Court Opinion

ID: 4462083
Source: CourtListenerOpinion
Date Created: 2019-12-06 16:00:13.76505+00
Date Added: 2024-06-11T13:33:40.457706
License: Public Domain

17‐3388‐cv
     Mei Xing Yu v. Hasaki Restaurant, Inc.

 1

 2                                  In the
 3             United States Court of Appeals
 4                       For the Second Circuit
 5                                  ________
 6
 7                            AUGUST TERM, 2018
 8
 9                        ARGUED: OCTOBER 10, 2018
10                        DECIDED: DECEMBER 6, 2019
11
12                               No. 17‐3388‐cv
13
14    MEI XING YU, individual, on behalf of all other employees similarly
15                                situated,
16                            Plaintiff‐Appellee,
17
18                                      v.
19
20       HASAKI RESTAURANT, INC., SHUJI YAGI, KUNITSUGA NAKATA,
21                         HASHIMOTO GEN,
22                       Defendants‐Appellants,
23
24                      JANE DOE AND JOHN DOE #1–10,
25                               Defendants.
26                                ________
27
28               Appeal from the United States District Court
29                 for the Southern District of New York.
30                No. 16 Civ. 6094 – Jesse M. Furman, Judge.
31                                ________
32
33   Before: WALKER, CALABRESI, AND LIVINGSTON, Circuit Judges.
34                                     ________
     2                                                        No. 17‐3388‐cv

 1

 2         Mei Xing Yu, an employee of Hasaki Restaurant, filed a claim
 3   alleging violations of the Fair Labor Standards Act’s (“FLSA” or the
 4   “Act”) overtime provisions. Soon thereafter, Hasaki Restaurant sent
 5   Mei Xing Yu an offer of judgment, pursuant to Federal Rule of Civil
 6   Procedure 68(a), for $20,000 plus reasonable attorneys’ fees. After Mei
 7   Xing Yu accepted the offer, the parties filed the offer and notice of
 8   acceptance with the district court. Before the Clerk of the Court could
 9   enter the judgment, however, the district court sua sponte ordered the
10   parties to submit the settlement agreement to the court for a fairness
11   review and judicial approval, which the district court believed was
12   required under the Second Circuit’s decision in Cheeks v. Freeport
13   Pancake House, Inc., 796 F.3d 199 (2d Cir. 2015). Both parties disputed
14   the district court’s interpretation of the FLSA, Rule 68, and Cheeks, and
15   filed an interlocutory appeal. Upon review of the text of the Act and
16   judicial precedents interpreting the Act, we hold that judicial
17   approval is not required of Rule 68(a) offers of judgment settling
18   FLSA claims. Accordingly, we REVERSE and VACATE the district
19   court’s order and REMAND with instructions to direct the Clerk of
20   the Court to enter the judgment as stipulated in the accepted Rule
21   68(a) offer. Judge Calabresi dissents in a separate opinion.

22                                  ________

23                      KELI LUI, WILLIAM M. BROWN, Hang and
24                      Associates, PLLC, Flushing, NY, for Plaintiff‐
25                      Appellee.

26                      LILLIAN M. MARQUEZ (Louis Pechman, Laura
27                      Rodriguez, on the brief), Pechman Law Group
28                      PLLC, New York, NY, for Defendants‐Appellants.

29
     3                                                        No. 17‐3388‐cv

 1                      ADINA H. ROSENBAUM (Sean M. Sherman, Adam
 2                      R. Pulver, on the brief), Public Citizen Litigation
 3                      Group, for Court‐Appointed Amicus Curiae.

 4                                  ________

 5         JOHN M. WALKER, JR., Circuit Judge:

 6         Mei Xing Yu, an employee of Hasaki Restaurant, filed a claim
 7   alleging violations of the Fair Labor Standards Act’s (“FLSA” or the
 8   “Act”) overtime provisions. Soon thereafter, Hasaki Restaurant sent
 9   Mei Xing Yu an offer of judgment, pursuant to Federal Rule of Civil
10   Procedure 68(a), for $20,000 plus reasonable attorneys’ fees. After Mei
11   Xing Yu accepted the offer, the parties filed the offer and notice of
12   acceptance with the district court. Before the Clerk of the Court could
13   enter the judgment, however, the district court sua sponte ordered the
14   parties to submit the settlement agreement to the court for a fairness
15   review and judicial approval, which the district court believed was
16   required under the Second Circuit’s decision in Cheeks v. Freeport
17   Pancake House, Inc., 796 F.3d 199 (2d Cir. 2015). Both parties disputed
18   the district court’s interpretation of the FLSA, Rule 68, and Cheeks, and
19   filed an interlocutory appeal. Upon review of the text of the Act and
20   judicial precedents interpreting the Act, we hold that judicial
21   approval is not required of Rule 68(a) offers of judgment settling
22   FLSA claims. Accordingly, we REVERSE and VACATE the district
23   court’s order and REMAND with instructions to direct the Clerk of
24   the Court to enter the judgment as stipulated in the accepted Rule
25   68(a) offer. Judge Calabresi dissents in a separate opinion.

26                              BACKGROUND

27         Plaintiff‐appellee Mei Xing Yu worked as a sushi chef at a
28   restaurant owned and operated by appellant Hasaki Restaurant, Inc.
29   On August 1, 2016, Mei Xing Yu filed a complaint against Hasaki
     4                                                         No. 17‐3388‐cv

 1   Restaurant and various individual owners and managers of Hasaki
 2   Restaurant (collectively “Hasaki”) in the Southern District of New
 3   York on behalf of himself and all other employees similarly situated,
 4   alleging violations of the overtime provisions of the Fair Labor
 5   Standards Act and New York labor laws.

 6             On November 23, 2016, Hasaki mailed Mei Xing Yu a Rule 68
 7   offer of judgment for $20,000 plus reasonable attorneys’ fees, costs,
 8   and expenses through the date of the offer. Mei Xing Yu timely
 9   accepted the offer of judgment, and on December 8, 2016, Mei Xing
10   Yu filed a letter with the district court (Furman, J.) notifying the court
11   of his acceptance.

12             On December 9, 2016, Judge Furman ordered the parties to
13   submit their settlement agreement to the district court along with a
14   joint letter explaining why the settlement should be approved as fair
15   and reasonable.           Judge Furman explained that he believed our
16   decision in Cheeks v. Freeport Pancake House, Inc.1 required him to
17   scrutinize the parties’ settlement to ensure it was fair and reasonable.
18   Cheeks held that stipulated dismissals settling FLSA claims with
19   prejudice pursuant to Federal Rule of Civil Procedure 41(a)(1)(A)(ii)
20   require the approval of either the district court or the Department of
21   Labor (“DOL”). Alternatively, the district court offered the parties
22   the opportunity to argue why they did not believe that judicial
23   approval of the Rule 68(a) offer of judgment was required.

24             The parties then submitted a joint letter on December 22, 2016,
25   arguing that they did not need judicial approval of their Rule 68(a)
26   offer of judgment to settle Mei Xing Yu’s FLSA claims. On January
27   13, 2017, the Secretary of Labor filed an amicus brief in a separate case
28   in the Southern District of New York, Sanchez v. Burgers & Cupcakes

     1   796 F.3d 199 (2d Cir. 2015).
     5                                                                No. 17‐3388‐cv

 1   LLC,2 arguing that judicial approval is required when a Rule 68(a)
 2   offer of judgment is accepted by a plaintiff raising FLSA claims.
 3   Pursuant to a district court order, the parties filed supplemental briefs
 4   in response to the Secretary’s amicus brief in Sanchez, in which the
 5   parties maintained their position that judicial approval was not
 6   required.

 7          On March 20, 2017, the district court issued a brief order
 8   concluding that “judicial approval of the parties’ settlement is
 9   required, notwithstanding the fact that it was reached pursuant to
10   Rule 68(a) of the Federal Rules of Civil Procedure.”3                      Shortly
11   thereafter, the district court issued a follow‐up opinion.4 The district
12   court reasoned that although Rule 68(a) is phrased in mandatory
13   terms—requiring the clerk of the court to enter judgment of an
14   accepted offer of judgment without any reference to judicial
15   approval—there are exceptions to the Rule’s mandatory terms, such
16   as class action and bankruptcy settlements, which require judicial
17   approval.5 Accepting the fact that there are exceptions to Rule 68(a)’s
18   mandatory language, the district court concluded that FLSA claims
19   “fall within the narrow class of claims that cannot be settled under
20   Rule 68 without approval by the court (or the DOL).”6 Relying on our
21   opinion in Cheeks, the district court concluded that while “Cheeks may
22   not apply a fortiori to a Rule 68 FLSA settlement given its reliance on
23   the language of Rule 41, its reasoning—combined with the fact that

     2 Amicus Br., Sanchez v. Burgers & Cupcakes LLC, No. 16‐cv‐3862 (S.D.N.Y. Jan 13.,
     2017), ECF No. 43.
     3 Order, Mei Xing Yu v. Hasaki Rest., Inc., 16‐cv‐6094 (S.D.N.Y. Mar. 20, 2017), ECF

     No. 24.
     4 Opinion and Order, Hasaki Rest., Inc., ECF No. 27; see also Mei Xing Yu v. Hasaki

     Rest., Inc., 319 F.R.D 111 (S.D.N.Y. 2017).
     5 Hasaki Rest., Inc., 319 F.R.D. at 113–14.

     6 Id. at 114.
     6                                                               No. 17‐3388‐cv

 1   Rule 68 is not always . . . mandatory—compels the conclusion that
 2   parties may not evade the requirement for judicial (or DOL) approval
 3   by way of Rule 68.”7

 4          Noting the existence of “substantial ground for difference of
 5   opinion” on the issue, and that the lower courts were divided on the
 6   question, the district court certified its order for interlocutory appeal
 7   under 28 U.S.C. § 1292(b).8 The parties filed a timely notice of appeal
 8   in the district court, but did not file a timely § 1292(b) petition for
 9   permission to take an interlocutory appeal in this court. Nonetheless,
10   on October 23, 2017, a panel of our court granted the parties’ motion
11   to file a late § 1292(b) petition and then granted the petition.9 In
12   addition, because both Mei Xing Yu and Hasaki took the same
13   position before the district court, a panel of our court granted the
14   Public Citizen Litigation Group’s (“PCLG”) motion to be appointed
15   amicus curiae in order to defend the district court’s ruling.10 We also
16   invited and received an amicus brief from the Secretary of Labor.11

17                                   DISCUSSION

18          The question before us is straightforward: whether acceptance
19   of a Rule 68(a) offer of judgment that disposes of an FLSA claim in
20   litigation needs to be reviewed by a district court or the DOL for
21   fairness before the clerk of the court can enter the judgment. The
22   question is one of statutory interpretation. Therefore, “we begin, as
23   we must, with a careful examination of the statutory text” of both
24   Rule 68(a) and the FLSA.12

     7 Id. at 116.
     8 Id. at 117.
     9 See No. 17‐1067, ECF No. 56 (Oct. 23, 2017).

     10 See No. 17‐3388, ECF No. 38 (Nov. 28, 2017). We thank PCLG for their service as

     court‐appointed amicus.
     11 Id.

     12 See Henson v. Santander Consumer USA Inc., 137 S. Ct. 1718, 1721 (2017).
     7                                                                     No. 17‐3388‐cv

 1           I.      Federal Rule of Civil Procedure 68

 2           Rule 68(a) states:

 3           At least 14 days before the date set for trial, a party
 4           defending against a claim may serve on an opposing
 5           party an offer to allow judgment on specified terms, with
 6           the costs then accrued. If, within 14 days after being
 7           served, the opposing party serves written notice
 8           accepting the offer, either party may then file the offer
 9           and notice of acceptance, plus proof of service. The clerk
10           must then enter judgment.13
11   Rule 68(d) provides that “[i]f the judgment that the offeree finally
12   obtains is not more favorable than the unaccepted offer, the offeree
13   must pay the costs incurred after the offer was made,”14 which
14   includes attorney’s fees.15           Rule 68(b) discusses the effect of an
15   unaccepted offer, and Rule 68(c) provides a mechanism for making
16   an offer after a party’s liability has been determined but the extent of
17   liability remains to be determined.16

18           “The plain purpose of Rule 68 is to encourage settlement and
19   avoid litigation. . . . The Rule prompts both parties to a suit to evaluate
20   the risks and costs of litigation, and to balance them against the
21   likelihood of success upon trial on the merits.”17

22           On its face, Rule 68(a)’s command that the clerk must enter
23   judgment is mandatory and absolute.18                      The Sixth Circuit has

     13 Fed. R. Civ. P. 68(a).
     14 Fed. R. Civ. P. 68(d).
     15 Marek v. Chesney, 473 U.S. 1, 9 (1985).

     16 Fed. R. Civ. P. 68(b), (c).

     17 Marek, 473 U.S. at 5.

     18 See 12 Charles A. Wright, Arthur R. Miller, et al., Federal Practice and Procedure

     § 3005 (3d ed.) (“Except for . . . rare situations . . . courts are directed by Rule 68 to
     enter judgment if an offer has been accepted.”).
     8                                                                   No. 17‐3388‐cv

 1   described a district court’s role in entering a Rule 68(a) judgment as
 2   “ministerial rather than discretionary,” because the plain language of
 3   the Rule “leaves no discretion in the district court to do anything but
 4   enter judgment once an offer has been accepted.”19 Other circuits
 5   have said substantially the same thing,20 as has this circuit, though in
 6   less obvious terms.21 Both the common usage of the word “must” and
 7   the dictionary definition of that word support this understanding of
 8   Rule 68(a)’s mandatory nature.22 There is also no doubt that Rule
 9   68(a) applies in this case: Rule 1 provides that the Federal Rules of
10   Civil Procedure “govern the procedure in all civil actions and
11   proceedings in the United States district courts . . . .”23

12          Despite the mandatory language, however, amici and the
13   district court contend that there are “rare situations” in which a
14   district court must approve the proposed resolution of the pending
15   litigation before the stipulated judgment can take legal effect.24 They

     19 Mallory v. Eyrich, 922 F.2d 1273, 1278–79 (6th Cir. 1991).
     20 See Ramming v. Nat. Gas Pipeline Co. of Am., 390 F.3d 366, 370 (5th Cir. 2004) (“A
     Rule 68 Offer of Judgment is usually considered self‐executing.”); Perkins v. U.S.
     W. Comm’cns, 138 F.3d 336, 338 (8th Cir. 1998) (“Rule 68 leaves no discretion in the
     district court to do anything other than enter judgment once an offer of judgment
     has been accepted.”); Webb v. James, 147 F.3d 617, 621 (7th Cir. 1998) (“Because of
     this mandatory directive, the district court has no discretion to alter or modify the
     parties’ agreement.”); cf. Jordan v. Time, Inc., 111 F.3d 102, 105 (11th Cir. 1997)
     (determining that the standard of review for a district court’s construction of Rule
     68 is de novo because “the mandatory language of the rule leaves no room for
     district court discretion”).
     21 See Bowles v. J.J. Schmitt & Co., 170 F.2d 617, 620 (2d Cir. 1948) (stating that one

     of the “only two occasions under the rules when the clerk may enter final
     judgment without action of the judge or jury . . . [is] upon notice of acceptance of
     an offer of judgment under rule 68”).
     22 See Must, Webster’s New International Dictionary (3d ed. 1999) (1a: “is commanded

     or requested to”; 1b: “is urged to: ought by all means to”; 4: “is required by law,
     custom, or moral conscience to”).
     23 Fed. R. Civ. P. 1 (emphasis added).

