In the case of Zako v. Hamilton Company, James Zako filed a collective action lawsuit against Hamilton Company under the Fair Labor Standards Act (FLSA) for denying overtime pay. Zako worked as a field service specialist for Hamilton Company, providing installation, maintenance, and repair services for laboratory products. Zako claimed that he regularly worked more than 40 hours a week without receiving overtime pay.
Zako resigned from his job and entered a severance agreement with Hamilton Company on that same day, the agreement included a waiver of claims, which released Hamilton Company from liability for all claims arising out of Zako’s employment. The agreement also prohibited Zako from disclosing confidential information, soliciting customers or employees, and assisting with third-party disputes against Hamilton Company.
Hamilton Company argued that Zako’s claims were barred by the severance agreement and decided to file a motion to dismiss his claims. The court noted that the severance agreement explicitly released Hamilton Company from liability for all claims related to his employment. The agreement also prohibited Zako from partaking in third-party claims against them, such as this collective action lawsuit.
Zako argued that his right to bring a collective action under the FLSA was non-waivable, but the court rejected this argument, stating that contract provisions that waive rights under the FLSA are enforceable. Ultimately, Zako’s claims were dismissed with prejudice.
Key lessons from this case:
- Severance agreements in Nevada can include provisions that release employers from liability for claims related to employment, including overtime violations.
- It is important for an employee to carefully review and understand the terms of an agreement before signing them to avoid misunderstanding their rights.
- While substantive rights under the FLSA cannot be waived through a contract, procedural rights can be waived. This means that employees can potentially waive their right to file a collective action lawsuit by signing a severance agreement.
If you want to know more about overtime regulations, read our guide on Nevada Overtime Laws.
