The U.S. Court of Appeals for the Second Circuit recently became the first federal appeals court to rule that an accepted “offer of judgment” under Rule 68 of the Federal Rules of Civil Procedure that settles a lawsuit brought under the Fair Labor Standards Act (FLSA) does not have to be approved by a court to become final, unlike the rules that apply to a private settlement of an FLSA claim. The ruling is a positive development for an employer that might seek to curtail an expensive FLSA collective action by extending a formal “offer of judgment” that the plaintiffs accept.
Ruling in the case of Yu v. Hasaki Restaurant, Inc., 944 F.3d 395 (2d Cir. 2019), the Second Circuit found that when it comes to Rule 68 offers of judgment, judicial approval is not necessary, observing that by filing a lawsuit, “airing the parties’ dirty laundry in public and before a judge, and then coming to an agreement” makes Rule 68 judgments different from private FLSA settlements requiring court approval or U.S. Department of Labor (DOL) supervision.
A copy of the court’s ruling in Yu is available online.
Members of the Center for Workplace Compliance (CWC) can read more here.