The FLSA Permission Slip: Determining Whether FLSA Settlements and Voluntary Dismissals Require Approval
By Alex Lau
The Fair Labor Standards Act of 1938 (FLSA) seeks to protect the poorest, most vulnerable workers by requiring that they be paid a minimum wage and compensated for their overtime labor. When employers do not pay their workers minimum wage or overtime compensation and thereby violate the FLSA, workers have the power to sue their employers for remuneration. Like many other types of cases, most FLSA cases settle before going to trial. Unlike those other types of cases, however, most courts have held that settlements of FLSA cases must be approved to be enforceable. Even though Federal Rule of Civil Procedure 41 generally allows parties to settle lawsuits by voluntarily dismissing their lawsuits without approval, these courts have held that the FLSA should be an exception to Rule 41. Some courts, however, have held that settlements of FLSA cases should not require approval to be enforceable.
This Note addresses and analyzes the differences between these approaches. It seeks to balance the protection the FLSA intends to provide workers and the ability of parties to freely settle disputes embodied in Rule 41. To strike this balance, this Note suggests that settlements of lawsuits brought under the FLSA should not require approval, because the Act should be subject to and not exempt from Rule 41. However, settlements of causes of action arising under the FLSA should require approval to ensure the necessary protection the Act was meant to provide to the workers it serves.