On December 12, Proskauer partners Allan Bloom, Elise Bloom, and Harris Mufson delivered a webinar focused on how recent developments in the law impact the ground rules and key strategies for settlement in four distinct areas of employment litigation.

Wage and Hour. Mr. Bloom explained that, in most jurisdictions, settlements of Fair Labor Standards Act (FLSA) claims require U.S. Department of Labor (DOL) supervision or judicial approval. In the Second Circuit, the 2015 decision in Cheeks v. Freeport Pancake House changed the landscape for resolving FLSA claims that are already in federal court litigation, by requiring judicial approval even in the context of a stipulated dismissal under Federal Rule of Civil Procedure (FRCP) 41(a). In light of Cheeks, FLSA settlement agreements entered into in the context of pending litigation are more likely to become matters of public record.

Class and Collective Actions. Ms. Bloom explained that courts are obligated to scrutinize settlements for fairness and satisfaction of the prerequisites under FRCP. And with the recent Rule 23 amendments, parties who come forward with a settlement must be prepared to demonstrate the agreement will be approved after the notice period. Ms. Bloom outlined four key factors for this preliminary determination: adequacy of representation, fair negotiation, adequacy of relief, and equitable treatment of class members. Because many of the records satisfying these factors will be in the defendant’s possession, Ms. Bloom underscored the importance for employers to come to court prepared to address these issues, even though the burden is on the plaintiff to file for approval of the settlement.

Sexual Harassment. Ms. Bloom emphasized four key issues in the wake of the #MeToo Movement: confidentiality, non-disparagement, claim allocation, and tax consequences. For example, a number of states, including New York and California, have limited the enforceability of confidentiality provisions in agreements settling sexual harassment claims. Turning to the recent tax reform, Ms. Bloom explained that tax deductions are no longer allowed for settlement payments (or the related attorney’s fees) on sexual harassment claims if the settlement is confidential.

Whistleblower. Mr. Mufson noted that after a whistleblower complaint is filed with the Occupational Safety and Health Administration (OSHA), an investigation will occur, and if the claims settle during this investigatory period, any agreement must be approved. Mr. Mufson specifically drew attention to OSHA’s general disapproval of gag provisions, and the need for employers to scrutinize confidentiality provisions as a result. Turning to the Securities and Exchange Commission’s (SEC) anti-chilling regulation, Mr. Mufson explained that agreements may not prohibit employee cooperation with governmental agencies. Although Mr. Mufson observed that the recent administration change has led to a sharp decrease in SEC enforcement actions, covered employers should make clear that agreements do not prohibit government cooperation and that notice is not required before doing so. Finally, Mr. Mufson explained key settlement strategies for resolving whistleblower claims, including obtaining important representations from the whistleblower.

We are happy to answer any questions you have related to these topics. For additional information, please contact the speakers directly or a member of the Labor & Employment Department.

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Photo of Allan Bloom Allan Bloom

Allan S. Bloom is a nationally recognized trial lawyer and advisor who represents management in a broad range of employment and labor law matters. As a litigator, Allan has successfully defended a number of the world’s leading companies against claims for unpaid wages…

Allan S. Bloom is a nationally recognized trial lawyer and advisor who represents management in a broad range of employment and labor law matters. As a litigator, Allan has successfully defended a number of the world’s leading companies against claims for unpaid wages, employment discrimination, breach of contract and wrongful discharge, both at the trial and appellate court levels as well as in arbitration. He has secured complete defense verdicts for clients in front of juries, as well as injunctions to protect clients’ confidential information and assets.

As the leader of Proskauer’s Wage and Hour Practice Group, Allan has been a strategic partner to a number of Fortune 500 companies to help them avoid, minimize and manage exposure to wage and hour-related risk. Allan’s views on wage and hour issues have been featured in The New York TimesReutersBloomberg and Fortune, among other leading publications. His class-action defense work for clients has saved hundreds of millions of dollars in potential damages.

Allan is regularly called on to advise boards of directors and senior leadership on highly sensitive matters such as executive transitions, internal investigations and strategic workforce planning. He also has particular expertise in the financial services industry, where he has litigated and arbitrated cases, including at FINRA and its predecessors, for more than 20 years.
A prolific author and speaker, Allan was the Editor of the New York State Bar Association’s Labor and Employment Law Journal from 2012 to 2017. He has served as an author, editor and contributor to a number of leading treatises in the field of employment law, including ADR in Employment Law (ABA/Bloomberg BNA, Senior Editor), Employment Discrimination Law (ABA/Bloomberg BNA, Final Proof Editor), Cutting Edge Advances in Resolving Workplace Disputes (Cornell University/CPR, Editor), The Employment Law Review (Law Business Research, U.S. Chapter Author), and The Complete Compliance and Ethics Manual (SCCE, Chapter Author).

Allan is a member of the NYSBA’s House of Delegates, sits on the Executive Committee of the NYSBA’s Labor and Employment Law Section, and is a Fellow of the College of Labor and Employment Lawyers. He has been recognized as a leading practitioner by Chambers since 2011.

Photo of Elise M. Bloom Elise M. Bloom

Elise M. Bloom is widely hailed as one of the nation’s top employment lawyers and one of the most creative and effective discrimination wage and hour, class/collective action trial lawyers. She is particularly well-known for handling high profile, bet-the-company matters on behalf of…

Elise M. Bloom is widely hailed as one of the nation’s top employment lawyers and one of the most creative and effective discrimination wage and hour, class/collective action trial lawyers. She is particularly well-known for handling high profile, bet-the-company matters on behalf of significant national employers.

Elise is the former co-chair of Proskauer’s Labor & Employment Department, co-head of the Class & Collective Actions Group and previously served as a member of Proskauer’s elected Executive Committee for two terms.

With 30+ years in practice, Elise possesses extensive pre-trial and jury trial experience as well as conducting high-profile investigations. She has represented more companies in class actions challenging interns, trainees and volunteers than most others; this includes her precedent-setting win for Fox Searchlight Pictures in the “Black Swan” case. She also addresses a wider range of general employment issues through counseling and employer training programs.

A noted author and speaker on employment-related topics, Elise spearheads Proskauer’s annual Value Insights: Delivering Value in Labor and Employment Law survey. Elise has been recognized as one of the leading employment lawyers by several leading publications such as Chambers USA, Legal 500, New York Law Journal and Employment Law360, to name a few. She was recently recognized as “Labor & Employment Management Attorney of the Year” at Benchmark Litigation’s 2020 US Awards EAST. She has also been named “Best in Labor & Employment” at Euromoney’s Women in Business Law Awards Americas in 2018, 2017, 2016 and 2014. A client recently told Chambers USA, “She’s incredible. She has an intensity about her work and she knows how corporations work. To watch her in litigation is magic.”