The U.S. Department of Labor’s Final Rule raising the minimum salary level requirements for application of the Fair Labor Standards Act (FLSA) “white collar” exemptions is scheduled to take effect July 1, 2024. Lawsuits, however, have been filed seeking to invalidate and set aside the Final Rule and to block the increased salary thresholds from taking effect.

The Final Rule, released on April 23, increases the minimum salary requirements for the executive, administrative, and professional (EAP) exemptions from the FLSA’s minimum wage and overtime requirements in two stages. On July 1, the standard EAP salary threshold will rise from the current floor of $684 per week ($35,568 annually) to $844 per week ($43,888 annually). On January 1, 2025, the salary threshold would increase even more sharply, to $1,128 per week ($58,656 annually). The simplified exemption test for highly compensated employees will increase from $107,432 to $132,964 on July 1, and to $151,164 on January 1, 2025. The Final Rule also provides for automatic increases to the salary thresholds every three years, based on then-existing wage data, without first allowing an opportunity for public comment. (See “DOL Releases Final White-Collar Exemption Rule, Sets Minimum Salary to Increase in Phases Beginning July 1, 2024.”)

On May 22, 2024, a coalition of business groups filed suit challenging the Final Rule in the federal court for the Eastern District of Texas, a jurisdiction known to closely scrutinize federal agency rulemaking for potential over-reach. The case is Plano Chamber of Commerce v. U.S. Department of Labor. On June 3, the state of Texas sued in the same court. (State of Texas v. United States Department of Labor). The plaintiffs have asked the court to consolidate the cases, and the court has set a June 24 hearing on the plaintiffs’ motion for injunctive relief preventing the DOL from implementing the rule.

Also on June 3, a public interest law firm that focuses on challenging “unlawful administrative power” brought a complaint in another Texas district court. The suit was brought on behalf of a small business whose employees are currently overtime-exempt but will lose the exemption when the new salary floor takes effect. In that case, the court directed the plaintiff to file any motion for preliminary injunctive relief by June 12.

In each of the complaints, the plaintiffs argue that the DOL does not have statutory authority to raise the minimum salary level for the exemptions to apply, or to impose the automatic updates. They assert that the FLSA defines the EAP exemptions based solely on the duties that an employee “customarily and regularly” performs. Also, even if the DOL was granted such authority by Congress, they argue the agency exceeded its authority when it issued the Final Rule because the high salary level imposed in the rule — a 65 percent increase to the standard salary minimum — “categorically excludes” vast numbers of employees who perform exempt duties (and therefore should be classified as exempt under the FLSA). In addition, the plaintiffs contend that if Congress had granted such authority to the DOL, it was an unconstitutional delegation of power.

Jackson Lewis is tracking the developments in these cases. In the meantime, employers should continue to prepare for July 1 compliance with the expectation that the rule will take effect as scheduled.

In its recent opinion in Huerta v. CSI Electrical Contractors, the California Supreme Court addressed three inquiries posed by the U.S. Court of Appeals for the Ninth Circuit addressing “hours worked” within the context of the California Labor Code and several state wage orders:

  • Is time spent on an employer’s premises in a personal vehicle and waiting to scan an identification badge, have a security guard peer into the vehicle, and then exit the security gate compensable as “hours worked”?
  • Is time spent on the employer’s premises in a personal vehicle, driving between the security gate and the employee parking lots subject to certain rules from the employer “hours worked”?
  • Is time spent on the employer’s premises, when workers are prohibited from leaving but not required to engage in employer-mandated activities, hours worked when it is designated as an unpaid meal period under a qualifying collective bargaining agreement?

Shannon Bettis Nakabayashi, a principal in Jackson Lewis’ San Francisco office, discusses the California Supreme Court’s answer to these questions in our California Workplace Law Blog,

The U.S. Department of Labor (DOL) final rule revising the standard for determining whether a worker is an employee or independent contractor under the Fair Labor Standards Act (FLSA) took effect March 11, 2024. The fate of the rule is uncertain, however, as it faces several legal challenges that could disrupt its implementation.