     24 Wright & Miller, § 3005.
     9                                                                    No. 17‐3388‐cv

 1   point to various examples in support of their argument that Rule
 2   68(a)’s facially mandatory nature is riddled with “a host of situations
 3   in which parties may not, without approval of either or both a
 4   government agency and a court, enter into a settlement.”25

 5           The first category of examples involves proceedings that are
 6   governed by federal rules that explicitly require judicial approval
 7   before settlement.          For instance, Federal Rule of Bankruptcy
 8   Procedure 9019 specifically requires judicial approval of settlements,
 9   and the D.C. Circuit has held that Rule 68(a) offers of judgment
10   settling bankruptcy proceedings must be approved by the
11   bankruptcy court to become effective.26 Other circuits have required
12   Rule 68(a) offers of judgment settling class action suits to be approved
13   by the district court before the judgment can be entered.27 These
14   circuits have relied on Federal Rule of Civil Procedure 23, which
15   plainly states that “[t]he claims, issues, or defenses of a certified
16   class—or a class proposed to be certified for purposes of settlement—
17   may be settled, voluntarily dismissed, or compromised only with the
18   court’s approval . . . after a hearing and only on finding that it is fair,
19   reasonable, and adequate . . . .”28

20           Amici and the district court also refer to substantive statutes
21   that specifically require the district court’s consent before cases
22   involving those statutory causes of action may be settled.                         For
23   instance, New York law requires court approval to settle any action
24   “commenced by or on behalf of [an] infant, incompetent or

     25 Hasaki Rest., Inc., 319 F.R.D. at 113; see also PCLG Br. at 19–20; Sec’y of Labor Br.
     at 25–26.
     26 Gordon v. Gouline, 81 F.3d 235, 239 (D.C. Cir. 1996).

     27 See id. at 239–40 (collecting cases).

     28 Fed. R. Civ. P. 23(e), (e)(2) (emphasis added).
     10                                                                  No. 17‐3388‐cv

 1   conservatee.”29 And the False Claims Act (“FCA”) unambiguously
 2   states that a qui tam action “may be dismissed only if the court and
 3   the Attorney General give written consent to the dismissal and their
 4   reasons for consenting.”30

 5          Our circuit has yet to endorse any of these asserted exceptions
 6   to Rule 68(a)’s mandatory command that the clerk of the court enter
 7   judgment once an offer has been accepted and filed with the court.31
 8   There is no need for us to consider the validity of these exceptions
 9   because they are not at issue here. But, assuming for the sake of
10   argument that Rule 68(a) offers of judgment are susceptible to judicial
11   review in certain situations, we agree with the district court that the

     29 N.Y. C.P.L.R. § 1207; see also id. at § 1208.
     30 31 U.S.C. § 3730(b)(1).
     31 The Dissent and amici suggest that illegal acts and injunctive relief may be

     further exceptions to Rule 68. See Hasaki Rest., Inc., 319 F.R.D. at 114. While neither
     of these situations are at issue here, we note that requiring courts to scrutinize all
     Rule 68 offers for illegality would transform Rule 68’s ministerial act into a
     searching inquiry, a judicial modification of the Rule’s plain text which we are
     reluctant to endorse. In the event an illegal judgment was entered pursuant to
     Rule 68, the defendant in a subsequent enforcement action could raise illegality as
     a defense. See infra note 101 and accompanying text. Alternatively, either party
     could challenge the judgment via a Rule 60 motion. See, e.g., Laskowski v. Buhay,
     192 F.R.D. 480, 484 (M.D. Pa. 2000) (considering and denying a defendant’s motion
     seeking to void a Rule 68 judgment through Rule 60); see also infra note 102 and
     accompanying text. As to injunctive relief, it seems that Marek itself involved the
     use of Rule 68 in a suit where the plaintiff requested some injunctive relief. See
     Roy D. Simon, Jr., The New Meaning of Rule 68: Marek v. Chesny and Beyond, 14
     N.Y.U. REV. L. & SOC. CHANGE 475, 485 (1986) (discussing the complaint in Marek).
     At any rate, we need not address the Rule’s application in this context. Even
     assuming arguendo that judgments providing for injunctive relief issue only upon
     a judge’s review, given that such relief involves the exercise of the court’s
     discretion, see Hecht Co. v. Bowles, 321 U.S. 321, 329 (1944) (“An appeal to the equity
     jurisdiction conferred on federal district courts is an appeal to the sound discretion
     which guides the determinations of courts of equity.”) (internal quotation marks
     omitted), this point is simply not germane to Rule 68’s scope outside of this
     context.
     11                                                                  No. 17‐3388‐cv

 1   proper inquiry is “whether FLSA claims fall within the narrow class
 2   of claims that cannot be settled under Rule 68 without approval by
 3   the court (or the DOL).”32 In other words, we must determine, as the
 4   Supreme Court in Marek v. Chesney explained, whether the FLSA
 5   contains “’the necessary clear expression of congressional intent’
 6   required ‘to exempt the statute from the operation of’ Rule 68.”33 We
 7   think the answer is no for the reasons that follow.

 8          II.     The FLSA

 9          The FLSA contains two primary worker protections: first, it
10   guarantees covered employees a federal minimum wage;34 and
11   second, it provides covered employees the right to overtime pay at a
12   rate of one‐and‐a‐half their regular rate for hours worked above forty
13   hours a week.35 “The principal congressional purpose in enacting the
14   [FLSA] was to protect all covered workers from substandard wages
15   and oppressive working hours, ‘labor conditions [that are]
16   detrimental to the maintenance of the minimum standard of living
17   necessary for health, efficiency and general well‐being of workers.’”36

18          Ever since the FLSA was enacted in 1938, it has allowed for a
19   private right of action by a covered employee against any employer
20   who violates the Act’s minimum wage and overtime pay provisions
21   to recover unpaid wages, together with “an additional equal amount
22   as liquidated damages.”37 In 1949, Congress amended the FLSA and

     32 Hasaki Rest., Inc., 319 F.R.D. at 114.
     33 Marek, 473 U.S. at 11–12 (quoting Califano v. Yamasaki, 422 U.S. 682, 700 (1979)
     (modifications incorporated)).
     34 See 29 U.S.C. § 206.

     35 See 29 U.S.C. § 207.

     36 Barrentine v. Arkansas‐Best Freight Sys., Inc., 450 U.S. 728, 739 (1981) (quoting 29

     U.S.C. § 202(a) (captioned “Congressional finding and declaration of policy)).
     37 Fair Labor Standards Act of 1938, Pub. L. No. 75‐718, 52 Stat. 1069 (codified as

     amended at 29 U.S.C § 216(b) (2018)).
     12                                                                 No. 17‐3388‐cv

 1   authorized the Administrator of the Wage and Hours Division of the
 2   DOL to “supervise payment of the unpaid minimum wages or the
 3   unpaid overtime compensation owing to any employee or
 4   employees.”38 Congress also authorized the Administrator to bring
 5   an action on behalf of, and upon the written request of, a covered
 6   employee to recover unpaid minimum wages or overtime
 7   compensation.39

 8          These provisions providing a private right of action, DOL‐
 9   supervised payment, or DOL action on behalf of covered employees
10   all remain in effect today and are contained in § 216 of the Act, with
11   minor amendments not material here.40 Nowhere in the text of the
12   current or prior versions of § 216, however, is there a command that
13   FLSA actions cannot be settled or otherwise dismissed without
14   approval from a court. The provisions of § 216 simply set forth
15   different ways in which covered employees (or the DOL on behalf of
16   covered employees) may assert the substantive rights afforded to
17   them by the Act. The lack of any explicit requirement for judicial
18   approval before a settlement or dismissal can be entered under § 216
19   is what distinguishes the FLSA from the statutory examples the
20   district court and amici have cited as evidence of exceptions to Rule
21   68(a)’s mandatory character.            Each of those statutes contains an
22   explicit requirement that the court must approve the dismissal or
23   settlement before it can be entered; the FLSA contains no similar

     38 Fair Labor Standards Act of 1938, Pub. L. No. 81‐393, 63 Stat. 919 (1949) (codified
     as amended at 29 U.S.C. § 216(c) (2018)).
     39 Id. This provision has since been amended, such that this power is now vested

     in the Secretary of Labor, rather than the Administrator. Furthermore, it is no
     longer necessary for the Secretary to receive the written request of an employee
     for the Secretary to initiate an action on behalf of a covered employee. See 29 U.S.C.
     § 216(c) (2018).
     40 See 29 U.S.C. §§ 216(b), (c) (2018).
     13                                                                  No. 17‐3388‐cv

 1   command.

 2          Ordinarily, the lack of any textual requirement for judicial
 3   approval would be the end of the analysis because “the first canon of
 4   statutory construction is that ‘a legislature says in a statute what it
 5   means and means in a statute what is says there.’ Indeed, ‘when the
 6   words of a statute are unambiguous . . . this first canon is also the last:
 7   judicial inquiry is complete.’”41 Nonetheless, amici and the Dissent
 8   argue that we should read a judicial review requirement into the
 9   FLSA for four reasons: (1) Supreme Court precedents interpreting
10   FLSA rights as nonwaivable require it; (2) the statutory history of the
11   FLSA demonstrates a Congressional intent to only permit judicially
12   or DOL‐approved settlements; (3) this circuit’s decision in Cheeks,
13   which explained the need for judicial review of Rule 41(a)(1)(A)(ii)
14   dismissals with prejudice of FLSA claims, compels a similar result
15   with respect to Rule 68 offers of judgment; and (4) it would further
16   “the underlying purpose of the FLSA, which is a uniquely protective
17   statute.”42 We address each of these points in turn.

18                  a.      Supreme Court Precedent

19          Amici’s argument for why we must read a judicial approval
20   requirement into the FLSA rests upon a few decisions by the Supreme
21   Court beginning in 1945. Amici asserts that these decisions stand for
22   the proposition that “there are only two ways in which FLSA claims
23   can be settled or compromised by employees”: either through a DOL‐
24   supervised payment of unpaid wages by the employer under § 216(c),
25   or a stipulated judgment approved by a district court in a private

     41 United States v. Piervinanzi, 23 F.3d 670, 677 (2d Cir. 1994) (internal citation and
     alteration omitted) (quoting Connecticut Nat’l Bank v. Germain, 503 U.S. 249, 253–54
     (1992)).
     42 Sec’y of Labor Br. at 6.
     14                                                               No. 17‐3388‐cv

 1   action for unpaid wages under § 216(b).43 We disagree.

 2          In Brooklyn Savings Bank v. O’Neil, the Supreme Court
 3   considered “whether in the absence of a bona fide dispute between
 4   the parties as to liability, [an employee’s] written waiver of his right
 5   to liquidated damages under [the FLSA] bars a subsequent action to
 6   recover liquidated damages.”44             The Court acknowledged that
 7   nothing in “the statutory language, the legislative reports nor the
 8   debates indicates that the question at issue was specifically
 9   considered and resolved by Congress.”45                  The Court believed,
10   however, that the Congressional intent “to protect certain groups of
11   the population from substandard wages and excessive hours”46
12   counseled in favor of concluding that Congress did not intend for the
13   FLSA’s minimum wage, overtime, and liquidated damages rights to
14   be capable of waiver by employees. It reasoned that “waiver of
15   statutory wages by agreement would nullify the purpose of the Act,”
16   as would “waiver of the employee’s right to liquidated damages.”47
17   Thus, it concluded that “contracts for waiver of liquidated damages .
18   . . are void as contrary to public policy,” and will not be entertained
19   by courts as an employer’s affirmative defense in a subsequent action
20   by an employee to recover liquidated damages.48

21          In the two consolidated cases49 under consideration in Brooklyn
22   Savings, the employees released their FLSA rights not as part of a

     43 PCLG Br. at 12 (quoting Hasaki Rest., Inc., 319 F.R.D. at 112).
     44 324 U.S. 697, 704 (1945).
     45 Id. at 705–06.

