Question. Can I privately settle an unpaid wage claim with my former employee?
A former employee agreed to compromise its claims unpaid wage under the Fair Labor Standards Act, 29 U.S.C. §201 et seq. (the "FLSA"), and the New York Labor Law with his former employer.
Pursuant to Cheeks v. Freeport Pancake House, Inc., 796 F.3d 199 (2d Cir. 2015), "stipulated dismissals settling FLSA claims with prejudice require the approval of the district court…to take effect." Id. at 206. The parties are required to submit to the Court an executed settlement agreement together with information supporting the agreement as fair and reasonable. This includes all classes of damages and even attorney’ fees.
Unlike the standard personal injury case, plaintiffs' counsel in FLSA cases are guaranteed an award of fees provided that the plaintiff prevails. And, as a practical matter, plaintiffs almost always prevail; though a plaintiff may not receive all of the compensatory or liquidated damages sought, it is the rare FLSA case where an employer is found to be free of any liability.