Independent contractor final rule

The final rule, published in the Federal Register on Jan. 10, 2024, formally rescinds the regulation issued by the DOL in 2021 and adopts instead a six-factor “economic realities” test long applied by courts. (See Labor Department Releases Independent Contractor Final Rule, Revising Standard.) Under the new rule, none of the enumerated factors is given weight over the others, and the factors are not exclusive, Rather, independent contractor status is to be determined based on the “totality of the circumstances.”


The 2021 rule, issued in the waning days of the Trump Administration, was the first-ever formal regulation defining independent contractor status under the FLSA. However, the Biden DOL withdrew the rule in May 2021, and a coalition of industry groups filed suit challenging the withdrawal. In a 2022 decision, a federal court in Texas held that the DOL unlawfully delayed and withdrew the 2021 rule. (See DOL Withdrawal of Trump-Era Independent Contractor Final Rule Unlawful, Court Rules.) The government appealed, and the appeal was held in abeyance pending completion of new rulemaking. With the January publication of the 2024 final rule, the business groups on Feb. 19 asked the appeals court to lift the stay, vacate as moot the district court’s 2022 decision, and remand the case to the district court to allow the plaintiffs to file an amended complaint. The amended complaint was filed on March 5. Coalition for Workforce Innovation v. Su (E.D. Tex., Mar. 5, 2024, No. 1:21-CV-130).

A separate action, Frisard’s Transportation, LLC v. U.S. Department of Labor (E.D. La., Feb. 8, 2024, No. 2:24-cv-00347) was filed by the Liberty Justice Center and Pelican Institute for Public Policy on behalf of a family-owned trucking company that employs 30 independent owner-operator drivers in the state.

Professionals hoping to ensure their ongoing status as independent contractors also have filed legal challenges. In Warren v. U.S. Department of Labor (N.D. Ga., Jan. 16, 2024, No. 2:24-cv-00007),four freelance writer-editors have sued claiming the rule amounts to a “concerted effort to force them into employment relationships they neither want nor need.” The plaintiffs assert, based on recent conversations with clients and on past experience, that they will lose business due to uncertainty about their status and clients’ fear of liability under the new rule.

Similarly, in Littman v. U.S. Department of Labor (M.D. Tenn., Feb. 21, 2024, No. 3:24-cv-194), two freelance writer-editors allege the new rule will hinder their ability to continue working independently and deter potential clients from hiring them. One plaintiff asserts that a client already has restricted the number of hours she can work, another has required her to indemnify the company if it is found to have misclassified her, and several others have begun requiring her to document the precise tasks she performs, an additional chore which she contends takes her several unpaid hours to complete.

Legal claims

According to the complaints, the DOL rulemaking was arbitrary and capricious, was an abuse of discretion, and exceeded the agency’s statutory authority because Congress did not empower DOL to issue legislative rules defining the employment relationship under the FLSA. Like most recent challenges to federal agency rulemaking, claimants also contend that if Congress did authorize the DOL to promulgate an independent contractor rule, Congress violated the Constitution’s nondelegation doctrine. Plaintiffs in the Warren case also claim that the independent contractor rule is unconstitutional because it fails to provide sufficient guidance about who is covered under the FLSA despite that violations of the statute can incur serious (even criminal) penalties.

The lawsuits uniformly seek a preliminary and permanent injunction barring DOL from enforcing the 2024 rule and an order invalidating the rule. The industry plaintiffs also want the court to declare unlawful and set aside the DOL’s rescission of the 2021 rule and a declaration that the 2021 rule remains in effect.

On March 7, the Frisard’s Transportation plaintiffs filed an emergency motion for a nationwide temporary restraining order (TRO) and motion for a preliminary injunction blocking the rule. Those motions were denied on March 8. Plaintiffs in the Littman case have filed a motion for preliminary injunction to halt enforcement of the Rule pending a final judgment on the merits.

