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ARTICLE · 19 DECEMBER 2016

‘Cheeks': Restricting Private Settlements Under Fair Labor Standards Act

Many litigants are understandably reluctant to publicly disclose the terms of their settlement agreements.

United StatesEmployment and HR

Many litigants are understandably reluctant to publicly disclose the terms of their settlement agreements. An August 2015 decision by the U.S. Court of Appeals for the Second Circuit, Cheeks v. Freeport Pancake House, 796 F.3d 199, 2015 U.S. App. LEXIS 13815 (2d Cir. 2015), nonetheless prevents parties from voluntarily entering into private settlements of claims under the Fair Labor Standards Act (FLSA) in New York's federal district courts.1 This article discusses certain district court decisions construing Cheeks and strategies employers have utilized in response to it.

Until Cheeks, if a wage-and-hour case was settled at a conference before one of the district courts within the Second Circuit, the parties could finalize a written settlement agreement and simply submit a stipulation of dismissal for the court's endorsement, or agree to place the material terms of their settlement on the record, which would often include, inter alia, a requirement that the parties

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