     46 Id. at 706–07.

     47 Id. at 707.

     48 Id. at 710.

     49 Brooklyn Savings actually dealt with three consolidated cases, but the third case

     dealt with a separate issue of whether an employee suing to collect unpaid wages
     under FLSA is also entitled to interest.
     15                                                       No. 17‐3388‐cv

 1   settlement of a bona fide dispute between the employers and
 2   employees, but as a “mere waiver.”50          The Court stressed this
 3   distinction.51    Brooklyn Savings’ holding that mere waivers of an
 4   employee’s right to liquidated damages are unenforceable expressly
 5   left open the question of “what limitation, if any, [§ 216(b)] of the Act
 6   places on the validity of agreements between an employer and
 7   employee to settle claims arising under the Act if the settlement is
 8   made as the result of a bona fide dispute between the two parties, in
 9   consideration of a bona fide compromise and settlement.”52

10          That unresolved question was partially addressed the
11   following year in D.A. Schulte, Inc. v. Gangi.53 Unlike in Brooklyn
12   Savings, the employees in Gangi did not simply sign away their rights.
13   Under threat of suit by the employees, the employer paid the full
14   amount of back pay and, in return, obtained a release of the
15   employees’ statutory right to liquidated damages, notwithstanding
16   the employer’s sincere belief that the employees were not covered by
17   the FLSA because the interstate commerce nexus was minimal.54 “The
18   primary issue presented [was] whether the [FLSA] precludes a bona
19   fide settlement of a bona fide dispute over the coverage of the Act on
20   a claim for overtime compensation and liquidated damages where the
21   employees receive the overtime compensation in full.”55

22          The Supreme Court sided with the employees. The Court
23   acknowledged that the releases were obtained in settlement of a bona
24   fide dispute as to coverage, but, adopting the reasoning from Brooklyn

     50 324 U.S. at 703–04, 713–14.
     51 Id at 713–14.
     52 Id. at 714.

     53 328 U.S. 108 (1946).

     54 Id. at 111–12.

     55 Id. at 110.
     16                                                       No. 17‐3388‐cv

 1   Savings, it held that “the remedy of liquidated damages cannot be
 2   bargained away by bona fide settlements of disputes over
 3   coverage.”56 The Court, however, expressly reserved the question of
 4   whether waiver or compromise of FLSA rights is permissible “in
 5   other situations which may arise, such as a dispute over the number
 6   of hours worked or the regular rate of employment.”57

 7           Relevant to our analysis, the Court, in dicta in a footnote, also
 8   seemed to indicate that the reasons behind not permitting waivers in
 9   private settlements might not hold for stipulated judgments in
10   judicial actions brought by employees pursuant to § 216(b).58 In
11   pertinent part, the Court stated:

12           Petitioner draws the inference that bona fide stipulated
13           judgments on alleged Wage‐Hour violations for less than
14           the amounts actually due stand in no better position than
15           bona fide settlements.         Even though stipulated
16           judgments may be obtained, where settlements are
17           proposed in controversies between employers and
18           employees over violations of the Act, by the simple
19           device of filing suits and entering agreed judgments, we
20           think the requirements of pleading the issues and
21           submitting the judgment to judicial scrutiny may
22           differentiate stipulated judgments from compromises by
23           the parties. At any rate the suggestion of petitioner is
24           argumentative only as no judgment was entered in this
25           case.59
26           In the intervening seven decades since Gangi, the Supreme
27   Court has never resolved these lingering questions about when and
28   how employees can release their FLSA rights. In 1981, the Court

     56 Id. at 114–15.
     57 Id.
     58 Id. at 113 n.8.

     59 Id.
     17                                                               No. 17‐3388‐cv

 1   reiterated in passing its holdings in Brooklyn Savings and O’Neil in
 2   Barrentine v. Arkansas‐Best Freight Systems, Inc., but did not expand the
 3   holdings from those earlier decisions or otherwise consider the
 4   questions those decisions left open.60

 5          Notably      absent     from     any    of   these     Supreme      Court
 6   interpretations of the FLSA is any discussion on whether a settlement
 7   or dismissal of an action to vindicate FLSA rights under § 216(b) is
 8   conditioned on court approval. Even the dicta in the footnote in Gangi
 9   did not discuss whether judicial approval was actually necessary
10   before parties could enter a stipulated judgment resolving FLSA
11   claims. The Supreme Court never said, as the Dissent suggests, that
12   “court‐supervised settlements might be valid under the FLSA.”61
13   Rather, the Court stated that “by the simple device of filing suits and
14   entering agreed judgments, we think the requirement of pleading the
15   issues and submitting the judgment to judicial scrutiny may
16   differentiate stipulated judgments from compromises by the parties.”62
17   In other words, the act of filing the suit, airing the parties’ dirty
18   laundry in public and before a judge, and then coming to an agreement
19   distinguishes     stipulated     judgments       from    private,     back‐room
20   compromises that could easily result in exploitation of the worker and
21   the release of his or her rights. Indeed, the Supreme Court itself has
22   at least on one occasion ordered a district court to enter a stipulated
23   judgment in a FLSA action for only two‐thirds the amount due in
24   statutory wages and liquidated damages while the case was on appeal

     60 450 U.S. 728, 740 (1981). Barrentine addressed the unrelated question of whether
     employees could bring an action alleging an FLSA violation after they had
     unsuccessfully submitted a claim based on the same underlying facts to a joint
     grievance committee pursuant to their union’s collective‐bargaining agreement,
     answering the question in the negative.
     61 Diss. Op. at 10 (emphasis added).

     62 Gangi, 328 U.S. at 114 n.8 (emphasis added).
     18                                                                 No. 17‐3388‐cv

 1   apparently without reviewing the stipulation for fairness.63 Rule 68(a)
 2   judgments are one such form of stipulated judgment and, by that
 3   Rule’s plain terms, do not require court‐supervision. Nothing the
 4   Supreme Court has said suggests a different rule, much less amounts
 5   to “’the necessary clear expression of congressional intent’ required
 6   ‘to exempt the statute from the application of Rule 68.’”64

 7          For this reason, we cannot accept the Dissent’s characterization
 8   of our opinion as creating a “third, implied method of resolving”
 9   FLSA claims.65 The Dissent refers to the settling of FLSA claims
10   through Rule 68(a) judgments as “private settlements” like those
11   prohibited by the Supreme Court in Brooklyn Savings and Gangi.66 But
12   Rule 68(a) judgments are not at all like those private settlements; they
13   are publicly‐filed, stipulated judgments between parties to an action
14   brought in a court of competent jurisdiction after litigation has been
15   commenced pursuant to § 216(b) of the FLSA.                       Nothing in the
16   Supreme Court’s decisions prohibit settling FLSA claims through
17   such stipulated judgments. To the contrary, as conceded by the
18   Dissent, these decisions allow that settlements in the context of

     63 See North Shore Corp. v. Barnett, 323 U.S. 679 (1944) (“The judgment of the Circuit
     Court of Appeals is vacated, the judgment of the District Court is modified in
     accordance with the stipulations signed by counsel for the parties and the case is
     remanded to the District Court for the Southern District of Florida with directions
     to enter the judgment as modified.”); see also Gangi, 328 U.S. at 144 n.8 (referencing
     Barnett as an example of a settlement of a FLSA claim by stipulated judgment
     ordered to be entered by the Supreme Court); Reply Br. for the Pet’r, Brooklyn
     Savings Bank v. O’Neil, 1945 WL 48260, at *19 (U.S. Jan. 1945) (describing the terms
     of the stipulated judgment as recovery to two‐thirds of the statutory wages and
     liquidated damages owed).
     64 See Marek, 473 U.S. at 11–12 (quoting Califano, 422 U.S. at 700 (modifications

     incorporated)).
     65 See Diss. Op. at 1–2.

     66 See, e.g., id. at 2, 3, 4, 6, 13, 14.
     19                                                           No. 17‐3388‐cv

 1   ongoing FLSA litigation may be permissible.67 Nor, contrary to the
 2   Dissent’s intimation, have any other circuits held that FLSA claims
 3   cannot be settled pursuant to a Rule 68(a) stipulated judgment
 4   without judicial approval.68 The laundry list of courts and cases
 5   referenced by the Dissent hold only that purely private settlements of
 6   FLSA claims, independent of any litigation, are prohibited without
 7   judicial approval or DOL supervision; this is a holding that is
 8   compelled by Gangi and with which we take no issue. None of those
 9   courts or cases addressed a Rule 68(a) stipulated judgment, the type
10   of settlement at issue in this case.

11          In Brooklyn Savings and Gangi, the Supreme Court held that
12   private contractual waivers of worker’s FLSA rights were against
13   public policy. This is a very different thing from holding that judicial
14   approval is required before parties, usually represented by counsel,
15   may settle a litigated FLSA dispute pursuant to Rule 68(a).

16          Despite the absence of any discussion by the Supreme Court in
17   Brooklyn Savings, Gangi, or Barrentine as to whether judicial approval
18   is required to settle actions raising FLSA claims, amici assert that
19   these cases laid “the foundation” for such a requirement, and from
20   that unsure foundation, make the leap that Rule 68(a) offers of
21   judgment settling FLSA claims must be approved by a judge before
22   the clerk may enter the judgment.69 We are not prepared to make that
23   interpretive leap in the context of Rule 68(a) offers of judgment absent
24   any indication from Congress or the Supreme Court that the FLSA
25   requires such judicial approval.70 This is especially so when the

     67 See Gangi, 328 U.S. at 114 n.8; see also Diss. Op. at 9–10.
     68 See Diss. Op. at 17.
     69 Sec’y of Labor Br. at 13; see also PCLG Br. at 11–13.

     70 Our circuit has made that leap with respect to voluntary dismissals with

     prejudice under Rule 41(a)(1)(A)(ii) in Cheeks. We decline to do the same with
     20                                                                  No. 17‐3388‐cv

 1   language of the Act itself fails to provide a scintilla of textual support
 2   for such a requirement, in the face of Rule 68(a)’s explicit textual
 3   command that the clerk of the court “must” enter stipulated
 4   judgments.71

 5          Amici also point to the fact that the Supreme Court concluded
 6   that FLSA rights are not waivable despite the absence of any “‘specific
 7   provisions prohibiting waiver of rights . . . or providing means by
 8   which compromises and settlements can be approved.’”72 To be sure,
 9   there is nothing in the text of the FLSA specifically declaring that the
10   minimum wage, overtime pay, and liquidated damages rights created
11   by the Act cannot be waived. Those cases, however, did not address
12   the question of prior judicial approval of § 216 settlements under Rule
13   68(a), and we discern from them no requirement that a court must
14   make the same sort of purposive interpretive leap in resolving a
15   question they did not address.

16                  b. Extrinsic Evidence and Statutory History73

17          Appointed amicus contends that the lack of any judicial
18   approval requirement in the text of the FLSA is not dispositive,

     respect to Rule 68(a) offers of judgment, as will be discussed. See infra, Section
     II(a).
     71 See Califano, 442 U.S. at 700 (requiring a “necessary clear expression of

     congressional intent to exempt” a statutorily‐created cause of action “from the
     operation of the Federal Rules of Civil Procedure,” since Rule 1 provides that the
     Rules govern the procedure in the United States district courts in all suits of a civil
     nature (internal quotation marks omitted)).
     72 Id. at 15–16 (brackets omitted) (quoting Brooklyn Savings, 324 U.S. at 713).

     73 The dissent accuses the majority of “ignoring completely” the statutory history

     in this case and of confusing statutory history with legislative history. This is a
     misreading of the opinion. While we consider extrinsic evidence, including
     legislative history, as unhelpful when the statutory text is unambiguous, we do
     not “ignore” the statutory history. Indeed, we fully address it in this section in
     discussing the 1949 Amendment that added § 216(c), but we simply reach a
     different conclusion than that of the dissent.
     21                                                                No. 17‐3388‐cv

 1   because “a statute’s requirements . . . also include judicial
 2   interpretations of the statute, which are reached through application
 3   of traditional tools of statutory construction, including examination
 4   of the statute’s text, legislative history, structure, and purpose.”74 We
 5   find this argument unpersuasive. A statute’s requirements are not so
 6   holistically determined.

 7          As we stated above, the first “cardinal canon” of statutory
 8   interpretation is to look at the text.75 It is only when a statute’s text is
 9   ambiguous that we turn to other tools of statutory interpretation to
10   help clarify the ambiguity.76 In this case, there is nothing ambiguous
11   about whether the FLSA requires judicial approval of offers of
12   judgment before actions brought under § 216(b) can be settled or
13   dismissed, because the text of the FLSA is devoid of any such
14   requirement, even as it details, in § 216(b), the precise contours of how
15   employees can file suit to vindicate their FLSA rights.