Congressional Review Act challenge

In addition to the lawsuits, Congressional Republicans are seeking to erect a legislative roadblock. On March 6, U.S. Senator Bill Cassidy, ranking member of the Senate Health, Education, Labor, and Pensions (HELP) Committee, introduced a Congressional Review Act (CRA) resolution to overturn the independent contractor rule. A companion resolution (H.J. Res.116) was introduced in the House. The CRA allows Congress to overturn agency action through passage of a joint resolution of disapproval, under which to consider legislation to overturn rules. The rule at issue cannot go into effect (or continue to be enforced) if both houses of Congress approve (and the President signs) a CRA joint resolution of disapproval—or if Congress overrides a presidential veto.

Jackson Lewis is tracking these legal challenges and will keep you posted on developments. For now, though, the DOL’s final independent contractor rule is in effect. Reach out to your Jackson Lewis attorney for assistance complying with the changing legal requirements of working with independent contractors.

The Senate Committee on Health, Education, Labor, and Pensions (HELP) on Tuesday, February 27, 2024, narrowly advanced the nomination of Acting Secretary of Labor Julie Su to serve as permanent Secretary of Labor. The Committee voted 11-10 to advance her nomination to the full Senate floor, according to media reports.

The HELP Committee held a markup on Su’s renomination in a closed-door meeting Tuesday. Sen. Bernie Sanders (I-Vt.), HELP Committee Chair, issued a statement of support. “She has been an excellent Deputy Secretary of Labor, an excellent Acting Secretary of Labor, and I believe that she will make an excellent Secretary of Labor. Her strong pro-worker track record and tireless dedication to working families across this country shows beyond a shadow of a doubt that she is the right person for the job. I urge my colleagues to support her nomination.”

The Senate HELP Committee previously voted to advance Su’s nomination to Labor Secretary in April of 2023 but it has stalled since.

President Joe Biden first nominated Su last spring to replace former DOL Secretary Marty Walsh, who departed in February 2023. Her nomination was returned to the White House last December after failing to garner sufficient support to clear a path to confirmation by the full Senate. In January 2024, President Biden promptly renominated Su for the post. She continues to face staunch opposition, however, and her nomination is not expected to be approved by the full Senate.

Su has served as Acting Secretary of Labor since March 2023. During this time, the DOL has engaged in significant rulemaking, including releasing a final independent contractor rule, a sweeping revamp of the Davis-Bacon regulations, and a proposed rule revising the minimum salary requirements for application of the DOL’s “white-collar” exemptions. Prior to that, she served as Deputy Labor Secretary, a post for which she was confirmed by the full Senate to in July of 2021.

Also this week, business groups registered their continuing opposition to Su’s nomination.

In a letter Tuesday to HELP Committee members, Jeff Brabant, National Federation of Independent Business (NFIB) Vice President of Federal Government Relations, wrote, “As Acting Secretary, Julie Su’s Department of Labor has consistently demonstrated a lack of interest in complying with the Regulatory Flexibility Act, which requires the Department to consider the impacts its regulations will have on small businesses.”

“No matter how many times she’s renominated, Julie Su’s record remains a huge red flag for our industry and any senator concerned about radical policies from California becoming federal law,” American Trucking Association President and CEO Chris Spear said Tuesday.”

President Joe Biden on Monday, January 8, 2024, sent to the Senate the nomination of Acting Secretary of Labor Julie Su to serve as permanent DOL Secretary. President Biden previously had signaled his intent to send the nomination back to the Senate after it failed in the last session.

Biden first nominated Su last spring to replace former DOL Secretary Marty Walsh, who departed in February 2023. However, her nomination was returned to the White House in December after her nomination failed to garner sufficient support to clear a path to confirmation by the full Senate.

Su has been confirmed to serve as DOL’s Deputy Labor Secretary, but her nomination to the agency’s top post has faced stiff resistance by Senate Republicans, who had urged the President not to renominate the embattled Su and to put forward a different nominee.

The nomination of Acting Secretary of Labor Julie Su to serve as permanent DOL Secretary has been returned to the White House after failing to garner sufficient support to clear a path to confirmation by the full Senate, according to media reports.

