182 | Massachusetts Wage & Hour Peculiarities, 2025 ed. © 2025 Seyfarth Shaw LLP H. Settlement Federal law prohibits purely private settlements of wage claims because employees may not waive their wage and hour rights.1140 Under the FLSA, parties can enter into a settlement agreement if a court or the DOL supervises the agreement.1141 Because Massachusetts law has no similar requirement, private settlements of state claims are allowed. However, to be valid, a waiver and release of wage claims under Massachusetts law must be knowing and voluntary and must contain express language that Wage Act claims are being released.1142 Further, where both Massachusetts and federal wage and hour claims are at issue, employers must still be mindful of the federal requirements for private settlements. If an employer uncovers a wage and hour violation, through an internal audit or other means, the employer has various options, each of which carries its own risks: The employer could pay any affected employee the additional wages due as a result of the error and forego obtaining a release of claims. Settling or providing pay without a release leaves the employer exposed to future claims and civil citations from the Office of the Attorney General.1143 The employer could voluntarily report the violation to the DOL and request that the agency facilitate a settlement with a release of claims. Self-reporting to the DOL risks a broader and more expensive audit and exposure if other violations are uncovered. The employer and employee could agree to simultaneously file with the court a complaint and notice of settlement to obtain a court-supervised settlement with a release of claims. Filing a complaint with the court is more procedurally complicated and potentially expensive, and it usually requires that the employee have his or her own attorney, which may invite further litigation. 1140 See, e.g., Brooklyn Sav. Bank v. O’Neil, 324 U.S. 697, 704 (1945) (holding that FLSA claims may not be waived because “[w]here a private right is granted in the public interest to effectuate a legislative policy, waiver of a right so charged or colored with the public interest will not be allowed where it would thwart the legislative policy which it was designed to effectuate”). 1141 29 U.S.C. § 216(c). Regarding judicially supervised settlements, the U.S. Supreme Court has distinguished between unsupervised settlement agreements and stipulated agreements. D.A. Schulte, Inc. v. Gangi, 328 U.S. 108 (1946). Subsequent federal court decisions have upheld stipulated judgments releasing FLSA claims when those judgments were court-supervised and scrutinized for fairness to the employee. See, e.g., Lynn’s Food Stores, Inc. v. United States, 679 F.2d 1350, 1353 (11th Cir. 1982) (“When employees bring a private action for back wages under the FLSA, and present to the district court a proposed settlement, the district court may enter a stipulated judgment after scrutinizing the settlement for fairness.”). 1142 Crocker, 464 Mass. at 14-15. The SJC explained in Crocker that the “release must be plainly worded and understandable to the average individual, and it must specifically refer to the rights and claims under the Wage Act that the employee is waiving.” Id. at 14. But see Brennan v. IQVIA Inc., Civ. No. 20-cv-12230-IT, 2021 WL 1026717, *5 (D. Mass. Mar. 17, 2021) (a general release in a severance agreement which referred to claims for unpaid wages is insufficient to release commission claims where “the Severance Agreement was a standard form agreement offered by Defendants to employees separating from the company, not an agreement reached to settle a dispute between Brennan and IQVIA as to unpaid wages”). 1143 See generally Section XVIII.
RkJQdWJsaXNoZXIy OTkwMTQ4