I recently came across an interesting Report and Recommendation from the Middle District involving a very creative proposed FLSA settlement. The District Judge later adopted the R & R.
As often (always?) happens in FLSA cases, in this case there were great discrepancies between the plaintiff's and defendant's versions of the number of hours worked by the plaintiff. Usually when the parties want to settle such a case, they agree on a fair number somewhere in the middle and are done with it.
Here, however, the parties struck a much more creative bargain. The plaintiff agreed to sit for a lie detector test, and be asked "whether he worked five, ten, and finally, fifteen hours per week, on average, of overtime". If the plaintiff "passed" the test, the defendant would pay the overtime amount, plus a fee amount to be determined by the court. If the results were inconclusive, the defendant would pay $10,000 total. If the plaintiff failed the test, the plaintiff would get nothing, and would have to pay 1/2 of the cost of the test.
The parties asked the court to approve this scheme before they went forward with the lie detector test. The court denied the motion without prejudice, under the thinking that "the parties are not asking the court to approve a settlement - they are asking the court to approve a method of reaching a settlement". The court acknowledged that the parties' plan would be "quicker and cheaper than a jury", but said that would also be true of "dueling and coin flips". In other words, it doesn't matter how you reach the settlement - it can be totally arbitrary - but the court will not analyze the settlement unless the terms are concrete.
The case is still pending so it is possible that the parties might go forward with the test. One thought that I had was this - I used to be a public defender in Ohio. In some cases, the prosecutor's office would suggest having the criminal defendant undergo a lie detector test. Sometimes we would agree, but only after we had our own lie detector operator administer a test, under the cover of privilege, and the defendant passed with flying colors. I wonder if the plaintiff's attorney did the same thing here before agreeing to this settlement?
This article is for general information and does not include full legal analysis of the matters presented. It should not be construed or relied upon as legal advice or legal opinion on any specific facts or circumstances. The description of the results of any specific case or transaction contained herein does not mean or suggest that similar results can or could be obtained in any other matter. Each legal matter should be considered to be unique and subject to varying results. The invitation to contact the authors or attorneys in our firm is not a solicitation to provide professional services and should not be construed as a statement as to any availability to perform legal services in any jurisdiction in which such attorney is not permitted to practice.
Duane Morris LLP, a full-service law firm with more than 700 attorneys in 24 offices in the United States and internationally, offers innovative solutions to the legal and business challenges presented by today's evolving global markets. Duane Morris LLP, a full-service law firm with more than 700 attorneys in 24 offices in the United States and internationally, offers innovative solutions to the legal and business challenges presented by today's evolving global markets. The Duane Morris Institute provides training workshops for HR professionals, in-house counsel, benefits administrators and senior managers.