In a dispute over whether the Fair Labor Standards Act precludes the settlement of non-FLSA claims, the Eleventh Circuit held that, when a settlement agreement settles both FLSA and non-FLSA claims, the FLSA does not limit enforcement of the portions resolving non-FLSA claims. O’Neal v. American Shaman Franchise System, 166 F.4th 1274 (11th Cir. 2026).
Thomas O’Neal, a franchisee of the American Shaman CBD franchise system, sued American Shaman in Florida federal court, alleging breach of contract, unjust enrichment, violation of Florida statutes, and several FLSA violations. A month later, O’Neal and American Shaman entered into a settlement agreement in which American Shaman paid O’Neal $50,000, the parties exchanged mutual releases, and they agreed to confidentiality. Despite the settlement, O’Neal later sued American Shaman in Missouri and filed a supplemental complaint in the Florida action alleging fraudulent transfer and conversion – with no FLSA claims. American Shaman moved for judgment on the pleadings in the Florida case and counterclaimed for breach of contract. After a Florida federal district court granted American Shaman’s motion and awarded summary judgment on its breach of contract claim, O’Neal appealed.
The Eleventh Circuit held that the district court did not err in granting judgment on the pleadings and summary judgment. On appeal, O’Neal argued that, because neither the Department of Labor nor a district court approved the parties’ settlement (as required under the FLSA), the mutual release of both non-FLSA and FLSA claims was unenforceable. The Eleventh Circuit disagreed, reasoning that although the FLSA precludes a settlement of FLSA claims absent DOL or court approval, O’Neal did not raise any FLSA claims in his supplemental complaint, and the release of the non-FLSA claims was enforceable under Florida contract law. O’Neal also argued that the district court erred by denying him the opportunity to amend his supplemental complaint after a magistrate judge denied his amendment request. But, the Eleventh Circuit again disagreed, holding that O’Neal failed to properly object to the magistrate judge’s ruling.
The Eleventh Circuit also affirmed summary judgment on American Shaman’s breach claim. American Shaman argued that O’Neal’s suit in Missouri breached the mutual release provision contained in the settlement agreement. On appeal, O’Neal argued that American Shaman’s submission to the Missouri court of a heavily redacted settlement agreement constituted a breach of American Shaman’s confidentiality obligations under the settlement agreement, and relieved O’Neal of any obligations he had under that agreement. The Eleventh Circuit held otherwise, reasoning that the settlement agreement clearly provides an exception to the confidentiality requirement when a party must disclose the agreement to a court to obtain enforcement.