Many employers attempt to escape future liability from their employees by requiring them to enter into a “general release” of claims. This is to prevent an employee from bringing a future lawsuit against the employer for conduct that occurred prior to the signing of the release.
Employers typically require employees to sign such releases when they settle a narrow claim with an employee. For example, if an employee suffers an on-the-job injury, as part of the settlement of personal injury/worker’s compensation claim, the employer will require the employee to waive all other potential claims to date, even if they are unrelated to the injury. Additionally, when an employee is terminated or laid off and an employer provides a severance package, in exchange an employer often requires a general release of claims as part of the severance agreement.
While general releases are enforceable with regards to many potential future claims, they are not necessarily enforceable for claims for unpaid overtime wages under the Fair Labor Standards Act (“FLSA”). This is because settlements for federal unpaid overtime claims typically must be approved by a court or the Department of Labor. Lynn’s Food Stores, Inc. v. U.S., 679 F.2d 1350, 1355 (11th Cir. 1982). Thus, in order for a release of unpaid overtime claims under the FLSA to be enforceable, the settlement must be explicitly related to the employee’s claims for unpaid overtime for which Bodle v. TXL Mortg. Corp., 788 F.3d 159, 165 (5th Cir. 2015) set precedent. In Bodle, two employees and an employer resolved a state-law non-compete dispute and, as part of that settlement, the employees entered into general releases. Id. The employees thereafter brought a second suit for unpaid overtime wages under the FLSA. Id. The Fifth Circuit stated that because the prior settlement did not involve a bona fide dispute with regards to hours worked and compensation owed, the prior settlement did not release the employees’ overtime claims under the FLSA. Id. Specifically, the Court held that “where overtime pay was never specifically negotiated, there is no guarantee that the plaintiffs have been or will be compensated for the overtime wages they are allegedly due under the Act.” Id.
Therefore, even if you signed a general release of claims with your employer, you likely still have the right to assert claims for unpaid overtime wages under the FLSA. If you have any questions about this whether you deserve back pay despite an agreement you reached with your employer, or other employment-related issues, do not hesitate to call Shavitz Law Group at (800) 616-4000.
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Gregg Shavitz, Shavitz Law Group, 951 Yamato Rd Ste 285, Boca Raton, FL and 800 3rd Ave, Suite 2800, New York, NY. Lawyers licensed in states including FL, NY, NJ, and TX. The choice of a lawyer is an important decision and should not be based on advertisements alone.