At least in one circuit, you can. That’s historic—a first in 30 years. The story revolves around a group of film employees in Louisiana who claimed they had not been paid for all the time they worked. In the past, the settlement they reached with their employer would have needed approval from either the Department of Labor (DOL) or a federal district judge.

What happened. The unhappy employees were unionized lighting and rigging technicians at work on the 2012 movie Spring Break ‘83. They filed a grievance, but the union and the employer agreed it would be almost impossible to determine whether the workers had worked on the disputed days. So the two sides forged a settlement agreement that awarded the workers payments in exchange for their promise not to file any legal claims for those disputed hours.

Before the union representatives had signed the agreement, however, the workers filed suit in federal district court. After that, though, they signed the pact, received their payments, and cashed their checks. So when their case got to court, the judge granted the employer’s motion to enforce the settlement. Plaintiffs appealed to the 5th Circuit, which covers Louisiana, Mississippi, and Texas.

What the court said. Back in 1982, the 11th Circuit (AL, FL, GA) was the first to rule on whether claims under the Fair Labor Standards Act (FLSA) could be privately settled. In that case, the DOL had audited the employer, Lynn’s Food Stores, and found employees who hadn’t been paid for all their hours worked.

The employer wanted to settle the suit with the workers, who were completely unaware they had been underpaid under the FLSA—if they even knew what the law was. So appellate judges decided that either a district court or the DOL itself must approve any such settlements, not just employer and employees.

Circuit courts have refused to recognize private settlements ever since. As one law firm commented, the bad facts of Lynn’s Food Stores led to bad law. This time, though, the 5th Circuit broke the precedent: Judges ruled that the Spring Break ‘83 settlement could not only be permitted but also sealed so that its details are not available to the public. That’s a good break for employers and a bad break for plaintiffs’ lawyers looking to file copycat suits. Martin et al. v. Spring Break ‘83 Productions, U.S. Court of Appeals for the 5th Circuit, No. 11-30671 (2012).

Point to remember: This ruling covers only disputed hours, not such substantive FLSA issues as whether an exempt employee has been misclassified and should be exempt. Furthermore, it is still not effective in jurisdictions outside the 5th Circuit.