New Jersey Federal Court standard for approval of FLSA settlement.
The plaintiffs brought a collective action under both the FLSA and the NJWHL, alleging that they were forced to “work off-the clock.” After extensive litigation, the parties reached a tentative settlement. The district judge noted that, while the Third Circuit has yet to determine whether judicial approval of an FLSA settlement is required, the district courts in New Jersey have concluded that such approval is required . The district courts in New Jersey have adopted the standard set forth by the 11th Circuit in Lynn’s Food Stores, Inc. v. U.S. ex rel U.S. Dep’t of Labor, which makes the threshold question whether the action concerns a bona fide dispute and, if so, whether the settlement is fair and reasonable. In evaluating whether the settlement is fair and reasonable, the court must determine if the compromise is fair to the employee and whether the settlement would frustrate the implementation of the FLSA.
Case Law Alerts, 2nd Quarter, April 2020 is prepared by Marshall Dennehey Warner Coleman & Goggin to provide information on recent developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. Copyright © 2020 Marshall Dennehey Warner Coleman & Goggin, all rights reserved. This article may not be reprinted without the express written permission of our firm.