Recently, the United States District Court for the Southern District of Illinois reviewed a dispute regarding a pharmaceutical company’s driver. In their ruling, they articulated the standard required for courts to approve settlement agreements under the Fair Labor Standards Act (“FLSA”). [i]

The Case

Plaintiff, a delivery driver filed her complaint on March 14, 2023, alleging defendants, the pharmaceutical company for which plaintiff made deliveries, misclassified plaintiff as an independent contractor and consequently violated various Missouri and federal laws. [ii] Plaintiff brought claims under both the FLSA and Missouri minimum wage laws.[iii] She further sought to certify a class of current and former drivers employed by defendants in Missouri.[iv] “Plaintiff sought a declaratory judgment that [d]efendants’ alleged practices are unlawful under Missouri minimum wage laws, and an award of unpaid minimum wages, overtime wages, reimbursement for expenses, liquidated damages, prejudgment and post-judgment interest, and attorneys’ fees and costs.” [v] Defendants denied any liability or wrongdoing. [vi] Nevertheless, to avoid the expense and risks of litigation, [d]efendants agreed to settle the lawsuit.[vii] As this was a settlement under the FLSA, the parties needed court approval.[viii]

The Outcome

The court approved the settlement agreement because it found that it reflected “a reasonable compromise of a bona fide dispute and is fair and reasonable.” [ix] “The Seventh Circuit has not addressed the question of whether stipulated agreements under the FLSA require court approval, but district courts in the Seventh Circuit routinely require such approval.”[x] A court should approve a settlement when the proposed settlement demonstrates reasonable compromise over the contested issues. [xi] The court relied on Farber v. Riestererblend, Inc. which stated, “[a] reviewing court normally approves a settlement where it is based on ‘contentious arm’s-length negotiations, which were undertaken in good faith by counsel’ and where ‘serious questions of law and fact exist such that the value of an immediate recovery outweighs the mere possibility of further relief after protracted and expensive litigation.’”[xii] Here, the court found the required factors had been met after reviewing the settlement agreement in camera.

Takeaway

The takeaway here is a simple one. When bringing a settlement for court approval under the FLSA, ensure that the settlement is a reasonable compromise of a bona fide dispute. Altogether, the settlement must be fair and reasonable.

Keep Reading

How I Use the Core Four as the Parent of Teenagers New Laws for The New Year – How To Stay on Santa’s “Good” List in 2026 A Spoonful of Error Makes the Verdict Go Down: The Importance of Contemporaneous Objections An Associate’s Day in the Life Let’s Not Get It On: Threshold Challenges in the Ed Sheeran Copyright Case Sweat the Small Stuff: How Early-Morning Exercise Strengthens Me Professionally The Life of an Appeal Tyson & Mendes Saves Clients $785,663,510 in 2025 Is New York Getting a Bad Faith Bill?

More by this author

“Building” a Better Plan for Design Professional Expert Witnesses: Theater Patrons Trapped in Elevators After Architect’s Failure Actions With Far-Reaching Consequences: Brody v. Hoch,  Non-Resident Jurisdiction, and the “Long Arm” of the Law Let’s Get Ethical! Amendments to Illinois Rules of Professional Conduct Intended to Guard Against Harassment and Discrimination... Duty of Care Ups and Downs: The Perils of a Parking Lot Gate Settling Under the FLSA Crash Course: Why Summary Judgment Misses the Mark in Illinois Multi-Cause Limousine Crash Collision To Defend and Indemnify, or Not to Defend and Indemnify Start Small, but Think Big: Attorneys’ Fees Can Add Up There’s No Such Thing as A Free Bite

Sources

[i] Frazier v. Omnicare, Inc., 3:23-cv-856-DWD, at 3 (S.D. Ill. 2024)

[ii] Id. at 1.

[iii] Id. at 1-2.

[iv] Id. at 2.

[v] Id.

[vi] Id.

[vii] Id.

[viii] Id.

[ix] Frazier v. Omnicare, Inc., 3:23-cv-856-DWD, at 3 (S.D. Ill. 2024)

[x] Mollett v. Kohl’s Corp., No. 21-CV-707- PP, 2022 WL 4641082, at *2 (E.D. Wis. 2022)

[xi] Frazier v. Omnicare, Inc., 3:23-cv-856-DWD, at 3 (S.D. Ill. 2024)

[xii] Farber v. Riestererblend, Inc., 1:22-CV-17-HAB, at 2 (N.D. Ind. 2022)