The Federal Court Procedure for Terminating a FLSA Case Partially Resolved Via Settlement

Currently, the law allows restaurant employers to pay employees a base rate below the mandatory minimum wage as long as those workers ultimately end up receiving total compensation that works out to be more than the minimum hourly requirement (which, here in Georgia, is $7.25.) If you find it necessary to pursue this kind of minimum wage lawsuit (or defend against one,) it’s important to recognize the many federal rules of procedure that may play a role in your case. Ensuring that the rules of procedure do not trip up your case (or your defense as an employer) is one area where a skilled Atlanta wage and hour lawyer can be invaluable.

Here’s a recent example from federal court minimum wage action to illustrate what we mean.

The plaintiffs were a group of servers at a high-end restaurant. Their employer charged customers a preset gratuity that it automatically added to diners’ bills and then split those “service charges” among the servers. In addition, the servers also received a base pay of $5.65 per hour.

The servers sued, alleging that their compensation violated minimum wage and overtime laws. The employer fought back, asserting that, when adding each server’s portion of the shared “service charge” money with the base rate of pay, those servers made just shy of $13 per hour, which exceeded both federal and state ($11 per hour in Florida) minimum wage requirements.

While the court was considering the employer’s motion for summary judgment on the two minimum wage claims, the two sides settled the servers’ federal overtime claim. Ultimately, the court sided with the employer on the two minimum wage claims, granting summary judgment on those causes of action. That meant all claims were resolved — either by judgment or settlement.

Bringing a Settled Case to an End

However, simply working out a mutually agreeable settlement to a claim doesn’t automatically end a case in federal court. Instead, the court must enter an order of dismissal, which meant that the servers still had to go through the process of dismissing the overtime claim they settled with the employer.

There are several potential ways to do that. One is for a plaintiff to timely file with the court a notice of dismissal or a stipulation of dismissal (the latter of which must be signed by all the parties.)

However, this procedure, which Federal Rule of Civil Procedure 41(a) spells out, is not available to all plaintiffs. As the 11th Circuit Court of Appeals explained in the servers’ case, this procedure is only viable if you’re seeking to dismiss your entire case, not just a single claim.

If you try to dismiss one count of a multi-count complaint, Rule 41(a) cannot authorize that dismissal and any dismissal on that basis is invalid, which means the claim remains pending before the trial court.

Parties who find themselves in a scenario like these servers were in can work around that difficulty through one of two options. One, they can ask the court, under the auspices of Rule 54(b), to enter what’s called a “partial final judgment,” or by amending their complaint in a manner that’s compliant with Rule 15.

These sorts of missteps can be costly in terms of both time and money. Consider that, in this case, the servers wanted to appeal the trial court’s rulings on the two minimum wage causes of action, but the appeals court could not hear that case until the trial court reached a final resolution on the other claims (namely, the overtime claim.)

As an employer, the costs of committing a minimum wage violation can be very high. As an employee, the costs of not receiving a legally sufficient wage are also onerous. Whether you’re an employer or a worker, the Atlanta wage and hour attorneys at the law firm of Parks, Chesin & Walbert are here to help, offering employers sage advice about remaining compliant and providing workers with zealous advocacy in pursuit of everything to which the law says they’re entitled. Contact us through this website or at 404-873-8048 to schedule a consultation today.

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