FLSA settlement can include nondisparagement clause

Fair Labor Standards Act settlements often make the news, bringing unwanted publicity to employers. Employers can, however, prevent an employee who receives a settlement from badmouthing them by including a nondisparagement clause in the settlement agreement.

Recent case: Kimmy sued for unpaid overtime. She also claimed her boss had hit her. She settled the case for a lump sum payment for the unpaid overtime plus $24,000 for the physical assault. The parties agreed not to criticize each other after settling.

Before the judge would approve the language, she reviewed the so-called nondisparagement clause to make sure it was appropriate and didn’t unnecessarily hamper honest discussion of the case. She concluded it was valid because it specifically allowed Kimmy to discuss “honest” facts about the case. The judge approved the settlement. (Panganiban v. Medex, et al., No. 15-CIV-2588, ED NY, 2016)