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.
Second Circuit Speaks: No Private Settlements of FLSA Actions
