Third Circuit Green Lights "Hybrid" Class Action Settlements That Release Unasserted FLSA Claims

Duane Morris Takeaways: In Lundeen v. 10 West Ferry Street Operations, LLC, No. 24-3375 (3d Cir. Oct. 16, 2025), the U.S. Court of Appeals for the Third Circuit held that the opt-in requirement set forth in Section 216(b) of the federal Fair Labor Standards Act ("FLSA") does not prohibit plaintiffs in a class action from settling prospective class members' unasserted FLSA claims as part of an opt-out class settlement. In a precedential and unanimous opinion, the Third Circuit concluded that Section 216(b) establishes only the mechanism by which FLSA claims may be litigated, not the conditions under which they may be released. The decision is welcome news for both plaintiffs and defendants, as the case makes it easier for parties to settle "hybrid" cases asserting claims under both federal and state wage-and-hour laws.