Corporate Compliance Insights

Type: Articles Published

The standard agreement templates used for settling discrimination and other types of employment cases routinely include a number of broad-based provisions designed to protect employers from all harms that a settling employee-plaintiff might possibly bring to bear in the future. Illustrative are the waiver and release provisions in these agreements. They typically read like an encyclopedia, chronicling and barring every conceivable claim that an employee could conjure up against the employer following settlement. The nondisclosure provisions in these agreements are comparably all-encompassing. They regularly include kitchen-sink styled definitions of “confidential information” and make all such information off-limits to the settling employees for all future use and disclosure purposes (often with steep penalties in the event of breach).

The obvious pro-employer slant of such agreement clauses notwithstanding, they have become the norm. Employees voluntarily agree to them as a matter of course. But however acceptable such settlement terms have become in other litigation contexts, they simply do not fly in most cases involving wage claims under the Fair Labor Standards Act (FLSA). Below we explain why.