03-04-2026
A federal court in Washington held that potential Fair Labor Standards Act claims may be waived by an employee in a separation agreement.
Eurfonio Lomibao worked as an hourly employee at AGC Biologics, Inc. He sued AGC for failing to pay him and other hourly employees for time worked over 40 hours per week, a violation of the FLSA and Washington state law. AGC moved for summary judgment based on the severance agreement Lomibao had signed that included language releasing all his claims. The agreement stated that Lomibao had been “fully paid for all hours worked.” It included an acknowledgment that he read and understood the terms, had been advised to consult an attorney, and signed voluntarily. Lomibao argued that FLSA rights are not waivable by contract.
The federal court rejected Lomibao’s argument. There have been federal court decisions nationwide with language suggesting that FLSA rights are nonwaivable. But the court stated these cases involved collective bargaining agreements or took place in vastly different circumstances than the matter before it. None of the previous cases categorically held that FLSA rights are nonwaivable, nor does the statute’s language expressly prohibit waiver. Absent any binding authority, the Washington federal court decided not to “recognize a categorical ban on waiver of FLSA rights via contract, especially when prudential concerns and other public policies counsel against such a prohibition.” The court also held that Department of Labor supervision and court approval of these waivers were not required, siding with the Fifth Circuit’s precedent on this issue.
Takeaways: The federal circuit courts are split on whether FLSA rights can be waived through voluntary releases. Employers should consult with attorneys when crafting separation agreements that include a waiver of possible FLSA rights to take the necessary steps to protect themselves.