Ambre Bodle v. TXL Mortgage Corporation, et
788 F.3d 159
5th Cir.2015Background
- Plaintiffs Ambre Bodle and Leslie Meech sued TXL Mortgage and its president under the FLSA alleging unpaid overtime; district court denied collective certification.
- Defendants previously sued plaintiffs in state court for violating noncompete and obtained a joint agreed final judgment after a private settlement containing a very broad release of "any and all" claims arising from plaintiffs’ employment.
- Defendants moved for summary judgment in the FLSA action asserting the state-court release barred the FLSA claims; district court granted summary judgment on that basis and did not address res judicata.
- Plaintiffs appealed, arguing the FLSA claims could not be waived because the prior settlement did not involve FLSA or overtime issues and contained no factual development of unpaid overtime.
- Fifth Circuit considered whether Martin v. Spring Break’s exception permitting enforcement of private FLSA compromises in bona fide disputes over hours/compensation applies where the prior settlement arose from non-FLSA state litigation and never addressed overtime.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a generic broad state-court release bars later FLSA overtime claims | Release is invalid as to FLSA because prior settlement did not involve FLSA or factual dispute over overtime | Release is enforceable; prior settlement resolved a bona fide wage/compensation dispute broadly enough to include overtime | Release does not bar FLSA claims; Martin exception inapplicable where overtime was not actually disputed or negotiated |
| Whether Martin v. Spring Break extends to settlements from non-FLSA litigation | Martin limited to settlements that directly resolve bona fide FLSA disputes about hours/compensation; thus it should not apply | Martin applies where settlement generally compromised wage issues—even if not in FLSA suit | Court declines to extend Martin; exception limited to settlements that developed and compensated disputed FLSA hours/amounts |
| Whether unsupervised private settlements of FLSA claims are permissible generally | Plaintiffs: unsupervised waivers of FLSA wages are barred except where bona fide dispute over hours/compensation exists and was resolved | Defendants: unsupervised broad releases can bar later FLSA claims if they arose from earlier wage/compensation negotiations | Court reiterates general prohibition on unsupervised FLSA waivers; permits narrow Martin exception only where overtime was actually at issue and compensated |
| Whether res judicata bars the FLSA suit given the prior agreed judgment | Prior noncompete suit concerned different subject matter; FLSA claims arise from distinct facts and were not adjudicated | Prior judgment precludes relitigation because it was an agreed judgment arising from same employment relationship | Res judicata does not bar the FLSA action because the two suits do not arise from the same subject matter |
Key Cases Cited
- Martin v. Spring Break ’83 Prods., L.L.C., 688 F.3d 247 (5th Cir. 2012) (approved enforcing private settlement that resolved bona fide FLSA dispute over hours)
- Brooklyn Sav. Bank v. O’Neil, 324 U.S. 697 (U.S. 1945) (FLSA forbids waiver of statutory wage claims and liquidated damages)
- D.A. Schulte, Inc. v. Gangi, 328 U.S. 108 (U.S. 1946) (bona fide disputes over coverage may not permit waiver of liquidated damages; left open disputes over hours/rate)
- Lynn’s Food Stores, Inc. v. United States, 679 F.2d 1350 (11th Cir. 1982) (unsupervised private compromises of FLSA back-wage claims are generally prohibited absent court or DOL supervision)
- Martinez v. Bohls Bearing Equip. Co., 361 F. Supp. 2d 608 (W.D. Tex. 2005) (private compromise enforceable where plaintiff’s complaint directly raised unpaid overtime and a bona fide dispute over hours existed)
- Barr v. Resolution Trust Corp., 837 S.W.2d 627 (Tex. 1992) (Texas applies transactional approach to res judicata; subsequent suit barred if it arises from same subject matter of prior suit)