16          Section 216(b) states that an employer is liable for unpaid wages
17   and an equal amount in liquidated damages; that such an action may
18   be maintained in any federal or state court of competent jurisdiction;
19   that such an action may be commenced by an individual employee or
20   by an employee on behalf of other employees similarly situated; that
21   no employee shall be considered a party plaintiff to any such
22   collective action unless he gives his consent in writing to become a
23   party, and such consent is filed with the court; that in such an action,

     74 PCLG Br. at 15 (internal quotation marks omitted).
     75 Germain, 503 U.S. at 253.
     76 See Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 568 (2005) (“As we

     have repeatedly held, the authoritative statement is the statutory text, not the
     legislative history or any other extrinsic material. Extrinsic materials have a role
     in statutory interpretation only to the extent they shed a reliable light on the
     enacting Legislature’s understanding of otherwise ambiguous terms.” (emphasis
     added)).
     22                                                                No. 17‐3388‐cv

 1   reasonable attorney’s fees and costs are to be paid by the defendant;
 2   and that an employee’s private right of action terminates if the
 3   Secretary of Labor decides to initiate an action on behalf of
 4   employees.77 In this context of painstaking attention to procedural
 5   requirements, “[w]e do not lightly assume that Congress has omitted
 6   from its adopted text requirements that it nonetheless intends to
 7   apply.” Jama Immigration & Customs Enforcement, 543 U.S. 335, 341
 8   (2005).   Given that “Congress has shown elsewhere in the same
 9   statute” how to require supervision of settlements, id. § 216(b)’s
10   silence as to whether judicial approval is required before an action
11   initiated by employees under the provision can be settled via Rule
12   68(a) (or any other procedure) speaks volumes. Finding not even
13   arguable ambiguity78 as to this question in the statute’s text, there is
14   no need to turn to extrinsic evidence to help decipher the statute.79

     77 See 29 U.S.C. § 216(b).
     78 The Dissent takes issue with our characterization of the text as unambiguous
     because it is absolutely silent as to any judicial review requirement. We agree that
     ambiguity usually goes to the meaning of words. See Diss. Op. at 4. But this is
     because parties seldom make the argument that a statute requires something
     despite the absence of any statutory hint of such a requirement. Ambiguity
     usually comes into play when the parties disagree about what a statute says
     because parties can reasonably differ over how to interpret the words of a statute.
     See, e.g., MCI Telecommunications Corp. v. AT&T Co., 512 U.S. 218, 227 (debating the
     scope of the FCC’s authority to “modify” any requirement of § 203 of the
     Communications Act and noting that “most cases of verbal ambiguity in statutes
     involve . . . a selection between accepted alternative meanings shown as such by
     many dictionaries”). A statute that is utterly silent as to an alleged requirement is
     equally unambiguous. Our allegedly “unusual” use of the term unambiguous,
     according to the Dissent, is the product of Amici and the Dissent’s even more
     unusual argument that silence can breed ambiguity. Judicial insertion of a positive
     command into a statute that is silent on the point goes beyond interpretation; it is
     an usurpation of the legislative function.
     79 Even if we were to consider legislative history, nothing in that history indicates

     Congress intended for judicial approval to be required before actions raising FLSA
     claims could be settled or dismissed, and amici have pointed none.
     23                                                               No. 17‐3388‐cv

 1          The Dissent points to the 1949 amendment of the FLSA, in
 2   which Congress added § 216(c) and authorized the DOL to supervise
 3   private settlements of FLSA claims, as evidence that Congress
 4   intended to prohibit the private settlement of all FLSA claims unless
 5   supervised by the DOL or a court.80 This amendment does not affect
 6   our understanding of whether the FLSA requires judicial approval of
 7   a Rule 68(a) stipulated judgment. The amendment only grants the
 8   DOL authority to supervise private FLSA settlements with finality; it
 9   says nothing about whether courts must approve stipulated
10   judgments or other settlements or dismissals. Furthermore, and as
11   discussed, there is a critical distinction between purely private
12   settlements between parties and stipulated judgments between
13   parties, the latter of which occur in the context of publicly‐filed,
14   ongoing litigation subject to judicial scrutiny.81 The ability of parties
15   to enter stipulated judgments once a case has been publicly filed,
16   pleaded, and submitted to judicial scrutiny does not, as the Dissent
17   contends,82 render § 216(c) superfluous, because that section
18   continues to apply to private settlements outside the context of
19   litigation.83 At bottom, we do not believe it is reasonable to interpret

     80 See Diss. Op. at 11–13.
     81 See supra Section II(a).; see also Gangi, 328 U.S. at 113 n.8.
     82 See Diss. Op. at 6–7.

     83 Far from being superfluous, the statutory history relied on by the Dissent

     supports the view that Congress enacted Section 216(c) in order to provide
     employers with an efficient and expert non‐judicial alternative for resolving FLSA
     liability. Indeed, the Dissent notes that Section 216(c) was enacted in response to
     a new reluctance among employers to voluntarily remit back pay in cooperation
     with the DOL without a need for court proceedings. See Diss Op. at 11–12. This
     reluctance was due to fears that DOL supervision was insufficient to protect
     employers from later suits in the aftermath of Brooklyn Savings and Gangi. See id.
     (citing Fair Labor Standards Amendments of 1949, S. Rep. No. 81‐640, 81st Cong.,
     1st Sess., reprinted in 1949 U.S.C.C.A.N. 2241, 2248). As noted above, Rule 68(a)’s
     filing and pleading requirements impose burdens on employers and employees
     looking to resolve FLSA disputes. Voluntary and DOL‐supervised settlements do
    24                                                                No. 17‐3388‐cv

1   Congress’ amendment authorizing the DOL to supervise private
2   FLSA settlements as prohibiting Rule 68(a) stipulated judgments
3   settling FLSA claims in the context of ongoing litigation when the
4   amendment does not pertain to judicial actions.84 Congress does not
5   “hide elephants in mouseholes.”85

    not impose these same (or equivalent) burdens. Section 216(c) is thus fairly
    understood as a distinct provision which is nonetheless fully compatible with the
    goals of Rule 68 in encouraging efficient settlement of claims.
    84 Indeed, interpreting Congress’ amendment adding § 216(c) in the way the

    Dissent does would seemingly prohibit all other forms of settling FLSA claims,
    including judicially‐approved settlements, because Congress only authorized the
    DOL to settle FLSA claims. Nonetheless, the Dissent, and to our knowledge, every
    circuit to address the issue, accepts that courts may approve FLSA settlements and
    dismissals—even if there is disagreement as to whether such approval is required—
    despite the fact that § 216(c) only grants supervisory authority to the DOL. The
    consistency of Rule 68 and the 1949 amendments is all the more evident
    considering that Rule 68 had been in existence for approximately ten years by the
    time § 216(c) was adopted. See Marek, 473 U.S. at 8–9 (discussing the history of
    Rule 68 and noting that the rules were adopted in 1938).
    85 See Whitman v. Am. Trucking Ass’n, 531 U.S. 457, 468 (2001). The Dissent also

    suggests that the Portal‐to‐Portal Act of 1947 reflects Congressional endorsement
    of its broad reading of Brooklyn Savings and Gangi. Diss. Op. at 12 n.5. However,
    the Dissent’s discussion omits the express congressional disapproval of the
    Supreme Court’s FLSA jurisprudence embodied in the Congressional Findings
    attached to the Portal‐to‐Portal Act. See 29 U.S.C. § 251(a). Those findings open
    with an express statement that “the Fair Labor Standards Act of 1938 . . . has been
    interpreted judicially in disregard of long‐established customs, practices, and
    contracts between employers and employees” and warned that if these
    interpretations “were permitted to stand . . . the courts of the country would be
    burdened with excessive and needless litigation . . .” Id. This language echoed
    that of Justice Jackson, citing to Brooklyn Savings and Gangi and writing in the same
    year as the Portal‐to‐Portal Act, that the Court’s FLSA jurisprudence had caused
    “interminable litigation[]stimulated by a contingent reward to attorneys.” Walling
    v. Portland Terminal Co., 330 U.S. 148, 155 (1947) (Jackson, J., concurring). Taken
    together, this language suggests that Congress was more concerned with
    protecting employers from the excessive litigation caused by the Supreme Court’s
    FLSA jurisprudence than with restricting the means by which parties could settle.
    In line with these contemporary views of Brooklyn Savings and Gangi, we decline
    to use the “rubric of ‘unequal bargaining power’” to “promulgate social values”
     25                                                             No. 17‐3388‐cv

 1          In light of the unambiguously mandatory command of Rule
 2   68(a) for the clerk of the court to enter offers of judgment when they
 3   are accepted, and because we find no indication by Congress or the
 4   Supreme Court that the FLSA requires judicial approval of stipulated
 5   judgments concerning FLSA claims in the context of ongoing
 6   litigation, we decline to pull such a requirement out of thin air with
 7   respect to Rule 68(a) offers of judgment settling FLSA claims. Neither
 8   amici nor the Dissent has identified a reliable source in the statutory
 9   history that demonstrates “the necessary clear expression of
10   congressional intent required to exempt the statute from the
11   operation of Rule 68.”86

12                 c. Cheeks v. Freeport Pancake House, Inc.

13          Amici also contend that a prior decision from our circuit—
14   Cheeks v. Freeport Pancake House, Inc.—is determinative of whether
15   Rule 68(a) offers of judgment involving FLSA claims must be
16   approved by a court before they may be entered.                     While we
17   acknowledge the similarities between the two cases, we decline to
18   extend Cheeks’s holding requiring judicial approval for stipulated
19   dismissals settling FLSA claims with prejudice under Rule
20   41(a)(1)(A)(ii) to the context of Rule 68(a) offers of judgment.

21          The question in Cheeks was whether parties could enter a
22   “stipulated dismissal of FLSA claims with prejudice, without the
23   involvement of the district court or DOL, that may be enforceable,”
24   pursuant to Rule 41(a)(1)(A)(ii).87         Rule 41(a)(1)(A)(ii) states that
25   “[s]ubject to Rules 23(e), 23.1(c), 23.2, and 66 and any applicable federal

     which “intrude upon the legislative sphere” and “reflect imprecise apprehensions
     of economics and desirable public policy.” United States v. Allegheny‐Ludlum
     Indus., Inc., 517 F.2d 826, 861 (5th Cir. 1975); see also id. at 162.
     86 Marek, 473 U.S. at 11–12 (internal quotation marks and modifications omitted).

     87 Cheeks, 796 F.3d at 204.
     26                                                                   No. 17‐3388‐cv

 1   statute, the plaintiff may dismiss an action without a court order by
 2   filing . . . a stipulation of dismissal signed by all parties who have
 3   appeared.”88        Cheeks thus turned on whether the FLSA was an
 4   “applicable federal statute,” without narrowing that reference to the
 5   text of the statute, such that court approval was necessary before
 6   FLSA claims could be dismissed with prejudice by stipulation of the
 7   parties.89    The Cheeks Court concluded that the FLSA met the
 8   “applicable federal statute” exception to Rule 41(a)(1)(A)(ii) because
 9   of “the unique policy considerations underlying the FLSA” and the
10   “underlying purpose” of the Act.90 Therefore, it held that stipulated
11   dismissals settling FLSA claims with prejudice pursuant to Rule
12   41(a)(1)(A)(ii) require approval of either the district court or the DOL
13   to take effect.91

14           The holding in Cheeks was limited to Rule 41(a)(1)(A)(ii)
15   dismissals with prejudice.           The court did not consider “whether
16   parties may settle such cases without court approval or DOL
17   supervision by entering into a Rule 41(a)(1)(A) stipulation without
18   prejudice.”      Nor did it address other avenues for dismissal or
19   settlement of claims, including Rule 68(a) offers of judgment.92 The
20   district court and amici concede that “the question addressed in
21   Cheeks was limited to Rule [41(a)(1)(A)(ii)] stipulations dismissing
22   FLSA claims with prejudice.”93 Thus, while Cheeks may provide some
23   support for the proposition that Rule 68(a) offers of judgment also

     88 Fed. R. Civ. P. 41(a)(1)(A)(ii) (emphasis added).
     89 Cheeks, 796 F.3d at 204.
     90 Id. at 206.

     91 Id.

     92 Id. at 201 n.2.

     93 Sec’y of Labor Br. at 28; see also Hasaki Rest., Inc., 319 F.R.D. at 116 (“Cheeks may

     not apply a fortiori to a Rule 68 FLSA settlement given its reliance on the language
     of Rule 41 . . . .”).
     27                                                                   No. 17‐3388‐cv

 1   require judicial approval, it is not directly controlling, and we are not
 2   required to adopt its reasoning.94

 3           For the reasons discussed in the preceding section for our
 4   conclusion, that the FLSA does not require judicial approval of Rule
 5   68(a) offers of judgment, we decline to extend Cheeks’ judicial
 6   approval requirement to that context. Moreover, we do not believe
 7   that all of the reasons supporting the decision in Cheeks comfortably
 8   apply in the Rule 68(a) context. For one, Rule 41(a)(1)(A) contains an
 9   explicit command that judicial approval of a stipulated dismissal is
10   necessary if a federal statute so requires, but as discussed, Rule 68(a)
11   does not contain a similar, explicit exception. Also, the Cheeks opinion
12   expressed concern that Rule 41(a)(1)(A)(ii) stipulated dismissals are
13   not filed publicly on the docket, and therefore, are akin to the private,
14   secret settlements and waivers of an employee’s FLSA rights that the
15   Supreme Court refused to enforce in Brooklyn Savings and Gangi.95
16   Rule 68(a) avoids any secret settlement problem because offers of
17   judgment are publicly filed on the court’s docket, as required by the
18   Rule.96

19           Nor are we alone in confining Cheeks to Rule 41(a)(1)(A)(ii)
20   stipulated dismissals with prejudice; the majority of district court
21   judges to consider the issue in our circuit have also held that Cheeks
22   should not be extended to apply to Rule 68(a) offers of judgment.97

     94 See generally, Pierre N. Leval, Judging Under the Constitution: Dicta About Dicta, 81
     N.Y.U. L. Rev. 1249, 1259 (2006) (“Stare Decisis requires a court to adhere only to
     its decisions—its holdings—not to any utterance the court may make.”).
     95 Cheeks, 796 F.3d at 201 (describing the issue as “whether judicial approval of, and

     public access to, FLSA settlements is required” (emphasis added)).
     96 See Fed. R. Civ. P. 68(a) (requiring the parties to file the offer and notice of

     acceptance, plus proof of service, with the district court before the clerk can enter
     the judgment).
     97 See Anwar v. Stephens, No. 15‐CV‐4493 (JS) (GRB), 2017 WL 455416, at *1 (E.D.N.Y.

     Feb. 2, 2017) (“The majority of district courts in this Circuit have held that judicial
     28                                                                   No. 17‐3388‐cv

 1   Accordingly, we decline to extend Cheeks’ holding.

 2                  d. The FLSA as a Uniquely Protective Statute

 3           Finally, the district court and amici refer to the FLSA’s “unique
 4   features and policies,” or the Act’s “remedial and humanitarian
 5   goals” as justification for requiring judicial approval of Rule 68(a)
 6   offers of judgment settling FLSA claims and it is not difficult to view
 7   the Dissent as similarly motivated. We take issue with this line of
 8   reasoning for various reasons.

