Paul DeCamp, Member of the Firm in the Employment, Labor & Workforce Management practice, in the firm’s Washington, DC, office, was quoted in Law360 Employment Authority, in “Judge Rekindles Debate on Reviewing FLSA Settlements,” by Jon Steingart. (Read the full version – subscription required.)
Following is an excerpt:
Lawyers for workers and businesses don't see eye to eye on a lot, but one topic that elicits scorn from both sides is whether a court needs to sign off on a Fair Labor Standards Act settlement.
Many district courts require judicial approval for FLSA deals, although there is no consensus. The U.S. Supreme Court hasn't weighed in, and only the Second Circuit has firmly held that review is required. …
U.S. District Judge Joshua D. Wolson rekindled the debate July 12, when he held in an overtime suit brought against Duran Landscaping Inc. that the FLSA doesn't require or prohibit court review. He said he would look over a settlement agreement in the case if the parties wanted him to. Duran and the three workers who sued the company declined his offer and filed a notice the next day that they agreed to dismiss the case.
The issue before Judge Wolson was how to apply the Federal Rules of Civil Procedure, which let parties agree to dismiss a case unless one of several exceptions apply. One of the carveouts is if "any applicable federal statute" limits that right, forcing the judge to decide whether the FLSA imposes any restrictions.
The FLSA's text does not explicitly call for court review, providing the strongest argument against interpreting the law to require it, he said. He contrasted the FLSA with other statutes Congress enacted around the same time that require court review. …
Paul DeCamp, who represents management as co-chair of Epstein Becker Green's wage and hour practice group, said the turmoil in approving settlements comes from a line of Supreme Court rulings that held the FLSA is designed to counteract unequal bargaining power between workers and employers.
"This is an example of how lower courts can take flowery rhetoric from Supreme Court opinions as an invitation to get creative and make new mischief," he said. "There's nothing in any of the Supreme Court case law that requires the result that the Second Circuit issued in Cheeks."
He was perplexed by courts saying that settlements in FLSA cases require the presiding judge's involvement. The view that workers need extra protection is paternalistic and insulting, he said.
"What I think it comes down to is what to me seems like a very elitist and condescending view of workers: that plaintiffs in FLSA cases are so incapable of making informed decisions — so beaten down by their employers — that they can't be trusted, even with the guidance of attorneys, to resolve their claims," he said.
In other types of employment litigation, parties get to agree to dismiss a case and can execute a settlement out of court. FLSA cases shouldn't be held to a different standard, he said.
"I don't see any good reason in FLSA policy or in public policy more broadly why the courts should be getting in the way of that process," he said. "I think that it would be so much better for workers and employers if the courts would just get off their back."
"Yes, [courts should] be actively involved in managing and supervising collective actions and class actions," he said. "But in smaller cases — in individual cases, noncollective, nonclass cases — get out of the way." …
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