Seyfarth Synopsis: The Third Circuit held that Section 216(b) of the FLSA does not prohibit the release of FLSA claims in an opt-out class-action settlement.
Seyfarth Synopsis: The Third Circuit held that Section 216(b) of the FLSA does not prohibit the release of FLSA claims in an opt-out class-action settlement.
Settling "hybrid" cases in the Third Circuit just became easier for parties asserting claims under both federal and state wage-and-hour laws.
By way of background, the FLSA provides, in relevant part, that "[n]o employee shall be a party plaintiff to [a FLSA action] unless he gives his consent in writing to become such a party and such consent is filed in the court in which such action is brought." 29 U.S.C. § 216(b). Thus, similarly-situated employees do not become plaintiffs in a FLSA case unless they file a consent in writing affirmatively agreeing to become a party-plaintiff. In contrast, in a certified class action under Rule 23 of the Federal Rules of Civil Procedure, class members are part of the class unless they opt out of the litigation.
The opt-in requirement of the FLSA has led some district courts to conclude that, while state wage-hour claims may be released pursuant to Rule 23's opt-out procedures (and, thus, typically a large portion of the relevant employee population will be bound by the settlement, because people tend not to opt out of class-action settlements), FLSA claims cannot be released through an opt-out mechanism. Rather, only those...
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