When the U.S. Court of Appeals for the Second Circuit issued the Cheeks v. Freeport Pancake House1 decision in August 2015, a new era emerged in settlements under the Fair Labor Standards Act (FLSA) in New York. In sum, Cheeks held that run-of-the-mill individual and multi-plaintiff wage and hour settlement agreements, even prior to class or collective action certification and after contested settlement negotiations, through counsel, must be court-approved2 prior to dismissal under Federal Rule of Civil Procedure (FRCP) 41(a)(1)(A). At that time, how Cheeks would affect day-to-day FLSA cases was a mystery. What was clear was that the lawyers and judges in the Second Circuit would soon be dealing with the growing pains of Cheeks.
Now, around 18 months later, we know more about navigating Cheeks and what settlement terms will generally pass muster. With wage and hour litigation comprising an ever-larger proportion of the federal docket,3 and the overwhelming majority of those settling, it is critical to know what settlement terms will and will not be approved.
