In a span of just two short weeks late last year, three decisions by federal judges in Connecticut provided important lessons on the terms and conditions necessary to settle wage and hour cases brought under the Fair Labor Standards Act.
In the first ruling, the judge rejected a proposal submitted by the parties, after engaging in mediation, to settle a case privately without recording the settlement on the public docket. Citing other decisions by judges in Connecticut and neighboring states, he said that because the FLSA requires approval of settlements by the court, there was a strong presumption in favor of public access to the terms, notwithstanding the preference of the parties.
Two weeks later, after the parties had filed their settlement agreement, the same judge refused to approve it, citing three reasons. One, the agreement contained a release clause that went beyond the claims that were asserted in the suit. Two, it included a confidentiality agreement that prevented the plaintiff from discussing the settlement, which violated the principle discussed in his previous ruling. Three, the agreement failed to detail the employee’s alleged damages, which meant the judge had no way of determining whether the settlement amount was reasonable under the circumstances.
In the week between those two rulings, another federal judge refused to approve a settlement between a Fairfield home care agency and a live-in caregiver, who it had impermissibly paid on a per diem basis rather than an hourly rate. Once again, the judge’s reason was that the agreement contained provisions regarding release of claims that were broader than the allegations in the lawsuit, and a class action waiver broader than that permitted by precedent.