Another drawback is that employees may choose to decline the settlement under PAID and pursue litigation against an employer. The PAID program presents employers with an interesting opportunity to address wage violations.
This program can provide benefits to both the employer and the employee. If you have questions regarding whether getting PAID is right for you, please contact an employment law attorney at Mesch Clark Rothschild.
If you have any questions, contact an employment law attorney at Mesch Clark Rothschild. But on the exact same day they settled the state court litigation, Bodle and Meech turned around and sued TXL and its president, William Dale Couch, in federal court under the FLSA, claiming they were owed overtime pay. The trial court dismissed the case on the basis of the release, relying on Martin. But unlike Martin , the state court action in Bodle was not about a wage-hour dispute at all.
It was a dispute over restrictive covenants. In settlements reached outside of court a broad general release may have the prophylactic effect of giving employees a sense of closure, meaning they are less likely to pursue additional claims. Perhaps the most powerful strategy courts are using is to compare the settlement terms to the claims made in the complaint. Courts, though, are asking for the recipes and holding attorneys accountable for what they place on the plate. Sometimes there are good and valid reasons for compromising or abandoning claims.
For example, if the potential exposure is so great that it would force a business to close; or if there are significant legal issues that might swing the exposure between two extremes, a compromise is in order. This can easily happen, especially where a short-term employee brings FLSA claims on behalf of a collective group without realizing the extent of prior turnover or that prior time and pay records may no longer exist.
So what was thought to be a small case is materially larger. Imagine further that, in the same case, it is alleged that the employer failed to provide employees with the wage notice required by the New York Wage Theft Prevention Act. A settlement is negotiated where the wage notice claim is being settled for zero, as the employer demonstrated that it did, in fact, provide the required notices.
Here, the judge might ask how such a claim came to be filed on behalf of a class in the first place. If not, the threat of sanctions looms. Next, assume that the remaining claims are being settled for a sum-certain. More often, judges are requiring the attorneys to disclose the range of exposure best case and worst case scenarios and to explain the negotiation process — the making of the sausage — that led to agreement on terms.
This is not to suggest that wage and hour settlements are conspiratorial. The most effective tool is to settle before a United States Magistrate Judge, which is always an option available to litigants in federal court. Since the court is essentially overseeing and participating in the settlement process, it stands to reason that approval will be granted.
Private mediators may also be used; the concept being that a well-established and highly regarded mediator lends an imprimatur of integrity to the settlement process and provides the type of oversight intended to impress the court that the settlement is fair and reasonable. We have yet to see a case where a court has requested more information from or about the mediator.
The Fourth Circuit and other appellate circuits have upheld the validity of this regulation. However, last week the Fifth Circuit, in Bodle v. TXL Mortg.
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