Labor & Employment Law Daily Wrap Up, WAGE-HOUR—CLASS ACTIONS—4th Cir.: Former employee who settled wage claims lacked standing to appeal decertification order, (Jun 3, 2026)

By Jason Albright, J.D.

He and a former coworker alleged that GKN’s rounding and automatic deduction policies resulted in unpaid overtime and other wages, in violation of the FLSA and North Carolina law.

A former employee who voluntarily settled his individual FLSA and North Carolina wage claims in federal district court lacks standing to challenge the decertification of a class and collective action he brought against GKN Driveline North America, Inc., the Fourth Circuit held. His settlement agreement’s general waiver covered his substantive FLSA and state-law claims underlying the collective and the Rule 23 class, and he therefore has no remaining interest in his substantive claims to establish standing to appeal (Mebane v. GKN Driveline North America, Inc., No. 25-2191 (4th Cir. June 2, 2026)).

North Carolina manufacturing facilities. GKN operates three manufacturing facilities in North Carolina. At all three facilities, GKN had a policy of rounding employees’ time entries.

Rounding policies. At first, GKN had a 7/8 rounding policy, under which “seven (7) minutes [would] round down and eight (8) minutes [would] round up” to the nearest quarter hour. If an employee’s shift was scheduled to start at 6:00 a.m., for example, and she clocked in at 6:07 a.m., her time entry would be rounded down to 6:00 a.m. If she clocked in at 6:08 a.m., however, her time entry would be rounded up to 6:15 a.m. Eventually, GKN changed its 7/8 rounding policy to a 3-minute rule, under which GKN would round time entries to the scheduled start of a shift if the employee clocked in within 3 minutes of the shift’s scheduled start time. Similarly, if an employee clocked out within 3 minutes of the shift’s scheduled end time, her time entry would be rounded to the shift’s scheduled end. In January 2020, GKN stopped rounding time altogether.

Automatic deduction of meal breaks. The manufacturer also had a policy of automatically deducting meal breaks from employees’ recorded time. Under that policy, GKN would automatically deduct a 30-minute, unpaid meal break from each employee’s recorded hours. Employees were not required to clock in and out when taking meal breaks, and the policy deducted the 30-minute breaks from the employee’s time whether or not the employee actually took her break or continued working. Nevertheless, “employees [were] expected to be completely relieved of their work duties during breaks.”

Class and collective wage suit. The plaintiff and a coworker, both former GKN employees, sued GKN on behalf of themselves and others similarly situated. They alleged that GKN’s rounding and automatic deduction policies resulted in unpaid overtime and other unpaid wages, in violation of both the FLSA and the North Carolina Wage and Hour Act (NCWHA).

Certification... They moved for class certification under Rule 23 and conditional collective action certification under 29 U.S.C. § 216(b), and the district court largely granted their motion. It conditionally certified an FLSA collective action based on GKN’s rounding policy, and it certified a Rule 23(b)(3) class to pursue an NCWHA claim based on GKN’s rounding policy. Finally, the district court certified another Rule 23(b)(3) class to pursue an NCWHA claim based on GKN’s automatic deduction policy.

…and decertification. Eventually, GKN moved to decertify the classes and the collective action, and the district court granted GKN’s motion. It found that an FLSA collective action based on GKN’s rounding policy would be unsustainable given the individualized inquiries that would be necessary to determine whether employees’ rounded minutes were compensable and how many minutes were unlawfully deducted from each employee’s time. It also observed that, based on data from GKN’s expert, it was “unclear” “whether all employees were even impacted by the rounding policy in a negative manner.” The court therefore decertified the FLSA collective action, and it decertified the Rule 23(b)(3) class based on GKN’s rounding policy for the same reasons. The district court found that a class action would be inappropriate as to the Rule 23(b)(3) class based on the automatic deduction policy given evidence that not all employees regularly worked during the automatically deducted 30-minute meal breaks. The district court also found that individualized inquiries would be necessary to determine whether GKN supervisors actually or constructively knew that employees were working during the automatically deducted period.

Settlement of individual claims. After the classes and collective action were decertified, the case proceeded on the employees’ individual FLSA and NCWHA claims. Then, in November 2024, they settled those claims. The parties agreed that GKN would pay the employees a sum of money “which represent[ed] adequate consideration in full and final settlement of the claims released herein, but excluding Plaintiffs’ counsel’s fees and expenses which Plaintiffs’ counsel [would] petition [for] separately” at a later date.

Release. The settlement agreement’s release provision in paragraph 7 stated, “By signing this Agreement, Plaintiffs are generally waiving all remaining claims, whether or not raised in the litigation, with the exception of Plaintiffs’ right to petition for attorneys’ fees and costs, in addition to, appealing the Court’s May 12, 2023 decertification order, including via substitute [sic] of named plaintiffs, to proceed accordingly with appeal.”

Additional provisions. Paragraph 8 of the settlement agreement advised that the plaintiffs’ counsel would petition for attorney fees and costs “no later than December 17, 2024.” Paragraph 9 made clear that “[t]he Parties specifically understand and agree that Plaintiffs preserve the right to appeal this Court’s May 12, 2023 decertification order.” And paragraph 5 provided that “Plaintiffs retain the right to request a monetary service award in connection with” certain related cases.

Petition for fees and costs. The plaintiffs petitioned for attorney fees and costs by the deadline provided in the settlement agreement, and GKN opposed the petition. Once the petition was fully briefed, the district court accepted the parties’ settlement agreement in a consent judgment and dismissed all remaining substantive claims with prejudice. The court then denied the petition for fees and costs without prejudice. The plaintiffs did not refile their petition for fees and costs.

Appeal. The former employee then appealed the district court’s decertification order to the Fourth Circuit.

No standing. The appeals court found that he lacks standing to appeal the district court’s decertification order. In the settlement agreement, he “generally waive[d] all remaining claims” in this suit. And as he conceded, that general waiver covered his substantive FLSA and NCWHA claims, the claims underlying the collective and the Rule 23 class. He therefore has no remaining interest in his “substantive claim[s]” to establish standing to pursue the appeal, the Fourth Circuit concluded.

Nor could he rely on any interest in shifting the costs of litigation to the remainder of the class or his contractual reservation of the right to appeal the decertification order, to seek attorneys’ fees and costs, and to seek a service award in related cases. Rhodes v. E.I. du Pont de Nemours & Co., 636 F.3d 88, 100 (4th Cir. 2011), the appeals court observed, categorically held that when a putative class plaintiff “has voluntarily settled or dismissed” his individual substantive claims, he no longer possesses “a sufficiently concrete interest in the certification question to satisfy the case-or-controversy requirement of Article III.” Because he voluntarily dismissed his individual claims underlying the request for class certification, he had no standing to appeal the district court’s decertification order.

The former employee’s appeal was accordingly dismissed for lack of jurisdiction.

The case is No. 25-2191.

Judge: Rushing, A.

Attorneys: Laura Fisher (Law Offices of Gilda A. Hernandez) for James Mebane. Paul DeCamp (Epstein, Becker & Green) for GKN Driveline North America, Inc.

Companies: GKN Driveline North America, Inc.

Cases: WageHour ClassActions Overtime Procedure MarylandNews NorthCarolinaNews SouthCarolinaNews VirginiaNews WestVirginiaNews