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News | Sep 09, 2019

Overtime Class Action Attorney Alert: Fourth Circuit Explains that FLSA Collective Action Settlements Do Not Require Notice to Covered Employees

As readers of this blog probably know, courts uniformly hold that judges must review Fair Labor Standards Act (“FLSA”) collective action settlements for fairness (although the verdict is still out on whether the same rule applies to FLSA lawsuits settled on behalf of an individual employee).  However, courts differ on what standards and procedures should apply to such judicial review.  In traditional “class actions,” Federal Rule of Civil Procedure 23 describes a three-step process for reviewing settlements: (1) the parties move for “preliminary approval” of the settlement; (2) upon preliminary approval, the class members receive a court-authorized notice describing the settlement and providing them with an opportunity to object or seek exclusion from the settlement; and (3) after the notice period expires, the judge conducts a final approval hearing and decides whether to approve the settlement.  But, as many courts have observed, FLSA collective actions are fundamentally different from Rule 23 class actions.  Most notably, FLSA collective settlements only impact workers who affirmatively “opt-in” to the collective and, therefore, do not impact the rights of “absent” class members.  Along these lines, you might want to take a look at the Fourth Circuit’s July 16, 2019 Opinion in Haskett v. Uber Technologies, Inc., Case No. 19-1116.  Therein, the Circuit Court explains: “Unlike Rule 23, [FLSA] section 216(b) does not require a district court to notify potential claimants about a proposed settlement.”  The opinion then cites several opinions supporting this proposition.  Citation to Haskett might be useful next time you are seeking judicial approval of an FLSA collective action settlement. -PW

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