Navigating the Right Path to Collective Action Settlements Under the Fair Labor Standards Act
Contributor Margaret Allen covers three key issues that employers should consider when negotiating and seeking approval of FLSA settlements.
October 14, 2020 at 07:54 PM
6 minute read
Just like other types of class actions, most lawsuits under the Fair Labor Standards Act settle. FLSA settlements have received increased scrutiny by courts in recent years and pose unique challenges given the differences between FLSA collective actions and Rule 23 class actions. This article covers three key issues that employers should consider when negotiating and seeking approval of FLSA settlements.
Key Consideration 1: FLSA collective actions cover only employees who opt in.
The primary distinction between group claims under the FLSA versus Rule 23 is that group claims under the FLSA are collective actions, not class actions. While collective actions share some similarities to Rule 23 class actions, the biggest difference is that FLSA collective actions are "opt in" actions, which require an employee to file a consent form to "opt in" to the lawsuit.
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