 9           “Congressional intent is discerned primarily from the statutory
10   text.”98 Appeals to broad remedial goals and congressional purpose
11   are not a substitute for the actual text of the statute when it is clear.99
12   In accordance with the Constitution’s separation of powers, courts are
13   charged with interpreting the actual text of the laws Congress enacts,
14   and not with rewriting or expanding the scope of the laws in the
15   absence of statutory text, no matter how much one may think it may
16   advance purported remedial goals or represent congressional
17   intent.100 Indeed, the Supreme Court very recently emphasized the

     approval is not required for Rule 68 offers of judgment . . . . This Court concurs
     with the majority and declines to ignore the mandatory language of Rule 68.”
     (internal quotation marks omitted)).
     98 CTS Corp. v. Waldburger, 573 U.S. 1, 12 (2014).

     99 See Magwood v. Patterson, 561 U.S. 320, 334 (2010) (“We cannot replace the actual

     text with speculation as to Congress’ intent.”); cf. C.I.R. v. Asphalt Prods. Co., Inc.,
     482 U.S. 117, 121 (1987) (“Judicial perception that a particular result would be
     unreasonable may enter into the construction of ambiguous provisions, but cannot
     justify disregard of what Congress has plainly and intentionally provided.”).
     100 See Baker Botts L.L.P. v. ASARCO LLC, 135 S. Ct. 2158, 2169 (2015) (“Our job is to

     follow the text even if doing so will supposedly undercut a basic objective of the
     statute.” (internal quotation marks omitted)); see also Henson, 137 S. Ct. at 1725
     (“[W]hile it is of course our job to apply faithfully the law Congress has written, it
     is never our job to rewrite a constitutionally valid statutory text under the banner
     of speculation about what Congress might have done had it faced a question that,
     on everyone’s account, it never faced.”).
     29                                                               No. 17‐3388‐cv

 1   importance of giving the FLSA nothing more than a “fair reading”
 2   when it rejected the argument that the FLSA’s statutory exceptions
 3   should be narrowly‐construed and characterized the premise that
 4   “the FLSA pursues its remedial purpose at all costs” as “flawed.”101

 5          While interpreting the FLSA to require judicial approval of
 6   Rule 68(a) offers of judgment settling FLSA claims might be consistent
 7   with some of the policy goals of Congress when it enacted the FLSA
 8   in 1938, we also agree with Hasaki that the Congressional policy of
 9   timely entry of judgment upon acceptance of a Rule 68(a) offer would
10   be frustrated by a judicial approval requirement. Moreover, the fact
11   that a Rule 68(a) stipulated judgment must be entered by the clerk of
12   the court does not mean that the judgment cannot later be challenged
13   as deficient under the common law of contract102 or under Rule 60(b)
14   for fraud, misrepresentation, misconduct, or “any other reason that
15   justifies relief.”103 In any event, we do not see our role as weighing
16   these policy considerations and determining which policy to
17   prioritize when the statute is unambiguous.                 That is the job of
18   Congress.104

19          Moreover, the fact that a judicial approval requirement might
20   further the broad, remedial policy goals of the FLSA does not
21   necessarily mean that Congress would have enacted such a

     101 Encino Motorcars, LLC v. Navarro, 138 S. Ct. 1134, 1142 (2018).
     102 See Goodheart Clothing v. Laura Goodman Ent., 962 F.2d 268, 272 (2d Cir. 1992)
     (offers of judgment are contracts treated according to ordinary contract
     principles).
     103 Fed. R. Civ. P. 60(b).

     104 See Rodriguez v. United States, 480 U.S. 522, 525–26 (1987) (“[N]o legislation

     pursues its purpose at all costs. Deciding what competing values will or will not
     be sacrificed to the achievement of a particular objective is the very essence of
     legislative choice—and it frustrates rather than effectuates legislative intent
     simplistically to assume that whatever furthers the statute’s primary objective must
     be the law.”).
     30                                                                    No. 17‐3388‐cv

 1   requirement if it had considered the question, for “it is quite mistaken
 2   to assume, as [amici] would have us, that ‘whatever’ might appear to
 3   ‘further the statute’s primary objective must be the law.’”105 Were that
 4   the case, we would be a short step away from requiring judicial
 5   approval of a variety of settlements that involve vulnerable citizens,
 6   such as discrimination suits under Title VII of the Civil Rights Act and
 7   § 1983 claims of serious police misconduct.106

 8              With respect, the Dissent also disregards the costs imposed by
 9   the requirement that it would read into FLSA and thus into Rule 68.
10   A frequently cited district court case in this Circuit on the conduct of
11   fairness reviews cites no fewer than nine factors (as well as the well‐
12   worn “totality of the circumstances” standard) to guide the fairness
13   inquiry. See Wolinsky v. Scholastic Inc., 900 F. Supp. 2d 332, 335–36
14   (S.D.N.Y. 2012) (listing such factors as “the presence of other
15   employees situated similarly to the claimant,” the “likelihood that the
16   claimant’s circumstance will recur,” and “a history of FLSA non‐
17   compliance by the same employer or others in the same industry or
18   geographic region”). But information regarding these factors may be
19   unavailable in the early stages of litigation during which many Rule
20   68 offers occur.          Often there will not even be basic information
21   concerning the claimed hours worked or rate of pay, leaving courts
22   ill‐equipped to conduct a fairness review. Cf. Mamani v. Licetti, No.
23   13‐CV‐7002 (KMW)(JCF), 2014 WL 2971050, at *2 (S.D.N.Y. July 2,
24   2014) (finding insufficient information to adjudicate the fairness of a
25   proposed FLSA settlement where the parties failed to provide their
26   estimate of the hours worked or the applicable wage). The reviewing
27   court may thus be required to order the parties to come forward with
28   more information, expending time and resources, and unnecessarily

     105   Henson, 137 S. Ct. at 1725 (brackets omitted) (quoting Rodriguez, 480 U.S. at 526).
     106   See Appellant’s Br. at 18–19.
     31                                                                   No. 17‐3388‐cv

 1   increasing attorney’s fees. See Picerni v. Bilingual Seit & Preschool Inc.,
 2   925 F. Supp. 2d 368, 377 (E.D.N.Y. 2013) (noting that “the vast majority
 3   of FLSA cases” involve claims that “are simply too small, and the
 4   employer’s finances too marginal, to have the parties take further
 5   action if the Court is not satisfied with the settlement”), abrogated by
 6   Cheeks, 796 F.3d 199 (2d Cir. 2015). And this means delay. As
 7   represented at oral argument, a fairness hearing could impose a delay
 8   of more than six months on the recovery due to plaintiffs.

 9           We do not dwell here on policy considerations given that it is
10   not possible on this record to perform a cost–benefit analysis as to the
11   requirement of fairness hearings in Rule 68 settlements of the
12   thousands of FLSA cases filed in this Circuit each year. And even if
13   such an analysis were possible, that is not our job. As the Dissent
14   would have it, this court should insert a paternalistic judicial fairness
15   proceeding into Rule 68(a) settlements of FLSA claims that Congress
16   does not require and the parties, represented by counsel, do not want.
17   Our holding to the contrary, and our reasoning supporting it, is
18   dismissed as “simplistic” by the Dissent, to which our answer is that
19   there are frequently times when “less is more,”107 and this is one of
20   them.      Congress knows how to require judicial approval of
21   settlements and dismissals when it wants to.108 Appeals to the broad
22   remedial goals and uniquely protective qualities of the FLSA do not
23   authorize us to write a judicial approval requirement into the FLSA,
24   and thereby into Rule 68(a), when the text of both provisions is silent
25   as to such a requirement.

26

     107 See generally Phillip C. Johnson, Miles van der Rohe 49 (1947) (ascribing the phrase
     “less is more” to the minimalist architect, Miles van der Rohe).
     108 See supra Section I.
    32                                                              No. 17‐3388‐cv

1                                  CONCLUSION

2          We have considered amici’s other arguments and find them to
3   be without merit. 109 For the reasons we have stated, we hold that
4   judicial approval is not required of Rule 68(a) offers of judgment
5   settling FLSA claims. We therefore REVERSE and VACATE the
6   district court’s order to the contrary and REMAND to the district
7   court with instructions that the Clerk of the Court enter the judgment
8   as stipulated in the parties’ accepted Rule 68(a) offer.

    109Appointed amicus also makes the argument that because Rule 68(a) offers of
    judgment are “contracts to be interpreted according to ordinary contract
    principles,” Steiner v. Lewmar, Inc., 816 F.3d 26, 31 (2d Cir. 2016), and because
    “employees cannot waive their rights under the FLSA, they cannot validly accept
    offers to settle their claims unless the offers are approved by the court or DOL,”
    PCLG Br. at 21–22. This argument confuses the concepts of capacity to enter a
    contract with enforceability of a contract. In Brooklyn Savings and Gangi, the
    Supreme Court described the question as whether waivers and releases of FLSA
    liability were enforceable as an affirmative defense for liquidated damages. At no
    time did the Court discuss, or did the parties argue, that the employees’
    agreements to waive or release their rights to liquidated damages under FLSA
    were invalid for lack of contractual capacity. Indeed, if employees had no
    contractual capacity to settle or dismiss their FLSA claims, then there would have
    been no need for the Court to expressly reserve the question of whether an
    employee’s release of his right to liquidated damages as part of a bona fide
    settlement of a bona fide dispute over the number of hours worked or the regular
    rate of pay would be enforceable. See Gangi, 328 U.S. at 114–15.
 1   CALABRESI, Circuit Judge, dissenting:

 2          This is a simple case of statutory misinterpretation. I believe the
 3   majority misreads the language, the history, and the design of the Fair
 4   Labor Standards Act (“FLSA”). It also ignores the longstanding
 5   position of the Supreme Court of the United States, the Department
 6   of Labor, and seven Courts of Appeals—including our own. I
 7   therefore respectfully, but strongly, dissent.

 8                              INTRODUCTION

 9          The Plaintiff in this case alleged, on behalf of himself and all
10   other similarly situated employees, that Defendants‐Appellants failed
11   to pay him overtime in violation of the FLSA. See 29 U.S.C. § 207(a).
12   The FLSA states that any employer who commits such a violation
13   “shall be liable to the employee or employees affected in the amount
14   of . . . their unpaid overtime compensation . . . and in an additional
15   equal amount as liquidated damages.” Id. § 216(b). The statute in its
16   terms provides two, and only two, methods for resolving such
17   liability:

18      1. “An action to recover the liability prescribed in the preceding
19          sentence[] may be maintained against any employer . . . in any
20          Federal or State court of competent jurisdiction” by the
21          employee(s) or by the Secretary of Labor. Id. § 216(b)‐(c); or

22      2. The Secretary of Labor “is authorized to supervise the payment
23          of the . . . unpaid overtime compensation owing to any
24          employee,” and “the agreement of any employee to accept such
25          payment shall upon payment in full constitute a waiver by such
                                         1
 1         employee of any right he may have . . . to such . . . unpaid
 2         overtime compensation and an additional equal amount as
 3         liquidated damages.” Id. § 216(c).

 4         The majority, however, finds a third, implied method of
 5   resolving such claims of FLSA overtime liability: a private Rule 68(a)
 6   settlement agreement negotiated only by the employer and employee,
 7   without oversight by any third party. See Fed. R. Civ. P. 68(a).

 8         The reasoning of the majority is easily enough stated. Rule
 9   68(a), as written, makes settlement agreements under that rule
10   mandatorily applicable. And the majority asserts that, if that meant
11   that no Rule 68(a) settlements could be challenged and all were
12   untouchable, that would be the end of this case. But, as the majority
13   is willing to accept for its analysis, Rule 68(a)’s seemingly absolute
14   language is not in fact absolute. Rather, it allows exceptions where a
15   settlement violates another statute or rule. See Maj. Op. 9‐10; see also
16   Gordon v. Gouline, 81 F.3d 235 (D.C. Cir. 1996); White v. Alabama, 74
17 F.3d 1058 (11th Cir. 1996); Blair v. Shanahan, 38 F.3d 1514 (9th Cir.
18   1994); Cotton v. Hinton, 559 F.2d 1326 (5th Cir. 1977); 31 U.S.C. §
19   3730(b)(1); N.Y. C.P.L.R. §§ 1207, 1208. In such instances, the Rule
20   68(a) settlement yields to the other statute or rule.

21         The majority does not, however, read subsection 216(c) of the
22   FLSA as superseding Rule 68(a)’s mandatory language. It reaches this
23   conclusion because it fails to find in subsection 216(c) an express
24   “textual requirement for judicial approval.” Maj. Op. 13; see also id. at
25   12, 17‐20.

                                         2
 1           But this is an incorrect reading of both subsection 216(c) and
 2   the FLSA as a whole. In fact, subsection 216(c) amounts to such a
 3   command, though no robotic words to that effect are used. And the
 4   FLSA, as a whole, prohibits the kind of unsupervised private
 5   settlement agreements that the application of Rule 68(a) to FLSA
 6   claims would bring about. Thus, the FLSA contains just the kind of
 7   “clear expression of congressional intent” that the majority seems to
 8   require. Maj. Op. 11, 18 (selectively quoting Marek v. Chesny, 473 U.S.
9   1, 11‐12 (1985)).1 It therefore supersedes Rule 68(a)’s mandatory
10   language.

11           The bulk of the majority opinion is spent seeking to distinguish
12   cases that run against it. It repeatedly tries to explain why—though
13   those cases are obviously in tension with the majority’s result—the
14   majority is not absolutely bound by them. And so distinctions without
15   differences are, again and again, propounded, as are occasional
16   distinctions with only slight differences.

17           Yet, in the end, the majority always returns to its one simple
18   and simplistic argument: Rule 68(a) settlements are mandatory and

     1   Actually, the requirement in Marek is not as strict as the majority makes it out
         to be. For Marek says both that a “clear expression of congressional intent” is
         needed for a statute to supersede a federal rule of procedure, and that the test
         is whether “applying Rule 68 in the context of [the statute] is consistent with
         the policies and objectives of [the statute].” 473 U.S. at 11. The Court in Marek
         does not clarify the relationship between these two (potentially) different
         standards. Nevertheless, even assuming Marek requires just what the majority
         says, subsection 216(c) and the FLSA as a whole easily satisfy that standard.

