In the case of Wisneski v. Belmont Management Company, Teresa Wisneski and Mildred Jones filed a lawsuit against their employer, Belmont Management Company (Belmont), for violating the Fair Labor Standards Act (FLSA). Wisneski and Jones worked as hourly employees for Belmont for one of their apartment complexes. They also resided on the premises of one of Belmont’s apartment complexes and received credit toward their rent as part of their compensation package.
Wisneski and Jones claimed that Belmont did not include the value of a rent credit in the calculation of overtime pay, which meant that they were being underpaid.
Both parties submitted a joint motion for a settlement agreement and sought the dismissal of this lawsuit. The proposed settlement agreement covered not only Wineski and Jones’ names but also similarly situated individuals. However, the court denied the joint motion.
The court explained that an FLSA lawsuit only becomes a collective action when other employees opt into the class by giving written consent. The court also raised concerns about the fairness of certain provisions in the proposed settlement. The broad release included in the agreement, which encompassed Belmont, was considered too broad and unfair.
The court also needed more information regarding the basis for the employees’ services. There was also a lack of sufficient information to determine whether the requested fees in the settlement agreement were reasonable. The motion for settlement was denied.
Key lessons from this case:
- The court can only approve an FLSA settlement if it is fair and equitable to all parties concerned, ensuring that the settlement resolves a bona fide dispute.
- The reasonableness of requested incentive awards for named plaintiffs should be based on the time and effort they devoted to the lawsuit, clearly documenting their contributions in the motion for settlement approval.
- Employees who seek settlement approval for overtime cases should provide comprehensive information, such as an appropriate breakdown of the settlement amount.
If you want to know more about overtime regulations, read our guide on Kansas Overtime Laws.
