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Reviewed Date: September 11, 2017
Personnel--Fair Labor Standards Act
Personnel--Laws and regulations
MTAS was asked whether as part of a settlement of an FLSA claim, an employee can sign an enforceable waiver of rights.
Knowledgebase-FLSA Claims In connection with the FLSA questions you had relative to your city, this question arose: As part of a settlement of an FLSA claim, can an employee sign an enforceable waiver of rights? The answer is no with respect to privatewaivers, but yes with respect to DOL-approved waivers. That is true both as to any back overtime pay owed, and as to the liquidated damages to which the employee is entitled under the FLSA (an amount equal to the back overtime pay owed). [See Brooklyn Savings Bank v. O’Neil, 324 U.S. 697 (1945), and Schulte, Inc. v. Gangi, 328 U.S. 108 (1946).] There is also a Sixth U.S. Circuit case bearing indirectly on this question. In Runyan v. National Cash Register Corp., 787 F.2d 1039 (6th Cir. 1986), a high-ranking lawyer signed a broad waiver of rights as a part of an employment termination settlement with his employer. He subsequently challenged his termination on the ground of age discrimination, and argued that his waiver was invalid under the Age Discrimination in Employment Act (ADEA). Under the ADEA Congress incorporated the enforcement provisions of the FLSA. The District Court rejected his argument, a Sixth Circuit Panel reversed the District court, and the Sixth Circuit en banc reversed the panel, upholding the waiver. The Court discussed and distinguished Brooklyn Savings Bank and Schulte, above, pointing to the different purpose of the ADEA and the FLSA, with the latter being more geared toward the protection of low-ranking employees. Needless to say, the lawyer in this case did not qualify as such an employee. But what is clear from Runyon, that where the application of the FLSA to municipal employs is at issue, the Sixth Circuit (as might be expected) would follow Brooklyn Savings Bank and Schulte on the proposition that private waivers of rights to back overtime compensation are not binding. But the DOL has the right to obtain from an employee an agreement to make back overtime payments to employees, and any agreement obtained by the DOL operates as a waiver of any further rights, but only for the period covered by the agreement. 29 U.S.C. § 216(c) provides that:The Secretary is authorized to supervise the payment of the unpaid minimum wages or the unpaid overtime compensation owing to any employee or employees under section 206 or section 207 of this title, and the agreement of any employee to accept such payment shall upon payment in full constitute a waiver by such employee of any right he may have under subsection (b) of this section to such unpaid minimum wages or unpaid overtime compensation and an additional equal amount as liquidated damages.
Subsection (b) referred to above, provides that:Any employer who violates the provisions of section 206 or 207 of this title shall be liable to the employee or employees affected in the amount of their unpaid minimum wages, or their unpaid overtime compensation, as the case may be, and in an additional equal amount in liquidated damages... Let me know if I can help you further in this or any other matter. Sincerely, Sidney D. Hemsley Senior Law ConsultantSDH/