The Limits of Comprehensive Peace: The Example of the FLSA

Source: Lonny Hoffman, Christian J. Ward, Yetter Coleman, University of Houston Law Center No. 2016-A-19, August 6, 2016

From the abstract:
Normally, cases can be settled on broad terms that release all related claims. Although there are added protections that must be satisfied when a settlement is proposed in the class action context (which are provided by insisting on judicial approval of the proposed deal), even then the class representatives and defendant can usually agree to compromise the class’s ability to later bring all transactionally-related claims. But how should the law deal with cases that involve multiple claims with different claim-vindication procedures? In this paper we consider the FLSA, which is one of the most important examples of such a law. For decades, courts have consistently held that workers aggrieved by an employer’s statutory violations may not use modern opt-out class action procedures to vindicate their rights. A frequently litigated, but unsettled question is whether a class action brought alleging state law wage and hour claims can be settled on terms that require absent class members to release both state and federal claims, even though the federal claims could not have been asserted through the class suit. We argue that this form of settlement is not permitted by the statutory text and that our construction is consistent with the legislative history.