President Biden nominated Su last spring to replace former DOL Secretary Marty Walsh, who left the agency in February 2023. Republican members of the Senate Committee on Health, Education, Labor, and Pensions (HELP) have opposed the nomination from the start, in part due to her tenure as head of California’s Labor & Workforce Development Agency (LWDA) and, prior to that, as California Labor Commissioner. In that role, Su implemented use of the controversial “ABC” test for determining whether a worker is an employee or independent contractor.

Republicans on the HELP Committee had sought assurances that Su would not attempt to implement the ABC test at the federal level, and also that the DOL would not undertake rulemaking on a joint employer test. In its last semiannual agenda, the DOL offered no indication that a joint employer rule was in the works. An independent contractor proposed rule, issued in 2022, would return to the multi-factor analysis used by the DOL for decades and which, in some variation or another, has been used by the federal courts throughout that time. The rule has yet to be finalized. An independent contractor final rule was slated for an October 2023 release date, but it is currently pending review at the White House. Under Su, the DOL also issued a proposed rule that would sharply increase the minimum salary floor to satisfy the white-collar exemptions from the Fair Labor Standards Act’s overtime and minimum-wage requirements. The DOL has targeted an April 2024 release of the final rule.

President Joe Biden reportedly plans to renominate the embattled Su for the post.

The U.S. Department of Labor (DOL) unveiled its semi-annual regulatory agenda on December 6, 2023, which sets an April 2024 date for release of the agency’s anticipated final rule amending the regulations defining the “white collar” exemptions from the overtime and minimum wage requirements of the Fair Labor Standards Act (FLSA).

The DOL released its proposed rule Defining and Delimiting the Exemptions for Executive, Administrative, Professional Outside Sales and Computer Employees on September 8, 2023. As proposed, the rule sharply increases the minimum salary requirements for the executive, administrative, and professional (EAP) exemptions to apply. The salary threshold would increase from the current $684 per week ($35,568 per year) to $1,059 per week ($55,068 per year)—a 55% increase from the current level. The minimum salary for application of the highly compensated employee (HCE) exemption would jump by 34%, from $107,432 per year to $143,988 per year. However, the DOL has indicated the actual salary threshold will be based on earnings data as of the date the final rule takes effect — which means the salary floor may be even higher than the projected $55,068. That could lift the operative threshold to more than $60,000 annually. (For more on the proposed rule, see DOL Releases Proposed White-Collar Exemption Rule, Sets Minimum Salary at $55,068.)

Whether the DOL will meet its April 2024 target date remains to be seen. The agency will have to review more than 33,000 comments received in response to its notice of proposed rulemaking, and to address substantive comments in the final rulemaking. It’s also uncertain how closely the final rule will conform to the rule as proposed, and when the final rule, once published, will take effect. The DOL’s proposed rule did state the rule would become effective 60 days after publication of a final rule (the minimum timeframe mandated for “major” rules under the Congressional Review Act). The DOL specifically sought comments on the proposed effective date and on whether to apply different effective dates to different provisions of the proposed rule. (Past rulemaking is not a useful predictor: the DOL’s Obama-era white-collar rule revision took effect more than 6 months after the final rule was issued; the Trump DOL’s final rule took effect 3 months after publication.)

Complicating matters further for employers as they seek to evaluate their options for compliance with the rule change is the possibility of a legal challenge (and possible injunctive relief barring enforcement pending the challenge).

Independent Contractor Rule

The other significant rulemaking in the formal agenda by the DOL’s Wage and Hour Division is the “Employee or Independent Contractor Classification Under the Fair Labor Standards Act,” which is in the final rule stage. The DOL had indicated that its independent contractor final rule would be published in October 2023 (five months later than it had previously asserted), but the agency failed to meet this deadline. On September 28, 2023, the final rule was sent to the White House Office of Information and Regulatory Affairs (OIRA), the final stage of the rule review process.

A notice of proposed rulemaking for the new Independent Contractor rule was issued in October 2022. The proposed rule would formally adopt the “economic realities” test for determining whether a worker is an employee or independent contractor under the FLSA. (For a full discussion of the NPRM and the history of the independent contractor analysis under the FLSA, see our article, What’s Old is New Again: Labor Department Flip-Flops on Independent Contractor Analysis.)

