• January 22, 2014

Last week, Minnesota Litigator had a post about the failure of a company’s non-compete when it was put to the test of judicial scrutiny.

A recent case from the U.S. District Court for the Western District of Missouri (relevant to Minnnesotans because that district and the District of Minnesota fall under the same U.S. Court of Appeals (the 8th Circuit)) again highlighted the fact that there are particular issues in the employment context, which lawyers who focus on employment law should know while many others will not.

A plaintiff former employee brought suit against his former employer.  They negotiated a settlement and, as in most civil litigation, they simply entered into an agreement to dismsis the lawsuit in light of the settlement.  This, the U.S. District Court (U.S. Dist. Ct. Judge Greg Kays (W.D. Mo.)) was improper.

Concerned that settlements made by employees releasing their right to unpaid wages and liquidated damages were not the product of negotiation between equals and did not arise from bona fide disputes, the Supreme Court and federal courts of appeal have restricted litigants’ ability to settle FLSA disputes without court approval.

There are good reasons for requiring judicial oversight of private settlements of FLSA claims. Private FLSA settlements are often negotiated with confidentiality provisions that aim to prevent other employees whose FLSA rights may have been violated from learning of the settlement and seeking the same relief. …Of course, whether the Court or the parties agree with Congress’s decision to make FLSA claims non-waivable is immaterial. The law of the land is that FLSA claims are not waivable. … Accordingly, the Court holds it cannot dismiss any of the Plaintiff’s claims with prejudice unless it reviews the proposed settlement.

In the larger scheme, this “glitch” in this particular case may have no ramifications or impact on the parties, simply requiring an additional step by counsel to dispose of the case.

Having said that, no one will dispute that a single lawyer cannot be a one-stop shop for appeals, bankruptcy, business law, commercial litigation, business organizations, condemnation law, divorce law, education law, employment law, estate planning, intellectual property law, mergers & acquisitions, probate, construction, real estate, social security disability, and worker’s compensation.  The harder question, for the future of law, is whether a single law firm can.

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