Historically, when the parties settle an employment-related matter, the employer has obtained a “Full and Complete Release of All Claims,” sometimes referred to as a global release. This release has normally included a confidentiality provision and a provision that the former employee will not seek reinstatement or reemployment with the employer. This has occurred even in workers’ compensation cases where separate side-releases are included to prohibit the employee from filing claims or seeking re-employment based on the Americans’ with Disabilities Act and the Florida Human Rights Act.

Settlement Agreements in employment cases have rarely ever been required to be approved by the courts. Instead, the parties reach a private settlement and a Stipulation for Dismissal of the lawsuit is filed.

Wage hour cases filed under the Fair Labor Standards Act (“FLSA”) are different. Based on an Eleventh Circuit decision, Lynn’s Foods, and other cases, wage hour settlements require court approval. Without court approval, the employer runs the risk of the employee re-filing suit and seeking additional claims based on the FLSA after a settlement is reached.

In an Order entered by U. S. District Judge Steven Merryday with the U.S. District Court for the Middle District of Florida, “global releases” of all claims against an employer as a part of a wage hour case settlement will not qualify for court approval. In Royster v. Regions Bank, Judge Merryday rejected a Settlement Agreement that contained a requirement that the employee keep the settlement amounts confidential. In addition, in a separate opinion, Judge Merryday rejected the requirement of a global settlement agreement in a wage hour case.

Employers and employee/plaintiffs and their counsel should be aware of the developing law in the area of settlement of wage hour litigation.