October 21, 2026
Federal courts in the Third Circuit are more readily approving hybrid settlements a year after a panel found that the Fair Labor Standards Act’s opt-in requirement does not prohibit the release of unasserted FLSA claims as part of opt-out class settlements under state wage laws, attorneys said.
Last Friday marked one year since the decision in Lundeen v. 10 West Ferry Street Operations LLC, a tip-pooling case involving proposed collective action claims under the FLSA and proposed class action claims under the Pennsylvania Minimum Wage Act.
The panel found that Section 216(b) of the FLSA sets up a private right of action for workers and requires employees to formally opt in to become a party in a case but stops short of addressing the release of unasserted claims.
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Rebecca Ojserkis of worker-side firm Cohen Milstein Sellers & Toll LLP told Law360 last year, following the ruling, that if the Third Circuit panel had reached the opposite conclusion, an employer would not begetting closure.
“My guess is their willingness to settle or the amounts for which they might settle might look very different if they weren’t getting a global release,” she said. “A contrary decision might have discouraged filing hybrid actions.”