                                               3
 1   subject to no controls, unless a statute precludes such absolute
 2   applicability, and the FLSA has no words precisely to that effect.
 3   Reading the FLSA to permit such settlements, however, violates all
 4   rules of statutory interpretation, the decisions of all relevant courts,
 5   and common sense as well. The FLSA, in fact, is paradigmatically a
 6   statute that prohibits unsupervised private settlement agreements,
 7   including those made under Rule 68(a).

 8    I.      The Meaning of Subsection 216(c) of the FLSA

 9         The majority says that its reading of subsection 216(c) of the
10   FLSA as not superseding Rule 68(a) is “unambiguous.” Maj. Op. 13.
11   This is a most unusual use of the term. Normally, “unambiguous”
12   goes to the plain meaning of words. Here, the majority applies it to
13   what it considers to be the absence of words. And the majority does
14   this for a simple reason: it believes that, if the absence of words can
15   be deemed unambiguous, then they can disregard all “other tools of
16   statutory interpretation.” Id. at 21. But, in fact, the FLSA does not
17   “unambiguously” state what the majority claims—quite the opposite.
18   It manifestly requires the rejection of the majority’s approach. The
19   majority’s reading of the FLSA violates at least three rules of statutory
20   interpretation.

21            A. The Whole Act Rule

22         First, in its reading of subsection 216(c), the majority fails to
23   consider the statute as a whole, which makes clear that subsection
24   216(c)—the provision that carves out a specific set of supervised
25   settlement   agreements     as   valid   under   the   FLSA—prohibits

                                        4
 1   unsupervised private settlement agreements. It is, of course, a
 2   “fundamental canon of statutory construction that the words of a
 3   statute must be read in their context and with a view to their place in
 4   the overall statutory scheme.” Food and Drug Admin. v. Brown &
 5   Williamson Tobacco Corp., 529 U.S. 120, 133 (2000) (quoting Davis v.
 6   Michigan Dep’t of Treasury, 489 U.S. 803, 809 (1989)). In particular, “[i]n
 7   determining whether Congress has specifically addressed the
 8   question at issue, a reviewing court should not confine itself to
 9   examining a particular statutory provision in isolation. The
10   meaning—or ambiguity—of certain words or phrases may only
11   become evident when placed in context.” Id. at 132; see also Jacobs v.
12   N.Y. Foundling Hosp., 577 F.3d 93, 98‐100 (2d Cir. 2009) (per curiam).

13         Even a cursory review of the FLSA reveals several provisions
14   that indicate that subsection 216(c) limits the mechanisms by which
15   employers and employees can settle FLSA wage/hour claims. First,
16   the statute sets a mandatory floor for wages (and a mandatory ceiling
17   for standard workweek hours) for virtually all employees in the
18   United States. See 29 U.S.C. §§ 206, 207. Second, the statute makes it a
19   federal crime for an employer willfully to violate those wage
20   requirements. See id. § 215(a)(2). Third, the statute gives district courts
21   the authority to issue injunctions against employers who “withhold[ ]
22   payment of minimum wages or overtime compensation found by the
23   court to be due to employees.” Id. § 217. Fourth, in the event that an
24   employer violates the wage requirements, the statute specifically
25   defines the damages for which employers “shall be liable to the
26   employee” to be the full amount of their unpaid wages and “an

                                         5
 1   additional equal amount as liquidated damages.” Id. § 216(b)
 2   (emphasis added).

 3         These statutory requirements set minimum levels of wages that
 4   must be given to employees. They also establish the minimum that an
 5   employer who violated these requirements is obligated to pay. They
 6   are mandatory. As such, they represent a clear expression of
 7   congressional intent to prohibit private settlements that go below the
 8   statutory mandates.

 9         Subsection 216(c) permits settlement agreements that are
10   supervised by the Department of Labor (and, as we shall see infra,
11   courts) because such supervision assures that the core statutory
12   obligations will be met. Rule 68(a) settlement agreements, instead,
13   privately determine what the employer must pay, regardless of the
14   statutory requirements. Therefore, the majority’s conclusion that
15   subsection 216(c) allows unsupervised Rule 68(a) private settlements
16   is in obvious conflict with the text of the statute as a whole.

17             B. Statutory Language Should Not Be Rendered Superfluous or
18                Meaningless

19         Second, the majority overlooks the fact that its reading makes
20   the existence of subsection 216(c) meaningless. It is a basic principle
21   of statutory    interpretation that, where Congress “explicitly
22   enumerates certain exceptions” within a statute, “additional
23   exceptions are not to be implied, in the absence of evidence of a
24   contrary legislative intent.” TRW Inc. v. Andrews, 534 U.S. 19, 28
25   (2001) (quoting Andrus v. Glover Constr. Co., 446 U.S. 608, 616‐17

                                         6
 1   (1980)). That is especially true where the additional exception “would
 2   not merely supplement the explicit exception,” but “would in
 3   practical effect render that exception entirely superfluous.” Id. at 29.

 4         Here, subsection 216(c) says that private settlement agreements
 5   resolving FLSA wage/hour liability constitute valid waivers of FLSA
 6   plaintiffs’ claims when they are supervised by the Secretary of Labor. But
 7   subsection 216(c) is rendered superfluous by the majority’s
 8   interpretation. Why specify that settlements supervised by the Labor
 9   Secretary are valid if, as the majority maintains, private settlement
10   agreements—such as those under Rule 68(a)—are always allowed
11   under the statute? Cf., e.g., Jacobs, 577 F.3d at 100 (observing that,
12   when “Congress singled out specific non‐profits” to be deemed
13   subject to the FLSA’s requirements, it implicitly excluded all other
14   non‐profits).

15             C. The Statutory History

16         Third, and perhaps most important, the majority ignores
17   completely the significance of the statutory history of subsection
18   216(c). The majority repeatedly argues that “extrinsic evidence” and
19   legislative history should not be consulted unless a statute is
20   ambiguous. See Maj. Op. 20‐21 & n.75. Putting aside the fact that the
21   FLSA certainly does not unambiguously permit the majority’s result,
22   the majority confuses legislative history for statutory history. In doing
23   that, it takes the unprecedented position that statutory history is
24   irrelevant in understanding the meaning of a statute.

                                          7
 1         It is true that the Supreme Court has said that legislative history
 2   generally does not come into play when the statute is unambiguous.
 3   See, e.g., Matal v. Tam, 137 S. Ct. 1744, 1756 (2017). But no such rule
 4   applies to statutory history. See, e.g., BNSF Ry. Co. v. Loos, 139 S. Ct.
5   893, 906 (2019) (Gorsuch, J., dissenting) (“To be clear, the statutory
 6   history I have in mind here isn’t the sort of unenacted legislative
 7   history that often is neither truly legislative . . . nor truly historical
 8   . . . . Instead, I mean here the record of enacted changes Congress made
 9   to the relevant statutory text over time, the sort of textual evidence
10   everyone agrees can sometimes shed light on meaning.”).

11         Statutory history—especially of the kind delineating changes
12   made to the statute by Congress in response to decisions by the
13   federal courts—is relevant regardless of whether the statute is
14   ambiguous, and, indeed, is commonplace in the opinions of the High
15   Court. See, e.g., Burwell v. Hobby Lobby Stores, Inc., 573 U.S. 682, 693‐96
16   (2014); Hinck v. United States, 550 U.S. 501, 503‐07 (2007); Booth v.
17   Churner, 532 U.S. 731, 739‐41 (2001). Statutory history is not a kind of
18   “extrinsic evidence” as the majority suggests. Maj. Op. 20‐22. It is an
19   accepted and uncontroversial tool in the interpretation of statutory
20   texts. See, e.g., Antonin Scalia & Bryan A. Garner, Reading Law: The
21   Interpretation of Legal Texts 256 (2012) (“If the legislature amends or
22   reenacts a provision other than by way of a consolidating statute or
23   restyling project, a significant change in language is presumed to
24   entail a change in meaning.”).

25         The statutory history of subsection 216(c) of the FLSA makes
26   crystal clear that, as the text of the statute itself indicates, the FLSA

                                         8
 1   does not, as a general matter, allow unsupervised private settlement
 2   of wage/hour claims.

 3           The original FLSA did not contain subsection 216(c). See Fair
 4   Labor Standards Act of 1938, Pub. L. No. 75‐718, 52 Stat. 1060 (1938).
 5   Not surprisingly, almost immediately, some employers sought to
 6   resolve their statutory liability for FLSA wage/hour claims through
 7   private settlement agreements negotiated between the employer and
 8   employee. In most such cases, the employer remitted to the
 9   employees some portion of their unpaid backpay; the employees then
10   signed a contract waiving their rights to bring suit to recover any
11   additional unpaid backpay and/or liquidated damages owed under
12   the statute. 2

13           The Supreme Court, in a pair of cases—Brooklyn Savings Bank v.
14   O’Neil, 324 U.S. 697 (1945), and D.A. Schulte, Inc. v. Gangi, 328 U.S. 108
15   (1946)—held that, despite the lack of any specific prohibiting
16   language, the FLSA banned almost all such settlements. Thus, in
17   Brooklyn Savings Bank, the Court held that private settlement
18   agreements in which the employer pays the employee less than the
19   employer’s statutory liability (in the amount of unpaid backpay
20   and/or liquidated damages) in return for the employee’s waiver of
21   their rights violated the FLSA. 324 U.S. at 707‐09 (liquidated
22   damages); id. at 713‐14 (backpay). Then, in Gangi, the Court extended

     2   The lower courts that then addressed the issue almost uniformly held that the
         private agreements violated the FLSA. See Brooklyn Savs. Bank v. O’Neil, 324 U.S.
697, 708 n.21 (1945) (collecting cases from the lower courts).

                                               9
 1   Brooklyn Savings Bank, and held that such agreements are invalid even
 2   if they are entered into for the purpose of settling a bona fide dispute
 3   as to whether the employer is covered under the FLSA. 328 U.S. at
 4   114.

 5           The Court did leave open the possibility that some limited
 6   private settlement agreements involving FLSA wage/hour claims
 7   might be acceptable.

 8           First, in Gangi, the Court observed in dicta that settlement
 9   agreements arrived at through stipulated judgments may be valid
10   because “the requirement of pleading the issues and submitting the
11   judgment to judicial scrutiny may differentiate stipulated judgments
12   from compromises by the parties.” 328 U.S. at 114 n.8. In other words,
13   it indicated that court‐supervised settlements might be valid under the
14   FLSA.3

15           Second, in both Brooklyn Savings Bank and Gangi, the Court—
16   because the issue was not squarely presented—declined to address
17   whether private settlement agreements might be valid when they are

     3   In Footnote 8, the Gangi Court was reacting to the petitioner’s argument that
         private compromises between the parties are permitted under the FLSA in light
         of North Shore Corporation v. Barnett, 323 U.S. 679 (1944). But, as explained infra
         at 15‐16, North Shore Corp. involved a stipulated judgment filed with the
         Supreme Court for its review and thus, as Gangi noted, subjected to “judicial
         scrutiny.” It was this difference between judicially scrutinized and private
         settlements that the Court in Gangi wanted to emphasize.

                                               10
 1   the product of bona fide disputes as to the number of hours worked
 2   or the regular rate of employment. 324 U.S. at 714; 328 U.S. at 114‐15.4

 3           But apart from these two possibilities—neither of which are
 4   relied on by the majority in the instant case—the Court made clear
 5   that the FLSA did not permit private settlements.5

 6           The breadth of these holdings created problems for the
 7   Department of Labor. The Department had adopted a policy of
 8   encouraging employers to make voluntary restitution of unpaid
 9   backpay to their employees in cases where litigation seemed
10   unnecessary. Fair Labor Standards Amendments of 1949, S. Rep. No.
11   81‐640, 81st Cong., 1st Sess., reprinted in 1949 U.S.C.C.A.N. 2241, 2248.
12   But employers declined to cooperate with the Department of Labor.
13   They feared that, despite the Department of Labor’s supervision, such

     4   In doing so, the Court was leaving open the possibility that bona fide disputes
         as to the number of hours worked or the regular rate of employment were valid
         under the FLSA, as some lower courts had concluded. See Gangi, 328 U.S. at 115
         n.10 (citing Strand v. Garden Valley Telephone Co., 51 F. Supp. 898, 904‐05 (D.
         Minn. 1943) (characterizing such bona fide disputes as “fact” disputes as
         opposed to “legal” ones and therefore potentially subject to compromise)).
     5   Defendants‐Appellants alleged at oral argument that their case involves a bona
         fide factual dispute. But they do not point to any evidence in the record to
         support that allegation, nor is it ascertainable from the face of their Rule 68(a)
         settlement agreement. Court supervision of the proposed settlement is, of
         course, what the District Court judgment, that the majority reverses today,
         ordered.

                                               11
 1   settlements were not valid under Brooklyn Savings Bank and Gangi. Id.
 2   at 2249.

 3         To solve this problem, the Secretary of Labor requested, in
 4   testimony before the Senate, that the Department of Labor be given
 5   the power to supervise the private settlement of FLSA wage/hour
 6   claims, with such supervised settlements fully resolving the
 7   employer’s statutory liability. Id. at 2247‐48. And that is precisely
 8   what happened: in 1949, Congress amended the FLSA, inserting
 9   subsection 216(c). See Fair Labor Standards Amendments of 1949,
10   Pub. L. No. 81‐393, 63 Stat. 910, 919 (1949). In other words, Congress,
11   at the request of the Department of Labor, added “Department of
12   Labor‐supervised settlements” to “court‐supervised settlements” as
13   exceptions to the FLSA’s general prohibition against private
14   settlement agreements.

