In an effort to deter unfair and inequitable agreements in Fair Labor Standards Act claims, several federal judges have rejected proposed settlements which they believe are not in the best interest of the Plaintiffs. Such issues as monetary value compared to that of damage(s) claimed, confidentially provisions, and the release of future legal claims are issues that have been addressed by the federal court.
Earlier this week, a federal judge called a proposed settlement between employees and Aeropostale, Inc. one of the worst he had seen. After allegations that Aeropostale failed to pay its employees’ overtime in a timely manner were found to have merit, the parties attempted to reach a settlement in the action. The proposed settlement would have guaranteed that each claimant would receive between $0 to $588 in exchange for a release to bar future suits to such claims. In his decision to decertify the FLSA action, Judge William Alsup wrote, “No one should have to give a release and covenant not to sue in exchange for zero (or virtually zero) dollars.”
In a claim against Metlife, U.S. District Judge Josephine L. Staton took interest in the analysis of how the funds would be distributed between the employees. As set forth in the proposed settlement, service representatives who had been employed with the company less than 10 quarters were treated the same as those who had been employed with the company more than ten years. In Judge Staton’s opinion, the proposed distribution of funds would not have been an equitable division.
After a settlement was proposed between the parties in an action alleging that Bubba Gump did not pay wait staff overtime and forced them to work off the clock, U.S. Magistrate Judge, Karla R. Spaulding, took issue with the “sweeping release,” that would release individuals and/or entities not named in the complaint and release claims other than those listed in the complaint. Judge Spaulding also took issue with the confidentiality clause, which provided that the Plaintiff would be barred from discussing the terms of the settlement, the basis of her claims against the restaurant, and the fact that the claims existed.
If you or someone you know believes they have experienced unfair labor practices, the team at Radford & Keebaugh can help. Contact us by phone at (678) 369-3609 or use our contact form.