A Third Circuit ruling that the Fair Labor Standards Act's collective action opt-in mechanism is silent about the release of unasserted claims by opt-out class action members will make it easier to settle cases containing claims under both federal and state wage and hour laws, attorneys said.
Thursday's panel ruling in Graham Lundeen v. 10 West Ferry Street Operations LLC , a conditionally certified collective action and proposed class action alleging tipped wages violations, addressed whether a settlement can release the claims of not only FLSA opt-in collective members but also opt-out state law class members. The panel departed from a lower court by finding that the FLSA doesn't necessarily restrict settlement of opt-out members' claims.
"What this decision does is it just removes one potential issue that courts otherwise might have felt they needed to clear up or otherwise might have felt would give them pause about a proposed settlement of a litigation with that hybrid feature," said Allison Powers of management-side firm Blank Rome LLP. "It just streamlines settlements and makes it easier, I think, for courts to run through their fairness analysis."
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"3rd Circ. Streamlines Hybrid Wage Class Action Settlements," by Max Kutner was published in Law360 Employment Authority on October 17, 2025.
