of judgment is similar to a settlement. In Cavanaugh v. TMC Restaurant of Charlotte, the employee asserted an overtime violation, but the opinion did not get into the specifics of the particular wage theft issue. Given that the alleged damages were not too high, the employer offered to allow a judgment of $6,000 against them, the employer, to resolve all pending claims. The employee accepted their offer, and the offer and acceptance were filed with the court. Under the rules governing civil courts, this would normally be the end of the case. But here, the employee’s claims included an FLSA claim.

Because the offer of judgment was offered “in full satisfaction of all claims for relief”, and one of the employee’s claims for relief was a violation of the FLSA, the court held that court approval is necessary for the offer of judgment. And because the court had not approved the offer of judgment, it could not be accepted as the final judgment.

In their decision, the court went on to reject the offer of judgment as the case had not progressed enough for the employee to reasonably ascertain the strengths, weaknesses, and potential value of their claims.

If you bring FLSA wage violation claims to court, just know they aren’t like other labor and employment claims. They can be settled before you go to trial like all of claims. But they are special in that you need court approval, and the courts won’t grant approval to just any agreement. There are requirements the courts will look for when approving FLSA settlements.

What should I do if my employer is stealing my pay?

Best Ohio Wage Theft Attorney Answer: Consult an FLSA attorney regarding the specifics of your case. Beyond any other employment laws, the FLSA is the most complex. Most attorneys, even many employment law lawyers, do not have sufficient experience with the FLSA. If the company that you work for is not paying you all of your wages for all of your lawfully earned overtime compensation at a rate of one and half times your normal wages as requires under the Federal Fair Labor Standards Act or Ohio Minimum Fair Wage Standards laws or you are an nonexempt employee that has been misclassified as exempt or independent contractor, contact the attorneys at Spitz, The Employee’s Law Firm today for a free and confidential initial consultation. The experienced wage and hour lawyers at Spitz will provide you with the top options for your overtime pay dispute situation. (Read: What is the Spitz No Fee Guarantee?) If you even think that you may be entitled to overtime pay that you are not being paid, call our Cleveland, Columbus, Cincinnati, Toledo, Raleigh, and Detroit attorneys right now. Do not wait. The longer that you wait, the less that your claim may be worth.

Disclaimer:

The materials available at the top of this overtime, wage and hour web page and at this employment law website are for informational purposes only and not for the purpose of providing legal advice. If you are still asking, “Do I have a wage violation claim?”, “What is my FLSA claim worth?”, “My paycheck is short…” or “What do I do if my job refuses to pay me for all of my hours?”, the your best option is to contact an experienced overtime attorney to obtain advice with respect to FLSA questions or any particular employment law issue. Use and access to this employment law website or any of the links contained within the site do not create an attorney-client relationship. The legal opinions expressed at the top of this page or through this site are the opinions of the individual lawyer and may not reflect the opinions of The Spitz Law Firm, Brian Spitz, or any individual attorney.