FLSA or "Wage and hour" (minimum wage, overtime, etc.) practitioners in the Federal Courts in Vermont, Connecticut and New York (Second Circuit Court of Appeals) have had to submit wage and hour settlements to a Judge for approval under the Cheeks doctrine was established in 2017. This mechanism was created to try to ensure that workers/employees received fair settlements. However, it has often led to lengthy delays in getting relatively low wage workers - people who could really use the money - paid in a timely fashion. It can sometimes increase the cost of litigation for employers as well.
In Fisher v. SD Protection Inc., the Federal Appellate Court in New York has now significantly altered how a wage and hour settlement is approved. The Court held that when approving or disapproving such agreements, the district courts (lower courts) can no longer rewrite or “blue pencil” such agreements, though they can still “advise" on which terms it would like to see in the agreement. Further, attorneys fees are no longer considered to be “pegged” to 1/3 of the Employee’s recovery and may exceed that amount because Employee counsel’s efforts on a small wage and hour case often exceed the value of the claim.