Takeaways

• In Lundeen v. 10 W. Ferry St. Operations, the court held that in settling a Rule 23 class action, plaintiffs can waive the FLSA rights not asserted by class members.
• Employers litigating in Delaware, New Jersey, Pennsylvania, and the U.S. Virgin Islands may be able to settle “hybrid” actions with some assurance that class members who did not opt into the FLSA case cannot later seek further relief for alleged wage and hour violations.
• The holding applies only to settlements in federal courts within the Third Circuit. No other federal appeals court has addressed this issue head-on. Employers should be aware of the jurisdictional landscape and the potential for a different outcome depending on the forum.

• Lundeen v. 10 W. Ferry St. Operations LLC

Issuing a landmark decision in a case of first impression, the U.S. Court of Appeals for the Third Circuit has clarified the relationship between federal claims brought under the Fair Labor Standards Act (FLSA) and state law claims under Rule 23 of the Federal Rules of Civil Procedure. In an Oct. 16, 2025, decision, the court held that the FLSA’s opt-in provision does not prevent named plaintiffs in a class action from including unasserted FLSA claims of potential class members in a Rule 23(b)(3) opt-out class settlement. Lundeen v. 10 W. Ferry St. Operations LLC, No. 24-3375, 2025 U.S. App. LEXIS 26901 (3d Cir. 2025).

The Third Circuit has jurisdiction over federal courts in Delaware, New Jersey, Pennsylvania, and the...

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