On Monday, December 10, 2012, the U.S. Supreme Court declined to review a Fifth Circuit Court of Appeals decision, Martin v. Spring Break ’83 Productions, L.L.C., which held that parties may privately settle and release wage claims that result from a bona fide dispute as to liability rather than a compromise of guaranteed FLSA rights. Martin, as we previously discussed, stands in sharp contrast to the Eleventh Circuit Court of Appeals decision in Lynn’s Food Stores, Inc. v. United States, which held that FLSA disputes could only be settled if either the U.S. Department of Labor supervised payment or a court approved a settlement after an employee filed a private lawsuit.
This is positive news for employers that operate within the Fifth Circuit, which includes Texas, Louisiana, and Mississippi. Whether district or other appellate courts will follow the Fifth Circuit’s lead, in light of the Supreme Court allowing the Martin decision to stand, remains uncertain. However, employers who operate within the Eleventh Circuit, which includes Florida, Georgia, and Alabama, are still bound by the Lynn’s Food decision.