Section 216(b) of the FLSA “establishes only the mechanism by which FLSA claims may be litigated, not the conditions under which they may be waived.”
Vacating a district court’s denial of the preliminary approval of a negotiated settlement between restaurant employees and their employer with regard to tip pooling, the Third Circuit found that the FLSA’s opt-in requirement does not prohibit named plaintiffs in a class action from settling prospective class members’ unasserted FLSA claims as part of an opt-out class settlement under Rule 23(b)(3).The court determined that there was nothing in the statutory language of Section 216(b) that addressed the release of unasserted claims. However, while Section 216(b) does not forbid the release of unasserted FLSA claims in opt-out settlements, such releases remain relevant to the court’s overall Rule 23(e)(2) analysis, which the district court is required to consider on remand (Lundeen v. 10 West Ferry Street Operations LLC, No. 24-3375 (3d Cir. Oct. 16, 2025)).
The employer in this case operates a restaurant and bar. The restaurant’s bartenders contributed to a tip pool which was distributed proportionally among them. The named plaintiff in this action alleged that a bar manager, who was a salaried supervisory employee, also received distributions from that tip pool.
Lawsuit. In January 2024, the named plaintiff filed this action on behalf of himself and other similarly situated employees. He asserted violations of the FLSA and...
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