Defense lawyers are welcoming the decision in Martin v. Spring Break Productions, LLC, No. 30671 (5th Cir. 6/24/12). The decision, says Mike Maslanka and Russ Cawyer, allows an individual claimant to settle his/her FLSA claim. Until this decision was issued, the most common belief that an individual employee could settle a wage claim only with court or Department of Justice approval. With this ruling, as Mike says, the courts are treating employees like adults and letting them settle claims on their own. But, is that really what the decision says?
The case concerns some members of a union who worked on a movie set in Louisiana. They filed a claim through their union for non-paid wages. They worked on a movie called Spring Break ’83, which has not yet been released. The union negotiated a settlement with the producers in November, 2009. But, before signing the settlement agreement, the claimants filed suit in June, 2009 in California via privately hired lawyers. The trial judge granted summary judgment because of the settlement agreement. The employees filed suit, saying the settlement agreement was not approved of by the DOJ. Therefore, said the employees, the settlement agreement was not valid.
The Fifth Circuit in this decision affirmed the summary judgment, finding that there was a bona fide dispute regarding the rate of pay and the compensation owed. The court distinguished a contrary holding from the 11th Circuit, finding that decision concerned a DOJ investigation. The court concluded that here, the employees were represented by their union. They were also represented by private counsel in California prior to the settlement agreement.
The union did not waive their FLSA rights, but did arrive at a negotiated agreement. In fact, the employees received settlement checks and cashed them while their lawsuit was pending. Their lawsuit was for additional claimed compensation.
The point of requiring DOJ approval is to equalize the playing field between employee and employer. The playing field is more level when a union is involved. I think it more likely that this decision will be limited to those few situations when a union member has a bona fide dispute regarding the compensation owed. It is a stretch to now claim that all employees can settle their wage claims without DOJ or court approval. See the Martin decision here.