On February 11, 2026, the U.S. Court of Appeals for the Eleventh Circuit reiterated its position that settlement agreement provisions releasing claims under the Fair Labor Standards Act (“FLSA”) must be approved by a court or the Department of Labor (“DOL”). This decision reinforces a continuing jurisdictional divide across the country regarding the requirements for a valid release of FLSA claims.
In O’Neal v. American Shaman Franchise Systems, Inc., the parties entered into a private settlement agreement under which the plaintiff purported to release both FLSA and non-FLSA claims. The parties did not seek any approval of the settlement from a court or the DOL. Shortly thereafter, the plaintiff filed a new lawsuit based on allegations of fraud, arguing that the parties’ failure to obtain court or DOL approval for the prior settlement rendered the agreement unenforceable as a whole. The district court dismissed plaintiff’s complaint, and the Eleventh Circuit panel affirmed.
The Eleventh Circuit held that the parties’ failure to obtain approval of the settlement rendered it unenforceable only as to the FLSA claims. Releases of non-FLSA claims, the court reasoned, are not subject to the pre-approval requirement; their enforceability is based upon state contract law principles. Accordingly, because the settlement agreement was enforceable as to non-FLSA claims, including the fraud claim, the court found that plaintiff’s complaint (which arose solely out of plaintiff’s fraud-based claims) was properly dismissed, even if the agreement did not result in a valid release of FLSA claims.
The Eleventh Circuit’s holding limits the impact of the approval requirement for FLSA settlements on non-FLSA claims, but it deepens the jurisdictional divide as to whether court or DOL approval is necessary or even permissible. Indeed, as we previously reported here, courts around the country have continued to reach inconsistent conclusions about whether court approval is required for FLSA settlements. Given this continuing divide, employers must be cognizant of the requirements of the applicable jurisdiction when entering into agreements purporting to release FLSA claims. We will continue to track developments on this important area of wage and hour law.