Joint Employer Rule

Absent from the DOL’s semi-annual agenda is reference to a joint employer rule. Talk of whether the DOL would engage in such rulemaking has resurfaced, particularly in light of the final rule issued by the National Labor Relations Board in October 2023 (and now set to take effect February 26, 2024). However, DOL leadership has indicated such a rule is not currently in the works, and the latest rulemaking agenda confirms there is no agency action at this time.

House Republicans are seeking assurances, however. In a December 7 letter, Rep. Virginia Foxx, House Education and the Workforce Committee Chair, asked Acting Secretary of Labor Julie A. Su to commit that the DOL will not issue a joint employer rule during Su’s tenure at the agency. Foxx was troubled by Su’s failure to expressly rule out a joint employer rule when she spoke at a Congressional hearing last June.

DOL joint employer rulemaking has been in limbo since July 2021, when the agency rescinded an employer-friendly final rule on “Joint Employer Status Under the Fair Labor Standards Act” issued during the final year of the Trump administration. In its formal rule rescinding the Trump-era joint employer rule, the agency did not propose a replacement rule, instead stating that “the Department will continue to consider legal and policy issues relating to FLSA joint employment before determining whether alternative regulatory or subregulatory guidance is appropriate.”


Please contact a Jackson Lewis attorney if you have questions about the status of DOL rulemaking.

County firefighters and law enforcement officers who opt out of employer- or union-provided health insurance coverage receive a monetary credit each pay period, minus an “opt-out fee” that goes toward the costs of maintaining the insurance plans. Although the final credit received in their pay is part of their regular rate of pay for purposes of calculating overtime compensation under the Fair Labor Standards Act (FLSA), the employer did not include in the regular rate of pay the amount withheld as an opt-out fee. The Ninth Circuit held this was proper as the opt-out fees were correctly excluded under a statutory exception for health plan contributions. Sanders v. County of Ventura, No. 22-55663, 2023 U.S. App. LEXIS 31641 (Nov. 30, 2023).

“When an employer, as here, decides to allow employees to retain some portion of an unused health insurance credit, it can permissibly structure the program to prop up the employee health plans without treating the full amount of the health credit as part of the FLSA regular rate of pay,” the appeals court wrote and affirmed a district court’s grant of summary judgment in favor of the county employer in an FLSA overtime collective action.

The Ninth Circuit has jurisdiction over federal courts in Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, and Washington state.

Opt-Out Fees

Ventura County firefighters and law enforcement officers receive a flexible benefit allowance every pay period, which they can use toward premiums for the county-sponsored health plan or union-sponsored plan. Those who opt out of coverage are also entitled to this monetary “flex credit” each pay period; however, a portion of this credit is deducted as a fee that the employer uses to fund the health plans.

The flex credit appears on employees’ pay stubs as “earnings,” and the opt-out fee appears as a “before tax deduction.” After the county subtracts the opt-out fee from the flex credit, it pays the balance to employees in cash. The opt-out fee (and, thus, the residual cash payment to employees who opt out) varies from year to year. The county treated the net cash payment to opt-out employees as part of their regular rate of pay when calculating their overtime compensation; however, the county did not include the value of the opt-out fee in the regular rate calculation.

A federal court in California held that the opt-out fee was excluded correctly under 29 U.S.C. § 207(e)(4), which excludes from the regular rate “contributions irrevocably made by an employer to a trustee or third person pursuant to a bona fide plan for providing health insurance.” The Ninth Circuit agreed.

Not a Cash-in-Lieu Payment

The plaintiffs cited Flores v. City of San Gabriel, 824 F.3d 890 (9th Cir. 2016) for the contention that the regular rate should include the opt-out fee. However, Flores distinguished between cash-in-lieu payments (which were to be included in the regular rate) and contributions to employees’ benefits (which may be included in the regular rate, depending on whether the program in question is a “bona fide plan” under Section 207(e)(4)). The plaintiffs argued that the opt-out fee is equivalent to a cash-in-lieu payment, but the appeals court said this reflects a misunderstanding of the nature of the opt-out fee. The opt-out fee does not function like the cash payment in Flores; instead, it is allocated to fund the health plans. The net cash payment does function like the cash payment in Flores, and the county treats it as such.

