Bringing some degree of clarity to the murky question of whether parties can dismiss a pending FLSA lawsuit on their own volition, the Court of Appeals for the Second Circuit has ruled that any dismissal with prejudice requires “the approval of the district court or the DOL to take effect.” Cheeks v. Freeport Pancake House, 2015 U.S. App. LEXIS 13815 (2d Cir. Aug. 7, 2015).
On appeal in Cheeks, both the employer and employee, parties to a settlement in the district court, urged that they were and should remain free to file a stipulation of dismissal with prejudice following their private settlement of an FLSA action. As part of its analysis, the Circuit Court elicited a letter brief from the Department of Labor, which took the view that courts must scrutinize all such settlements. The court adopted this view, calling the FLSA a “uniquely protective statute.” In a footnote, the court declined to address whether its analysis would have been any different based on a stipulation of dismissal without prejudice.
FLSA litigation in New York, one of the states within the Second Circuit’s jurisdiction, continues to be legion. Parties must consider the supervision doctrine in determining whether to settle and in structuring settlements.