Unpaid overtime claims cannot be finally resolved without court approval

One aspect of the FLSA, including its overtime, minimum wage, retaliation, and other provisions, is that any settlement – to be full and final – must be approved either by a judge, or by the Department of Labor. Defendant corporations, which almost always require that settlement agreements are confidential, will often seek to avoid or minimize the publication of settlement agreement terms. 

For example, last month, in the case of Carpenter vs. Planation Homeowners, which included FLSA claims, the parties asked a Tampa court to review their settlement agreementin camera, which is a legal way of saying in chambers, and outside the public sphere. In denying this request, the court first explained that settlement agreements in FLSA cases must always be reviewed and approved, and then explained that an in camerareview would be the same as allowing the parties to file their agreement under seal. 

The court went through the requirements for a settlement to be filed under seal, including that such a step requires the presence of extraordinary circumstances (the protection of national security, protection of trade secrets, protection of third parties, etc.). Since none of those were present in this case, the court denied the request to review the agreement in camera

The court then presented the parties with two options: First, they could file their settlement agreement publicly for approval (as required by law), or second, they could dismiss the case without prejudice. The first option would be an enforceable settlement agreement but will be completely public, whereas the second will be a private agreement but will not be enforceable. 

A review of the docket reveals that the parties picked option one, filing the full settlement agreement publicly and obtaining a dismissal with prejudice of the case. This issue comes up repeatedly in unpaid overtime FLSA cases, because the defendants often do not want the public, or other employees, to know how much they paid to settle a claim. However, with limited exceptions (to be covered later), it is very difficult to avoid publication of settlement terms in such cases.