A pair of unsuccessful attempts to settle two Fair Labor Standards Act lawsuits in Georgia are very instructive about how FLSA settlements work. One crucial concept to know is that settling an FLSA case requires clearing more hurdles than, say, settling an ordinary auto accident case. Whether you are seeking to settle your FLSA case or litigate it all the way to a judgment, an experienced Atlanta wage-and-hour lawyer can help you protect your legal rights and your individual interests.
Typically, in most civil lawsuits, the only thing necessary to consummate a settlement is for the parties to agree to a set of terms. As a Middle District of Georgia judge noted in a July 2023 opinion, that’s not true with FLSA cases. In these lawsuits, the law requires the court to review and approve any settlement.
The crux of this review and analysis process is ensuring the settlement’s reasonableness. A Northern District opinion — also from last month — explained that the judge must ensure the settlement “is a fair and reasonable resolution of a bona fide dispute over FLSA provisions,” and must consider “both the rights of the settling employee and the interests of the public at large.”
That means ensuring that the settlement is fair to the worker and also avoids “impermissibly frustrat[ing] the implementation of the FLSA in the workplace.” If the settlement passes the court’s scrutiny, the case is concluded. If not, the court will deny the motion and the case will proceed.
Additionally, the court will apply this reasonableness requirement to all aspects of the settlement, including the fee agreement between a worker and her lawyer. In the Northern District case, the employee agreed to compensate her attorney on a contingency basis, meaning that the lawyer received a percentage of the worker’s settlement payment. The judge in that case rejected the settlement because the parties’ motion did not specifically explain why the attorney’s fee was reasonable. (The law doesn’t ban contingency fee agreements but courts in the 11th Circuit (meaning federal district courts in Georgia, Alabama, and Florida) must ensure all attorney’s fees were “justified” based on “the specific facts of the particular case.”)
Sealing a Settlement Requires ‘Compelling’ Reasons
Another thing to bear in mind relates to sealing the terms of the settlement. Sometimes, one or both parties might see a benefit to placing the settlement under seal, which means the document would not be publicly available. Be aware that courts are very reluctant to seal FLSA settlements. The law recognizes a “presumption of openness” in judicial records, and that includes case settlements. That presumption is even stronger if the legal basis for the lawsuit has a “private-public character.” Employee rights granted by the FLSA represent one example of that “private-public character.”
If you want the court to seal your settlement, you must present the judge with a “compelling reason” to do so. A simple desire to “maintain the privacy of [the] settlement” is generally not a sufficiently compelling basis.
As the preceding paragraphs illustrate, there’s more to settling an FLSA case than just agreeing on a dollar figure that the employee will receive. Once you’ve decided to settle, you likely want to do so as quickly and efficiently as possible, which means avoiding preventable procedural pitfalls. Whatever path your FLSA case takes, you can count on the skilled Atlanta wage and hour attorneys at the law firm of Parks, Chesin & Walbert to work diligently for you to vindicate your legal rights and optimize your outcome. Contact us through this website or at 404-873-8048 to schedule a consultation today.