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Second Circuit to Decide Whether Court Approval of FLSA Settlements Applies to Accepted Offers of Judgment

Seeking to resolve a split among the district courts in the Second Circuit, the Court of Appeals has accepted an interlocutory appeal to decide whether, in resolving cases involving FLSA claims, offers of judgment under Rule 68 require DOL or judicial scrutiny and approval.  Yu v. Hasaki Restaurant, Inc., 2017 U.S. App. LEXIS 20698 (2nd Cir. Oct. 23, 2017).

In 2015 the Second Circuit, adopting the position taken decades ago by the Eleventh Circuit in Lynn’s Food Stores, Inc. v. U.S. Department of Labor, 679 F.2d 1350 (11th Cir. 1982), held that dismissal with prejudice, pursuant to FRCP 41, of a pending FLSA lawsuit requires review and approval by either the DOL or a court.  Cheeks v. Freeport Pancake House, Inc., 796 F.3d 199 (2nd Cir. 2015).  Federal Rule of Civil Procedure 68, however, provides that if at least 14 days before trial, a defendant offers to resolve a case by having a judgment taken against it in the proposed amount and the plaintiff accepts the offer, “[t]he clerk must then enter judgment” against the defendant.  If the plaintiff rejects the offer of judgment and later loses the case, or obtains a judgment for less than what the defendant offered, the plaintiff must pay any costs the defendant incurred after making the offer.

Since the Cheeks decision, district courts in the Second Circuit facing potential FLSA settlements have been split over whether Rule 68 provides a procedural workaround to the Cheeks requirement that FLSA settlements be approved by the DOL or a court.  The Court of Appeals’ decision in Yu should provide some clarity in this foggy area.

Jackson Lewis P.C. © 2020National Law Review, Volume VII, Number 297

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Noel Tripp Principal Employment lawyer at Jackson Lewis Law Firm
Principal

Noel P. Tripp is a Principal in the Long Island, New York, office of Jackson Lewis P.C. Since joining Jackson Lewis as a summer associate in May 2005, he has practiced exclusively in employment law.

Mr. Tripp has been involved in matters pending before federal and state courts and administrative agencies covering the gamut of employment-related matters from discrimination and workplace harassment to wage/hour disputes and affirmative-action compliance. His principal focus is the defense of class and collective action...

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Felice B. Ekelman, Jackson Lewis, compensation disputes lawyer, enforcement of restrictive covenants attorney
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Felice B. Ekelman is a Principal in the New York City, New York, office of Jackson Lewis P.C. Since joining Jackson Lewis in 1985, she has been engaged exclusively in the practice of labor and employment law on behalf of management.

Ms. Ekelman has represented employers in federal and state courts, and before the National Labor Relations Board, the Equal Employment Opportunity Commission, the Department of Labor Wage and Hour Division, and other federal, state and city administrative agencies. Her litigation experience includes employment law jury and bench trials and appellate arguments before state and federal courts. She has represented employers in hundreds of employment and labor arbitrations involving commission and compensation disputes, enforcement of restrictive covenants collective bargaining contract interpretation issues and termination disputes.

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