Labor & Employment Law Daily Wrap Up, WAGE-HOUR—OVERTIME—W.D. Wash.: Separation agreement barred employee’s individual and class claims for alleged FLSA violations, (Feb 11, 2026)

By Ronald Miller, J.D.

Without binding authority on the non-waivability of FLSA rights, the court declined to recognize a categorical ban on waiver of FLSA rights via contract.

An employee who signed a separation agreement at the end of his employment that provided certain benefits was barred from bringing individual claims alleging the employer unlawfully failed to compensate employees for overtime wages and provide bona fide meal and rest breaks, a federal district court in Washington ruled. First, the court declined to recognize a categorical ban on the waiver of FLSA rights via contract. Next, it concluded that at the time the agreement was executed, there were disputed issues regarding the employer’s potential liability under the FLSA, which sufficed as a bona fide dispute for FLSA purposes. Further, the court found that DOL supervision or court approval was not required for an FLSA settlement to be valid. Moreover, because the employee’s individual claims did not survive the employer’s summary judgment motion, the court concluded that he lacked standing to assert claims on behalf of other employees (Lomibao v. AGC Biologics, Inc., No. 2:25-cv-00361-JHC (W.D. Wash. Feb. 5, 2026)).

Wage claims. The plaintiff worked as an hourly employee for AGC Biologics. He alleged that during his employment, the employer failed to compensate him and other hourly employees for all hours worked over 40 in a workweek. He also alleged that the employer willfully withheld earned wages and failed to provide bona fide meal and rest periods to him and other hourly employees. He brought this action on behalf of himself and other hourly employees.

Separation agreement. The employer moved for summary judgment. It contended that the employee could not bring this action because, upon termination, he was presented with a Separation Agreement and Release that offered him certain benefits, including a severance payment of $7,140 and job placement services, in exchange for a general release of all claims against the employer.

The employer contended that: (1) the employee was provided with up to 45 days to review the agreement before accepting it; (2) he was advised to consult an attorney before signing the agreement; (3) he and the employer signed the agreement on May 31, 2024—21 days after he was presented with the agreement; (4) he did not revoke his acceptance of the agreement within seven calendar days (as provided under the agreement); and (5) the employer performed all obligations under the agreement, paying the employee $7,140 on June 14, 2024, and also providing him with job placement services.

Waiver of employee rights. The employer argued that it was entitled to summary judgment as the parties had a valid and enforceable contract barring the employee from bringing any employment-related claims against it. For his part, the employee opposed summary judgment on the grounds that the agreement did not bar this action because: (1) the FLSA and Washington Minimum Wage Act (WMWA) prohibit waiver of employees’ rights, thereby invalidating any contract provision that purports to waive an employee’s rights under either statute; and (2) the agreement’s release of his claims was void for public policy.

Individual claims. As an initial matter, the employer asserted that there was no genuine dispute as to any material fact that the employee’s individual claims under the FLSA and state law were barred by the agreement. The court first observed that courts in the Ninth Circuit and the Ninth Circuit itself have not adopted a uniform approach on the issue of waiver of FLSA rights. Thus, the court organized its analysis around these questions: (a) whether FLSA rights can ever be waived by contract; (b) if so, under what circumstances should an agreement waiving FLSA rights be considered valid; and (c) if the court does not invalidate the agreement on FLSA waiver grounds, whether any genuine issues of material fact precluded summary judgment.

Waiver by contract. While the court acknowledged that the employee’s cited authorities contained language suggesting that FLSA rights can never be waived by contract, it noted that many of these same cases either explicitly or implicitly indicate that FLSA rights can be waived by contract, at least in some situations. It also noted that many of the employee’s cited cases involved collective bargaining agreements or other contracts that did not resemble the separation agreement here or concerned issues that were entirely unrelated to whether FLSA rights may ever be waived by contract. Thus, the court concluded that none of the employee’s cited language amounted to binding authority on the non-waivability of FLSA rights.

Without such authority, the court was not inclined to recognize a categorical ban on the waiver of FLSA rights via contract. Thus, the court declined to conclude as a matter of law that an employee can never waive their FLSA rights via contract. Likewise, the court declined the employee’s request to invalidate the separation agreement’s release of his FLSA claims on this basis.

Bona fide dispute. The employee argued that to legitimately release one’s FLSA claims by contract, the agreement must resolve a bona fide dispute and be subject to court approval or DOL supervision. Here, the court concluded that there was a bona fide dispute at the time the agreement was executed. The employee alleged that during his employment, he was forced to work “off the clock” and was not properly compensated for those hours. The complaint also indicated that the employee was aware of this issue before his employment was terminated, and before the agreement was signed. Further, the record indicated that the employer denied such a claim when the agreement was entered into. Thus, at the time the agreement was executed, there were disputed issues regarding the employer’s potential liability under the FLSA. This sufficed as a bona fide dispute for FLSA purposes.

As for the DOL supervision or court approval issue, the court noted that courts in this circuit have reached conflicting outcomes as to whether DOL supervision or court approval is required for an FLSA settlement to be valid. Here, the court was persuaded by the approach that DOL supervision or court approval is not required for a FLSA settlement to be valid. Thus, the agreement was not invalid on bona fide dispute or approval grounds.

Genuine issues of material fact. Finally, the employee argued that even if the court declined to invalidate the agreement, it should still deny summary judgment because “at most there is a genuine dispute of material fact regarding whether the severance agreement waive[d] [Plaintiff’s] rights under state and federal law.”

While the employee cited cases that concluded that summary judgment was inappropriate because there were threshold facts missing, thereby preventing the courts from determining whether a valid and enforceable contract existed between the parties, here, it was undisputed that the employee signed an agreement that explicitly released his right to bring any FLSA claims against the employer. Moreover, the employee pointed to no disputed or missing facts in the record that would suggest the parties did not form such a contract.

Thus, the court concluded that the employer had successfully shown there was no genuine dispute as to any material fact that the employee’s FLSA claim was barred by the agreement and that the employer was entitled to judgment as a matter of law. Accordingly, the court dismissed the employee’s claim for failure to pay overtime under the FLSA.

Waiver under WMWA. Similarly, the court declined to conclude that Washington state law prohibits the waiver of WMWA rights by contract. Nor could the court conclude that the agreement’s release of the employee’s WMWA claims was void for public policy. Although the court acknowledged that, as a pharmaceutical company, the employer was heavily regulated by Washington law and performed important services for the public, it did not find that the agreement concerned the pharmaceutical business. Thus, the court found no strong public policy justification for invalidating the release provision of the agreement.

Class claims. The employer contended that because the employee released all individual claims against it, he lacked standing to pursue any of the putative class and collective action claims asserted in the complaint. Because the employee’s individual claims did not survive the employer’s summary judgment motion, the court concluded that there was no genuine dispute as to any material fact that the employee lacked standing to bring any of the claims asserted in the complaint on behalf of other employees. Thus, the court dismissed the employee’s putative class and collective action claims.

The case is No. 2:25-cv-00361-JHC.

Judge: Chun, J.

Attorneys: Andrew W. Dunlap (Josephson Dunlap) for Eufronio Lomibao. Ian Maher (Ballard Spahr) for AGC Biologics Inc.

Companies: AGC Biologics, Inc.

Cases: WageHour Overtime StateLawClaims ClassActions Procedure WashingtonNews