15         Two things are clear from this statutory history. First, Congress
16   was fully aware that the FLSA was being interpreted to prohibit
17   private settlements of FLSA wage/hour claims. Second, in response to
18   this interpretation, Congress, far from overturning Brooklyn Savings
19   Bank and Gangi or otherwise authorizing private settlements more

                                       12
1   generally, amended the FLSA to allow such settlements if and when
2   they were supervised by the Department of Labor.6

    6   Congress’ approval of the Supreme Court’s interpretation of the FLSA in
        Brooklyn Savings Bank and Gangi can also be seen in its passage of the Portal‐to‐
        Portal Act of 1947. Congress inserted a provision into that Act which amended
        the FLSA to permit private settlements of FLSA wage/hour claims for causes of
        action which accrued prior to May 14, 1947. See Portal‐to‐Portal Act of 1947,
        Pub. L. No. 80‐49, 61 Stat. 84, 86 (codified at 29 U.S.C. § 253 (enacted May 14,
        1947)). But Congress limited such settlements to those involving “a bona fide
        dispute as to the amount payable by the employer.” 29 U.S.C. § 253(a). Congress
        also prohibited such settlements from “be[ing] so compromised to the extent
        that such compromise is based on an hourly wage rate less than the minimum
        required under [the FLSA], or on a payment for overtime at a rate less than one
        and one‐half times such minimum hourly wage rate.” Id. In essence, then,
        Congress confirmed the existence of the bona fide dispute exception that the
        Supreme Court had left open in Brooklyn Savings Bank and Gangi, but only for
        those FLSA wage/hour claims that had accrued prior to May 14, 1947.
             To the extent the majority claims that the Portal‐to‐Portal Act signals
        Congress’s disapproval of the Supreme Court’s decisions in Brooklyn Savings
        Bank and Gangi, the majority patently ignores the text of that statute. Through
        the Portal‐to‐Portal Act, Congress was simply abrogating three Supreme Court
        decisions that made employers liable for their employees’ “portal‐to‐portal”
        activities, such as time spent walking on the employer’s premises from the time
        clock to the work bench. See Tennessee Coal, Iron & R.R. Co. v. Muscoda Local No.
        123, 321 U.S. 590 (1944); Jewell Ridge Coal Corp. v. Local No. 6167, United Mine
        Workers of Am., 325 U.S. 161 (1945); Anderson v. Mt. Clemens Pottery Co., 328 U.S.
680 (1946). “Many employers . . . did not have a custom or practice of paying
        their employees for such preliminary activities. Consequently, they faced a
        flood of FLSA suits.” Sepulveda v. Allen Family Foods, Inc., 591 F.3d 209, 217 (4th
        Cir. 2009). This specific line of Supreme Court decisions—and manifestly not
        the core FLSA jurisprudence that required supervision of settlements—is what
        occasioned “the express congressional disapproval” that the majority cites. Maj.

                                              13
 1           Thus, as interpreted by the Supreme Court in Brooklyn Savings
 2   Bank and Gangi, and as amended by Congress in 1949, subsection
 3   216(c) of the FLSA prohibits private settlements as a general matter,
 4   and—at most—allows three forms of settlement agreements: (1) a
 5   settlement supervised by the Department of Labor; (2) a settlement
 6   subjected to judicial scrutiny; and (3) perhaps, a settlement negotiated
 7   pursuant to a bona fide dispute as to hours worked or the rate of
 8   employment.7

 9           Significantly, and unlike the settlements permitted by the High
10   Court and Congress, Rule 68 settlements are entirely at the will of
11   private parties and subject to none of the above‐mentioned validity
12   controls. It follows that the majority’s position permitting
13   uncontrolled Rule 68 settlements flies in the face of the FLSA, and thus
14   cannot be correct.

         Op. 24 n.84. See also Addison v. Huron Stevedoring Corp., 204 F.2d 88, 96 (2d Cir.
         1953) (L. Hand, J., concurring) (quoting the critical congressional language on
         which the majority relies and explaining how it refers to Tenneseee Coal, Jewell
         Ridge, and Mt. Clemens).
     7   As mentioned earlier, this third exception is not relevant to the instant case. Our
         Circuit has since said that FLSA claims are arbitrable. See Rodriguez‐Depena v.
         Parts Authority, Inc., 877 F.3d 122 (2d Cir. 2017). But that is because the kind of
         third‐party supervision that arbitration affords was deemed to be sufficiently
         similar to court (or Department of Labor) approval to be valid under the FLSA.
         See Mitsubishi Motors Corp. v. Soler Chrysler‐Plymouth, Inc., 473 U.S. 614, 628
         (1985) (“By agreeing to arbitrate a statutory claim, a party does not forgo the
         substantive rights afforded by the statute; it only submits to their resolution in
         an arbitral, rather than a judicial, forum.”).

                                               14
 1    II.      The Universal Understanding of the FLSA’s Requirements

 2          Quite apart from the majority’s incorrect understanding of the
 3   text and statutory history of subsection 216(c) specifically, the
 4   majority’s holding today, in its reading of the FLSA, goes against
 5   Supreme Court precedent, the decisions of six Courts of Appeals, the
 6   longstanding position of the Department of Labor, and our own
 7   Court’s case law.

 8             A. The Supreme Court

 9          The Supreme Court has, again and again, read the FLSA to
10   prohibit private settlement agreements. See, e.g., Brooklyn Savs. Bank,
11 324 U.S. at 706‐07; Gangi, 328 U.S. at 116; Barrentine v. Arkansas‐Best
12   Freight System, Inc., 450 U.S. 728, 740 (1981); Tony & Susan Alamo
13   Found. v. Sec’y of Labor, 471 U.S. 290, 302 (1985); United States v.
14   Mezzanatto, 513 U.S. 196, 206 n.4 (1995).

15          The majority attempts to distinguish these cases as not directly
16   addressing the question at issue here. See Maj. Op. 13‐20. It is true that
17   none of these cases involve the application of Rule 68(a) to FLSA
18   claims. But that does not mean that these cases—Supreme Court
19   decisions interpreting the design of the FLSA and its relationship to
20   private settlement agreements—are not directly relevant to our case.
21   For they all say that, as a general rule, FLSA wage/hour claims cannot
22   be resolved through private settlement agreements (which Rule 68(a)
23   settlements manifestly are). In other words, the distinctions the
24   majority makes are typically distinctions that make no difference to
25   the issue before us.

                                        15
 1           Perhaps unconfortable with the distinctions it makes, the
 2   majority      tries    to    shield     its     unprecedented        ruling     by    a
 3   mischaracterization of a one‐paragraph summary order of the
 4   Supreme Court. See Maj. Op. 18 & n.63 (discussing North Shore Corp.
 5   v. Barnett, 323 U.S. 679 (1944)). Despite what the majority suggests,
 6   there is no indication whatever that the Supreme Court ordered the
 7   lower court in that case to enter a stipulated judgment without
 8   “reviewing the [parties’] stipulation for fairness.” Quite the contrary.
 9   For the Supreme Court reviewed the dispute in North Shore Corp.
10   twice—as the Fifth Circuit and the district court had previously done.8
11   The stipulated judgment was submitted to the Court in the form of a
12   joint motion, which the justices certainly reviewed before putting to
13   one side the quite separate issue on which they had granted certiorari.
14   It is because of this procedural history—which details extensive

     8   Overstreet v. N. Shore Corp., 43 F. Supp. 445 (S.D. Fla. 1941) (granting motion to
         dismiss on claim that toll road employees are engaged in interstate commerce
         and thus entitled to alleged unpaid minimum wages and overtime under the
         FLSA), aff’d, 128 F.2d 450 (5th Cir. 1942), rev’d, 318 U.S. 125, 129–30 (1943) (“If
         [roads and bridges] are used by persons and goods passing between the various
         States, they are instrumentalities of interstate commerce. Those persons who
         are engaged in maintaining and repairing such facilities should be considered
         as ‘engaged in commerce’ . . .” (internal citation omitted)); see also Overstreet v.
         N. Shore Corp., 52 F. Supp. 503 (S.D. Fla. 1943) (after a bench trial, holding that
         the employees are entitled to compensation under the FLSA for the full time
         they worked and awarding specific unpaid wages, overtime compensation,
         penalties, and attorneyʹs fees), aff’d sub nom., N. Shore Corp. v. Barnett, 143 F.2d
172 (5th Cir. 1944) (affirming on the grounds that the time spent by the toll
         collectors and ticket sellers in exempt activity and in non‐exempt activity
         cannot be segregated), cert. granted, 323 U.S. 691, vacated and modified on
         stipulations, 323 U.S. 679 (1944).

                                                16
 1   “judicial scrutiny” over the course of six distinct proceedings—that
 2   Gangi cited North Shore Corp. as an example of a stipulated judgment
 3   subjected to judicial scrutiny and thus permissible under the FLSA.
 4   Gangi, 328 U.S. at 113.

 5         Finally, perhaps because of the weakness of their attempts to
 6   distinguish the relevant Supreme Court authorities, the majority may
 7   be trying to avoid the Supreme Court’s precedents in an additional
 8   way. It is a way, however, that cannot be correct. The majority may
 9   be implying that the holdings of the two leading High Court cases—
10   Brooklyn Savings Bank and Gangi—are doubtful because the cases were
11   decided “seven decades” ago. Maj. Op. 16. Insofar as the majority is
12   suggesting that the Supreme Court, if presented with the issue today,
13   would reach a different conclusion, this is always a possibility. But of
14   course, unless and until that happens, we are bound by its decisions
15   on the books. See Agostini v. Felton, 521 U.S. 203, 237‐38 (1997).
16   Whether we agree with them or not, the Supreme Court’s precedents
17   on the FLSA govern us. And they expressly tell us that the FLSA was
18   passed in order to “prevent private contracts” between employers
19   and their employees that, “due to the unequal bargaining power as
20   between employer and employee,” result in employees accepting
21   substandard wages and excessive hours. Brooklyn Savs. Bank, 324 U.S.
22   at 706; see also 29 U.S.C. § 202.

23         The Court in Brooklyn Savings Bank explained that the FLSA
24   achieves this goal in two ways: at the front end, by setting mandatory,
25   federal “standards of minimum wages and maximum hours,”
26   Brooklyn Savs. Bank, 324 U.S. at 707; and at the back end, by requiring

                                         17
 1   “that an employer who gambles on evading the Act will be liable for
 2   payment not only of the basic minimum originally due but also
 3   damages equal to the sum left unpaid.” Id. at 709; see also 29 U.S.C. §
 4   216(b). To allow “waiver” of either provision by private contract
 5   would, the Supreme Court emphasized, “nullify” the Act. Brooklyn
 6   Savs. Bank, 324 U.S. at 707.

 7         The majority dismisses references to these readings of the FLSA
 8   as irrelevant appeals to public policy and to humanitarian goals. See
 9   Maj. Op. 28; see also id. at 28‐30. But the majority misses the point: these
10   are not abstract references to public policy considerations; they are
11   binding explanations of how the FLSA works. As the Supreme Court
12   said, the FLSA “forbids employee waiver of the minimum statutory
13   rate because of inequality of bargaining power,” and this same
14   statutory principle “prohibits these same employees from bargaining
15   with their employer in determining whether so little damage was
16   suffered that waiver of [statutory backpay or] liquidated damage is
17   called for.” Brooklyn Savs. Bank, 324 U.S. at 708; see also Gangi, 328 U.S.
18   at 115‐16. The FLSA’s general prohibition against private settlement
19   agreements is not an ideologically‐based interpretation, but rather,
20   according to the Supreme Court, an essential part of the design of the
21   statute.

22              B. The Other Circuits and the Department of Labor

23         The majority fails to mention entirely the decisions of six other
24   Courts of Appeals and the longstanding position of the Department

                                         18
 1   of Labor, whose readings of the FLSA unequivocally run counter to
 2   the majority’s position.

 3         The Courts of Appeals have uniformly adopted the position
 4   that the FLSA prohibits private settlement of wage/hour claims as a
 5   general rule. That includes the Fourth Circuit, Taylor v. Progress
 6   Energy, Inc., 493 F.3d 454, 460 (4th Cir. 2007), superseded by regulation
 7   on other grounds as recognized in, Whiting v. Johns Hopkins Hosp., 416 F.
8   App’x 312 (4th Cir. 2011); the Fifth Circuit, Bodle v. TXL Mortg. Corp.,
 9   788 F.3d 159, 161, 164‐65 (5th Cir. 2015); the Sixth Circuit, Boaz v. FedEx
10   Customer Information Servs., Inc., 725 F.3d 603, 606 (6th Cir. 2013); see
11   also Runyan v. Nat’l Cash Register Corp., 787 F.2d 1039, 1041‐42 (6th Cir.
12   1986) (en banc) (discussing the FLSA, Brooklyn Savings Bank, and
13   Gangi at length)); the Seventh Circuit, Walton v. United Consumers
14   Club, Inc., 786 F.2d 303, 306 (7th Cir. 1986); the Eighth Circuit, Copeland
15   v. ABB, Inc., 521 F.3d 1010, 1014 (8th Cir. 2008); and the Eleventh
16   Circuit, Lynn’s Food Stores, Inc. v. U.S. Dep’t of Labor, 679 F.2d 1350,
17   1353‐54 (11th Cir. 1982). The Ninth Circuit, in an unpublished
18   opinion, has also endorsed the general rule prohibiting purely private
19   settlement agreements. See Seminiano v. Xyris Enter., Inc., 602 F. App’x
20   682, 683 (9th Cir. 2015).

