More FLSA Common Sense from the 5th Circuit - Settlement Without Supervision OK
by Michael Fox
After lamenting for some time the direction which FLSA law has been heading, it may be too soon to say that the inevitable swing back to the middle has begun, but there are encouraging signs and last week's decision in Martin, et al v. Spring Break '83 Prodn, L.L.C (5th Cir. 7.24.12) is yet another step.
When there was a dispute over time worked by the lighting and rigging technicians on that now famous film, Spring Break '83, the production company and the union reached an agreement, money was paid and accepted, and of course a law suit was filed.
The first argument was that the individuals who had brought the suit had not signed the settlement agreement, but the Court found the Union was their authorized representative.
More importantly, the individuals argued that the settlement was not permitted under the terms of the FLSA, because it was not approved by a court or the DOL. In a case of first impression, the Court found that this was not the type of case where that prohibition applies. This was not a challenge to substantive FLSA rights, but merely settlement of a disputed liability.
In a real compliment to District Judge Xavier Rodriguez, who sits in San Antonio, the court adopted his reasoning in his 2005 decision, Martinez v. Bohls Bearing Equip. Co. As I noted in my post about the Bohls Bearing case at the time, Challenging Conventional Wisdom - Private Settlements of FLSA May Be OK, it was unclear how far one can go without getting approval, but clearly there is some area where court and DOL approval are not required in order to have a valid FLSA settlement agreement.
And that is not only good news, but common sense.