Cheeks v. Freeport Pancake House Inc.

Please Pass the Settlement: Second Circuit Widens Split Over Stipulated FLSA Dismissals

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A recently filed petition for certiorari asks the U.S. Supreme Court to clarify the procedural requirements for ending private causes of action under the Fair Labor Standards Act (“FLSA”).  Specifically, petitioner Dorian Cheeks is asking the Supreme Court to review a decision from the U.S. Court of Appeals for the Second Circuit holding that Federal Rule of Civil Procedure 41 (“FRCP 41”) prohibits the dismissal of FLSA claims through private, stipulated settlement agreements absent approval from either a federal district court or the U.S. Department of Labor (“DOL”).

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Second Circuit Speaks: No Private Settlements of FLSA Actions

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In Cheeks v. Freeport Pancake House, Inc., the Second Circuit held that without the approval of a district court or the U.S. Department of Labor, parties cannot secure a stipulation of dismissal with prejudice of an FLSA claim under Federal Rule of Civil Procedure 41(a)(1)(A)(ii).  In practice, this holding will prevent parties to an FLSA litigation – where there is a bona fide dispute as to liability – from reaching a privately negotiated settlement that includes a joint stipulation of dismissal of the case.

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