Legal fees can put a large and often untimely cost of small businesses. One particular topic we highlight today involves a recent ruling by the Fifth Circuit U.S. Court of Appeals (with jurisdiction over Louisiana, Mississippi, Texas) which enforces the private FLSA settlement. For the uninitiated, the Fair Labor Standards Act (FLSA) establishes minimum wage, overtime pay, recordkeeping, and youth employment standards affecting employees in the private sector and in Federal, State, and local governments. Covered nonexempt workers are entitled to a minimum wage of not less than $7.25 per hour effective July 24, 2009. Overtime pay at a rate not less than one and one-half times the regular rate of pay is required after 40 hours of work in a workweek, all according to the Department of Labor. John Thompson is a partner in the Atlanta office of the law firm Fisher & Phillips continues:

 Ruling's Effect Is Limited

This decision is good news, but employers should not take it to mean that private waivers or releases of FLSA claims will now be routinely and broadly enforced or observed.  For one thing, while other jurisdictions might decide to follow the Fifth Circuit's lead, only time will tell whether and to what extent this will happen.  It is also questionable whether the U.S. Labor Department will defer to such settlements.

Moreover, the court did NOT rule that employees can privately waive or release the legal rights provided for in the FLSA.  For example, a court is highly unlikely to enforce an agreement:

• Calling for a non-exempt employee to receive FLSA overtime pay for only 50% of his or her accurately-recorded hours worked over 40 in a workweek,
• Acquiescing in an FLSA overtime multiple of, say, 1.25 (instead of 1.5) for a non-exempt, hourly-paid employee's hours worked over 40 in a workweek, or
• Based upon a construction electrician's supposedly having qualified for the FLSA's "professional" exemption.

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