October 17, 2025
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.
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Rebecca Ojserkis of worker-side firm Cohen Milstein Sellers & Toll PLLC said the ruling embraces hybrid actions involving parallel federal and state law claims.
“The ruling boils down to the idea that workers can bring parallel FLSA and state wage and hour law claims, and they can settle them both at the same time,” she said.
Generally, had the Third Circuit panel reached the opposite conclusion, an “employer would not be getting final closure,” she said.
“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.”
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Ojserkis also said settlement approval still isn’t guaranteed.
The Third Circuit’s direction, she said, is “not quite a blank check.”
Read 3rd Circ. Streamlines Hybrid Wage Class Action Settlements.