Businesses in Philadelphia, Pittsburgh and throughout Pennsylvania, in general, are seeing a surge in employee complaints seeking relief under the Fair Labor Standards Act. The FLSA, a long-existing federal law, establishes guidelines for minimum wage, overtime pay and record-keeping, among other rules involving how employees are treated. Although a single individual can bring a claim, wage and hour disputes often evolve into class or collective action lawsuits, which involve multiple employees.
Often, employers who may have unintentionally violated the law or believe there was a proper exemption in the law that would exonerate them, seek a settlement agreement with the aggrieved employees to expedite the matter and save costs for both sides. For many years, a private settlement had to be approved by the Department of Labor or a court, but a recent case has established a new perspective. This opinion from the 5th Circuit Court of Appeals provides that settlements or releases are now acceptable mechanisms to settle FLSA disputes.
The case involved a union member who personally did not agree to or sign an agreement made between the employer the union. The court reasoned that because the settlement included back-pay for the union members, their claims were not waived but, instead, validated. This approach provides more flexibility to parties in the effort to reach a mutual settlement in their dispute and avoid unnecessary litigation.
FLSA cases involving wage and hour disputes are complex and can be costly. Liquidated damages can be awarded for double the amount of actual damages in addition to attorneys’ fees and costs. An experienced wage and hours disputes attorney might be able to sort out the rights and responsibilities of the parties if a suit is filed and can offer guidance and advice in the manner in which a business can be run to reduce the risk of future litigation to the extent possible.