21         Moreover, several district courts in those circuits that have not
22   yet addressed the issue have also followed the general prohibition
23   against private settlement of FLSA claims. See, e.g., Kraus v. PA Fit II,
24   LLC, 155 F. Supp. 3d 516, 524‐29 (E.D. Pa. 2016) (following the general
25   prohibition and citing additional district court cases in the Third

                                         19
1   Circuit); Sarceno v. Choi, 66 F. Supp. 3d 157, 167‐70 (D.D.C. 2014)
2   (doing the same for the D.C. Circuit).9

3            Likewise, the Department of Labor—in amicus briefs,
4   congressional testimony, and agency rulemakings—has regularly
5   maintained that FLSA wage/hour claims can be settled by private
6   agreements only if they are supervised by a court or by the

    9   The circuits differ among themselves only on what, if any, exceptions—not
        relevant to the instant case—may apply to that general prohibition. The
        Eleventh Circuit, for instance, has held that the bona fide dispute exception does
        not apply; that circuit maintains that “[t]here are only two ways in which back
        wage claims arising under the FLSA can be settled or compromised by
        employees”—those approved by a court and those supervised by the
        Department of Labor. Lynn’s Food, 679 F.2d at 1352; see also McBride v. Legacy
        Components, LLC, ‐‐ F. App’x ‐‐ , No. 18‐14105, 2019 WL 2538019, at *1 n.1 (11th
        Cir. June 20, 2019). Several circuits have cited approvingly to the Eleventh
        Circuit’s rule. See, e.g., Walton v. United Consumers Club, Inc., 786 F.2d 303, 306
        (7th Cir. 1986); Seminiano v. Xyris Enter., Inc., 602 F. App’x 682, 683 (9th Cir.
        2015).
             The Fifth Circuit, on the other hand, has held that the bona fide dispute
        exception is valid under the FLSA. Martin v. Spring Break ’83 Productions, L.L.C.,
        688 F.3d 247, 257 (5th Cir. 2012). But the circuit has confined that exception to
        circumstances where there has been sufficient “factual development of the
        number of unpaid overtime hours []or of compensation due for unpaid
        overtime” such that a court can be “assured . . . that the release resulted from a
        bona fide dispute.” Bodle v. TXL Mortg. Corp., 788 F.3d 159, 161, 165 (5th Cir.
        2015). Other circuits have signaled some agreement with the Fifth Circuit’s
        approach. See, e.g., Barbee v. Big River Steel, LLC, 927 F.3d 1024, 1026‐27 (8th Cir.
        2019) (leaving open the possibility that private settlement agreements resolving
        bona fide disputes may be valid under the FLSA).

                                               20
 1   Department of Labor. See Brief of Sec’y of Labor as Amicus Curiae In
 2   Support of the District Court’s Decision at 19‐20.10 Significantly, it has
 3   consistently held this position for some forty years. Id.

 4            The majority tries to ignore this “laundry list of courts and
 5   cases,” Maj. Op. 19, by making a meaningless distinction between
 6   “private settlements” and “stipulated judgments.” According to the
 7   majority, those cases are silent on the issue of stipulated judgments
 8   and “hold only that purely private settlements of FLSA claims,
 9   independent of any litigation, are prohibited without judicial
10   approval or DOL supervision.” Id. But even this meaningless
11   difference is not in fact there, for the majority mischaracterizes those
12   precedents. See, e.g., Lynn’s Food, 679 F.2d at 1353 (“When employees
13   bring a private action for back wages under the FLSA, and present to
14   the district court a proposed settlement, the district court may enter a
15   stipulated judgment after scrutinizing the settlement for fairness.”).

16                C. Our Circuit’s Precedent in Cheeks

17            Our Court in Cheeks v. Freeport Pancake House, Inc., 796 F.3d 199
18   (2d Cir. 2015), also said that FLSA claims generally cannot be settled
19   through purely private agreements. And Cheeks cannot comfortably
20   be reconciled with the majority’s opinion today.

     10   The Department of Labor has taken the Eleventh Circuit position that no
          exception exists for bona fide disputes. Brief of Sec’y of Labor as Amicus Curiae
          In Support of the District Court’s Decision at 19‐20.

                                               21
 1         The question in Cheeks was “whether the FLSA is an ‘applicable
 2   federal statute’ within the meaning of Rule 41(a)(1)(A)[(ii)].” Id. at 204.
 3   Rule 41(a)(1)(A)(ii) governs voluntary, stipulated dismissals of
 4   actions in federal court. It states that, “[s]ubject to . . . any applicable
 5   federal statute,” “[a] plaintiff may dismiss an action without a court
 6   order by filing . . . a stipulation of dismissal signed by all parties.”
 7   Fed. R. Civ. Pro. 41(a)(1)(A) & (A)(ii).

 8         Our Court in Cheeks stated that “in light of the unique policy
 9   considerations underlying the FLSA,” the FLSA falls “within Rule
10   41’s ‘applicable federal statute’ exception.” 796 F.3d at 206. We
11   therefore held that “Rule 41(a)(1)(A)(ii) stipulated dismissals settling
12   FLSA claims with prejudice require the approval of the district court
13   or the [Department of Labor] to take effect.” Id.

14         The majority, correctly, notes that the Cheeks Court did not deal
15   with Rule 68. But the Cheeks Court could not have prohibited the
16   unsupervised Rule 41 stipulated dismissals without first answering
17   in the negative the question of whether the FLSA—the “applicable
18   federal statute”—generally allows private settlement agreements.
19   And because that question is precisely the question that we are facing
20   here, Cheeks inevitably decided the key issue presented in the instant
21   case, and did so in the opposite way from the majority.

22         The majority’s decision today holds that, while the FLSA does
23   not allow purely private settlement agreements in the context of Rule
24   41(a)(1)(A)(ii) stipulated dismissals with prejudice, the FLSA does
25   allow purely private settlement agreements in the context of Rule

                                         22
 1   68(a) judgments. I fail to see any support for that distinction in the
 2   text of the FLSA or anywhere else.

 3            The majority seeks to locate the distinction within the Federal
 4   Rules. See Maj. Op. 22‐23. But that attempt is unconvincing. The
 5   majority notes that Rule 41 contains language stating that plaintiffs
 6   may voluntarily dismiss their cases subject to “any applicable federal
 7   statute,” while Rule 68 does not. But as the majority reluctantly
 8   recognizes, Rule 68 has, again and again, been interpreted to be
 9   subject to an analogous exception. See, e.g., Gordon v. Gouline, 81 F.3d
10   235, 239‐40 (D.C. Cir. 1996) (collecting cases); see also Maj. Op. 9‐10.
11   Moreover, if Rule 68 conflicts with the FLSA, then the FLSA—a
12   statute—trumps Rule 68—a federal procedural rule—regardless of
13   whether Rule 68 gives the statute the permission to do so. See Marek
14   v. Chesny, 473 U.S. 1, 7‐11 (1985) (citing Califano v. Yamasaki, 442 U.S.
15   682, 700 (1979)); see also Am. Pipe & Const. Co. v. Utah, 414 U.S. 538,
16   557‐59 (1974) (the “proper test” for reconciling a federal statute and a
17   Federal Rule is to determine “whether [applying the Rule] in a given
18   context is consonant with the legislative scheme”).

19            Significantly, the majority’s ruling undermines Cheeks in one
20   additional, important way. As the District Court in the instant case
21   pointed out, if unsupervised Rule 68(a) settlement agreements are
22   permitted, there would be no reason for employers to try to do what
23   Cheeks prohibited through Rule 41(a)(1)(A)(ii). Employers would
24   simply use Rule 68(a) as an “end run” to accomplish what Cheeks
25   forbade. Mei Xing Yu v. Hasaki Rest., Inc., 319 F.R.D. 111, 111 (S.D.N.Y.
26   2017).

                                         23
 1   III.      Rule 68 Settlements

 2          How then does the majority reach the conclusion that Rule
 3   68(a) settlements are valid under the FLSA?

 4          The majority points out that Rule 68(a) judgments are publicly
 5   filed on the court docket. Through a leap of logic, it suggests that this
 6   public filing amounts to judicial scrutiny. Maj. Op. 17, 27. And this
 7   public filing, apparently, assuages any concern that the private
 8   settlement agreement violates the FLSA in the manner prohibited by
 9   the Supreme Court in Brooklyn Savings Bank and Gangi. Id. at 18, 23,
10   27. Indeed, according to the majority, public filing alone is enough to
11   distinguish meaningfully “stipulated judgments from private, back‐
12   room compromises.” Id. at 17.

13          But the “public” filing is not and cannot be the kind of judicial
14   or Department of Labor supervision that the Supreme Court and
15   Congress made mandatory in the FLSA context. It does not give the
16   kind of protection that the Court held the FLSA mandates. There is no
17   way to tell, based on a Rule 68(a) filing, whether the settlement
18   awards plaintiffs damages below the statutory requirement. See
19   Marek, 473 U.S. at 6 (Rule 68(a) does not require an “itemize[d list of]
20   the respective amounts being tendered for settlement of the
21   underlying substantive claim”). In other words, the filing of Rule

                                        24
 1   68(a) settlements on the court docket in no way prevents settlements
 2   that violate the express provisions of the FLSA.11

 3            As a result, the majority’s holding leads to an absurd outcome.
 4   By the terms of Rule 68(a), once an offer of judgment has been made,
 5   accepted, and submitted to the court by the parties, the clerk’s entry
 6   of that judgment is mandatory. See Maj. Op. 7‐8. And courts are
 7   required to enter final judgments on all private Rule 68(a) settlements
 8   of FLSA claims. This means that, if the parties in Brooklyn Savings Bank
 9   or Gangi were to come before a district court today, and request that
10   the court enter judgment on their claims under Rule 68(a), the court
11   would have to do so. It would have to do so even though that
12   settlement is illegal under the FLSA. Nothing in the majority’s
13   opinion saves its holding from that absurd result.12

14            The majority’s attempt to avoid that absurd result—through an
15   appeal to the common law of contracts and to Rule 60(b) as ways of
16   avoiding illegal settlements—highlights the untenability of the
17   majority’s position. Maj. Op. 29. Placing the onus on a post‐judgment

     11   Nor can one discern whether the settlement resolves a bona fide dispute, a
          requirement in the single circuit that has adopted the bona fide dispute
          exception. See Bodle, 788 F.3d at 161, 165.
     12   Indeed, the requirement that Rule 68(a) settlements be filed on the court docket
          makes matters worse. It renders the majority’s attempted distinction between a
          party’s capacity to enter into an agreement and that agreement’s enforceability
          meaningless. See Maj. Op. 10 n.31. We are here talking about unsupervised but
          court‐ordered Rule 68(a) settlement agreements. These are court judgments
          and, hence, are enforceable as such.

                                               25
 1   motion to cure the judgment’s own illegality upends the basic
 2   premise of how our judicial system functions. Because the entry of a
 3   judgment carries significant legal consequences, there is a strong
 4   presumption in favor of “the finality of judgments.” Gonzalez v.
 5   Crosby, 545 U.S. 524, 535 (2005) (quoting Liljeberg v. Health Servs.
 6   Acquisition Corp., 486 U.S. 847, 873 (1988) (Rehnquist, C.J., dissenting).
 7   That   presumption      reflects   the   foundational     idea   that   if
 8   “conclusiveness did not attend the judgments of [judicial] tribunals,”
 9   parties would not “invoke[]” the “aid of [such] tribunals” for “the
10   vindication of rights of person and property.” Southern Pac. R. Co. v.
11   United States, 168 U.S. 1, 49 (1897). Precisely because of this
12   presumption, parties seeking relief from judgment under Rule 60(b)
13   must generally show “extraordinary circumstances.” Gonzalez, 545
14 U.S. at 535 (quotation marks and citations omitted). Had the drafters
15   of Rule 68(a) intended to reverse this presumption and allow the kind
16   of time‐consuming challenges the majority suggests could avoid
17   illegal settlements, one would expect that they would have said so
18   explicitly. After all, as the majority notes, Congress does not “hide
19   elephants in mouseholes.” Whitman v. Am. Trucking Ass’n, 531 U.S.
20   457, 468 (2001); see also Maj. Op. 24.

21          In the end, my learned colleagues tip their hand: the majority’s
22   opinion is guided by broad policy notions concerning the desirability
23   of Rule 68 settlements in FLSA cases and the delays that prohibiting
24   such unsupervised settlements might bring. See Maj. Op. 30‐31.
25   Irrespective of the merits of their argument concerning delay, which

                                         26
 1   I find doubtful,13 the majority is engaging precisely in the kind of
 2   broad policy considerations that it correctly and so adamantly rejects
 3   as irrelevant for statutory interpretation. The Supreme Court has told
 4   us that the FLSA requires supervision of settlements. And the fact that
 5   the majority happens to believe, whether correctly or not, that judicial
 6   supervision is undesirable cannot change what Congress’s statute, as
 7   interpreted by the Supreme Court, requires.14

 8            In sum, there is nothing within Rule 68(a) that limits private
 9   parties from making precisely the kind of general private settlements
10   that the High Court, all the circuit courts that have addressed the
11   issue, and the Department of Labor have said the FLSA prohibits. The
12   Rule necessarily conflicts with the federal statute.

13                                     CONCLUSION

14            At the end of the day, everyone who has addressed the issue—
15   from the Supreme Court to the circuit courts to the Department of
16   Labor—agrees that FLSA wage/hour claims cannot be settled by

     13   Consider, for example, the delays that would occur as a result of the Rule 60(b)
          challenges that the majority invokes to save its result from absurdity.
     14   The majority’s related argument that affirming the district court here would
          likely require “judicial approval of a variety of settlements that involve
          vulnerable citizens, such as discrimination suits under Title VII of the Civil
          Rights Act and § 1983 claims of serious violations of police misconduct,” has no
          merit. Maj. Op. 30. As the Department of Labor made abundantly clear, the
          FLSA, as read by the Supreme Court, is a “uniquely protective” statute, which—
          unlike any number of other statutes, including Title VII and § 1983—requires
          supervision of settlement agreements. See Brief of Sec’y of Labor as Amicus
          Curiae In Support of the District Court’s Decision at 6.

                                               27
 1   private agreement without court, Department of Labor, or similar
 2   supervision. And no court’s precedent—including our own—
 3   supports the rule adopted by the majority here: that all FLSA
 4   wage/hour claims, no matter their content, can be resolved—indeed,
 5   can result in a final, binding judgment carrying a federal court’s
 6   imprimatur—as a result of a private settlement agreement reviewed
 7   only by the employer and employee.

 8         That conclusion has no basis in the text, history, design, or
 9   purpose of the FLSA, nor indeed in common sense. I do not believe
10   the majority’s holding can—or will—withstand Supreme Court
11   scrutiny. I respectfully, but emphatically, dissent.

                                        28