Second Circuit Holds That FLSA Settlements Require Court Or Department Of Labor Approval

On August 7, 2015, in Dorain Cheeks v. Freeport Pancake House, Inc., 796 F.3d 199 (2d Cir. 2015), the United States Court of Appeals for the Second Circuit held that the Fair Labor Standards Act ("FLSA") is an "applicable federal statute" within the meaning of Federal Rule of Civil Procedure 41(a)(1)(A)(ii) ("Rule 41"). The practical import of this decision, at least within the jurisdiction of the Second Circuit, is that private parties cannot settle FLSA claims through a Rule 41 stipulation of dismissal with prejudice, but rather must obtain approval of the terms of the settlement from either a court or the U.S. Department of Labor ("DOL").

The Facts

In 2012, Cheeks filed a lawsuit against Freeport Pancake House under the FLSA and New York Labor Laws...