Fifth Circuit Court of Appeals Rules on FLSA Issue Involving Settlement
The Fifth Circuit Court of Appeals recently ruled on an issue regarding the Fair Labor Standards Act. Martin, et al. v. Spring Break ‘83 Prods., L.L.C., et al. No. 11-30671 (5th Cir. July 24, 2012), available at http://www.ca5.uscourts.gov/opinions/pub/11/11-30671-CV0.wpd.pdf.
A union representing workers involved in the production of a movie signed a settlement agreement with an employer. Pursuant to the agreement, the workers released their rights to pursue any FLSA claims against the employer in exchange for payments. In a lawsuit regarding the workers’ FLSA claims, the workers argued that the release of claims was invalid because individuals may not privately settle FLSA claims. The district court enforced the release, and the workers appealed.
On appeal, the Court held that the payments accepted by the workers pursuant to the settlement agreement were an enforceable resolution of the workers’ FLSA claims. The settlement agreement addressed a bona fide dispute about the amount of time the workers worked. It was not a compromise of the workers’ guaranteed FLSA substantive rights. The Court affirmed the grant of summary judgment to the employer.
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