Cheeks v. Freeport Pancake House, Inc.
796 F.3d 199 (2d Cir. 2015)
United States Court of Appeals, Second Circuit · August 7, 2015
What the court decided
Parties cannot settle a filed Fair Labor Standards Act case by private stipulated dismissal with prejudice; the district court or the Department of Labor must approve it. The court read the FLSA into Rule 41’s "applicable federal statute" exception because of "the unique policy considerations underlying the FLSA."
Who won
The employee won the procedural point. The Second Circuit answered the certified question in his favor, so the parties’ private settlement could not end the case without judicial review.
Why it matters for salespeople
Know the limit of this case before relying on it. Cheeks is about dismissing a filed lawsuit, not about a severance agreement signed before anyone sues. For a pre-suit release the governing authority is older: an employee cannot waive FLSA liquidated damages or privately settle whether the FLSA covers them at all, and whether a genuine dispute over hours or rate can be settled privately is a question Cheeks expressly left open.
Key passage: 796 F.3d 199 (2d Cir. 2015) at 203-04, 206.
Read the decision (PDF) Marked with official reporter pages for citation.
Source of the text: United States Court of Appeals for the Second Circuit (official slip opinion) — https://ww3.ca2.uscourts.gov/decisions/OPN/14-299_opn.pdf. This page summarizes the decision in plain language; the court’s own words are in the PDF above.