Paystub Description is Irrelevant

The plaintiffs pointed to the fact that the flex credits are displayed as “earnings” subject to a “before-tax deduction” (the opt-out fee). This was of no consequence, said the appeals court, because the paystubs reflect the requirements of the Internal Revenue Code, not the FLSA—and not the practical reality of the transactions. When determining the nature of the payment in question, what matters is what actually happens under the operative contract. Here, employees who opt out receive in cash only the amount left after the opt-out fee is subtracted.

Contributions Were “For Employees”

According to the plaintiffs, the exception outlined in § 207(e)(4) did not apply because they had opted out of the health insurance offerings — so the opt-out fee was not used to support their health care. The appeals court also rejected this argument, explaining that the statutory provision does not require that contributions be made for a particular employee’s benefits but “for employees” generally. And the opt-out fees, in this case, were used for employees who chose to participate in one of the available health plans.

No Deference Due on 20-Percent Cap

Finally, the plaintiffs asserted that the flexible benefits program was not a “bona fide” plan within the meaning of Sec 207(e)(4) because the flex credit exceeded 20 percent of the county’s total contributions for plan participants. In Flores, the appeals court had rejected a 20-percent ceiling requirement. In so doing, it declined to give deference to a U.S. Department of Labor (DOL) 2003 opinion letter supporting a 20-percent cap because the DOL had offered no rationale for adopting the ceiling.

In this case, the plaintiffs cited a (post-Flores) DOL 2019 Final Rule provision reaffirming the 20-percent cash contribution limit. The Ninth Circuit, however, found the Rule also was “undeserving of deference” as it was premised solely on the rejected 2003 opinion letter. Moreover, the decades-old opinion letter relied on the outdated, unduly narrow construction of FLSA exemptions that the U.S. Supreme Court expressly disapproved in its 2018 decision in Encino Motorcars, LLC v. Navarro.

At any rate, the appeals court found, the 20-percent cap applies to cash payments—not to the opt-out fees at issue here. The appeals court found that the net cash payments were under the 20% cap anyway.


Please contact a Jackson Lewis attorney if you have questions about the types of payments that must be included within the regular rate of pay for purposes of calculating overtime pay due under the FLSA.

The U.S. Department of Labor (DOL) has issued its long-anticipated proposed rule to increase the minimum salary requirements for the “white collar” exemptions (executive, administrative, and professional) from minimum wage and overtime pay requirements under the Fair Labor Standards Act (FLSA).

Under the proposed rule, the salary level for the white-collar exemptions to apply will increase from the current $684 per week ($35,568 per year) to $1,059 per week ($55,068 per year). That would be a 55% increase from the current level that became effective in January 2020 during the Trump Administration. The annual compensation level for highly compensated employees also will increase, by 34%, from the current $107,432 per year to $143,988 per year.

However, the DOL has indicated the actual salary threshold will be based on earnings data as of the date the final rule takes effect — which means that the salary floor may be even higher than the projected $55,068. That could lift the operative threshold to more than $60,000 annually.

For more on the proposed rule and anticipated legal challenges, click here.

A federal district court in Arizona held this week that courts are not required – or even authorized – to grant judicial approval of settlement agreements resolving individual claims brought under the Fair Labor Standards Act (FLSA), joining a growing number of courts calling into question the notion that private FLSA settlements require review and approval by either a court or the U.S. Department of Labor (DOL). Evans v. Centurion Managed Care of Ariz. LLC, 2023 U.S. Dist. LEXIS 139126 (D. Ariz. Aug. 9, 2023).


