June 18, 2020 Top Story

FLSA Claims Can Be Resolved Without Judicial Approval

Court ruling alters the understanding of settling wage-and-hour FLSA claims

By Nhan T. Ho

Litigators have traditionally understood that settlement of a claim brought under the Fair Labor Standards Act (FLSA) requires approval by courts or the Department of Labor. The U.S. Court of Appeals for the Second Circuit’s split decision in Mei Xing Yu v. Hasaki Restaurant, Inc. changed that understanding by requiring trial courts to honor the parties’ agreement to offers of judgment under Federal Rule of Civil Procedure 68. ABA Section of Litigation leaders say Yu correctly opens up channels for parties to resolve FLSA litigation without judicial supervision.

The sushi chef sued his employer over overtime wages

The sushi chef sued his employer over overtime wages

Credit: RichLegg | iStockphoto by Getty Images

The Yu Decision

Mei Xing Yu v. Hasaki Restaurant, Inc. involved an overtime dispute under the FLSA. There, the employee accepted an employer’s offer of judgment under Rule 68. The district court then sought to conduct a fairness review of the parties’ agreement for judicial approval, which, despite the parties’ objection, the district court found to be necessary. The parties jointly filed a petition for an interlocutory appeal, which was granted. A third party appointed as amicus curiae, with support from the Secretary of Labor, defended the district court’s decision.

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