## Facts

- Candace Nall worked for Mal-Motels, Inc. as a front-desk clerk and night auditor, including from August 2008 to February 2010.
- After initially using a time clock, the owner, Mohammad Malik, directed Nall to stop clocking in and instead report hours orally; the employer kept no contemporaneous records of actual hours worked.
- Nall alleged she regularly worked over 40 hours per week without overtime pay and sought unpaid overtime plus liquidated damages under the Fair Labor Standards Act (FLSA).
- Nall filed an FLSA lawsuit in federal court through counsel in March 2010.
- Malik contacted Nall directly, outside counsel’s presence, and proposed payment (check plus cash) if she signed a voluntary dismissal and a letter to her lawyer stating the case had settled.
- Nall signed documents she did not read, citing financial desperation; a voluntary dismissal was filed.
- The district court refused to accept the voluntary dismissal because Nall was represented and had not obtained leave to proceed pro se.
- Defendants moved to enforce the settlement; over Nall’s objections, the district court approved the settlement as fair and dismissed the case with prejudice.

## Issues

1. Whether a private settlement of an FLSA wage claim reached without Department of Labor supervision can be approved and enforced when the employee opposes enforcement.
2. Whether a district court’s order enforcing a disputed FLSA settlement qualifies as a “stipulated judgment” sufficient to validate the settlement.

## Decision

- The Eleventh Circuit vacated the order approving/enforcing the settlement and remanded.
- Because the agreement was not supervised by the Secretary of Labor, it could be valid only if embodied in a court-approved stipulated judgment.
- The judgment entered was not “stipulated” because Nall opposed enforcement when the court acted; the district court therefore erred in approving and enforcing the settlement and dismissing the complaint.

## Legal Principles

- FLSA wage claims generally may be settled only through (1) Department of Labor supervision under 29 U.S.C. § 216(c), or (2) a court-approved settlement entered as a stipulated judgment after judicial review for fairness.
- A “stipulated judgment” requires actual, current assent by both parties when the court is asked to enter judgment; an order entered over a party’s objection is not stipulated.
- Limits on waivers and settlements of FLSA rights apply to former employees as well as current employees; the policy concerns about unequal bargaining power and coerced or uninformed waivers are not confined to ongoing employment.

## Conclusion

The Eleventh Circuit held that an opposed, privately negotiated FLSA settlement cannot be enforced through judicial approval unless it is presented as a true stipulated judgment (or is supervised by the Department of Labor), and it vacated the dismissal for further proceedings.


Nall v. Mal-Motels, Inc., 723 F.3d 1304 (11th Cir. 2013)