Under Section 216(b) of the FLSA, an employee may bring a private lawsuit in an appropriate state or federal court, either on an individual or collective (class) basis, and may recover both actual and liquidated damages, as well as attorney’s fees and costs. Alternatively, under Section 216(c), “[t]he [DOL] is authorized to supervise the payment of the unpaid minimum wages or the unpaid overtime compensation owing to any employee or employees … and the agreement of any employee to accept such payment shall upon payment in full constitute a waiver by such employee of any right he may have under [Section 216(b)] of this section to such unpaid minimum wages or unpaid overtime compensation and an additional equal amount as liquidated damages.”

Following the holding of Lynn’s Food Stores, Inc. v. U.S., 679 F.2d 1350 (11th Cir. 1982), for more than 40 years the majority of federal courts, including some other courts of appeal, have concluded that FLSA claims may be settled only through approval by either the DOL or after a court of competent jurisdiction reviews and approves the settlement for fairness. See, e.g. Samake v. Thunder Lube, Inc., 24 F.4th 804 (2d Cir. 2022).

More recently, however, an increasing number of federal courts are questioning whether such judicial or DOL approval is required, or even allowed.

The Tide Appears To Be Turning

More recently, however, an increasing number of federal courts are questioning whether such judicial or DOL approval is required, or even allowed. The court in Martinez v. Bohls Bearing Equipment Co., 361 F. Supp. 2d 608 (W.D. Tex. 2005), was one of the first to hold that, because the case involved a bona fide dispute as to overtime pay due, court approval of the agreement was unnecessary. The Fifth Circuit subsequently adopted this rationale in Martin v. Spring Break ’83 Prods., LLC, 688 F.3d 247 (5th Cir. 2012), concluding that the private settlement agreement of an FLSA dispute was binding and enforceable without court approval, when “predicated on a bona fide dispute about time worked and not as a compromise of guaranteed FLSA substantive rights themselves.”

A significant number of district courts have since concurred that judicial or DOL approval is not required for bona fide disputes of individual FLSA claims. See, e.g. Walker v. Marathon Petroleum Corp., 2023 U.S. Dist. LEXIS 130671 (W.D. Pa. July 28, 2023); Jackson v. Dovenmuehle Mortg., Inc., 2023 U.S. Dist. LEXIS 113086 (E.D. Wisc. June 30, 2023); Martinez v. Back Bone Bullies Ltd., 2022 U.S. Dist. LEXIS 45870 (D. Col. Mar. 15, 2022); Alcantara v. Duran Landscaping, Inc., 2022 U.S. Dist. LEXIS 122552 (E.D. Pa. July 12, 2022); Saari v. Subzero Eng’g, 2021 U.S. Dist. LEXIS 179054 (D. Utah Sept. 17, 2021).

The Evans Decision

Evans is the most recent opinion to cast doubt on this judge-made requirement, explaining that “although the Court has previously engaged in the process of approving settlements in individual FLSA actions, it now joins the growing number of courts that have concluded that judicial approval is neither authorized nor necessary in this circumstance.” As the court observed, the text of the FLSA “strongly suggests” that Congress did not intend for a judicial approval requirement. Moreover, the court rejected policy reasons cited by some courts in favor of requiring settlement approval, finding, if anything, that policy considerations weigh against imposing a judicial hurdle to resolving an FLSA dispute. The requirement merely “slows the resolution of FLSA settlements and, by extension, the payment of wages to plaintiffs,” noted the court.

The Takeaway

Unless and until the U.S. Supreme Court weighs in, or the federal courts of appeal come to a consensus, judicial or DOL approval of individual FLSA settlements will remain a requirement in some jurisdictions. However, in some jurisdictions that is no longer the case and neither the parties nor the courts will have to undertake the time and expense of obtaining approval for settling such disputes. As the court in Evans noted, the case involved an individual settlement. The court did not hold that judicial approval was unauthorized with respect to class/collective action settlements, which still generally require court approval.

For a more in-depth look at the changing legal landscape of judicial approval of FLSA settlements, see our Special Report, Has Lynn’s Food Grown Stale? Courts Increasingly Question Obligation to Review FLSA Settlements.

If you have any questions about the Evans case, the settlement of FLSA disputes in general, or any other wage and hour question, please consult a Jackson Lewis attorney.