The underlying dispute involves Stefan Touani and Nick Mazza, former employees of Limble Solutions, Inc., a Utah company. They allege Limble violated the Fair Labor Standards Act by misclassifying certain employees as exempt from overtime compensation and by failing to pay non-exempt employees the overtime they were owed. Limble denied the allegations. The parties subsequently executed a settlement agreement and sought court approval in the District of Utah.
Under the proposed deal, Limble would pay $255,000 into a settlement fund covering 57 putative collective members who worked in specified positions during the relevant period. Each would receive a check; cashing or depositing it within 120 days would constitute opting in and would release the individual's FLSA claims. The parties would then file a list of those who negotiated their checks.
District Judge David Barlow had already denied an earlier version of the settlement on January 30, 2026, flagging that the opt-in process raised procedural concerns under 29 U.S.C. § 216(b) because the court was being asked to approve the settlement before any putative collective members received notice or opted in. He gave the parties two options: revise the notice procedure so members could opt in before final approval, or submit authoritative caselaw showing the statute permits simultaneous resolution of the named plaintiffs' claims and a binding settlement on behalf of workers who had not yet joined the case.
The parties chose the second path. They argued that the settlement would not bind anyone who did not affirmatively opt in, that mootness concerns improperly conflated Rule 23 class actions with FLSA collective actions, and that nothing in the statute dictates the timing of when an individual must become a party plaintiff. They also contended the proposed method would produce greater participation, increased efficiency, and lower costs.
Judge Barlow rejected those arguments. The court acknowledged that the settlement would not bind anyone against their will, but held that was not the core problem. Once the court grants final approval, the matter is resolved — and any attempt by putative collective members to join afterward would be moot because the case no longer exists. The court noted that the settlement agreement itself defines the effective date as the date the final approval order is entered and states that as of that date the matter is resolved, meaning collective members would be releasing claims as part of a settlement in a collective action that had not yet formed.
The court pointed to a line of Tenth Circuit district court decisions — including cases from the District of Kansas, the District of Colorado, and the District of Utah — that have declined to approve one-step settlement proposals on the same grounds. The parties cited cases in which Tenth Circuit courts approved one-step settlements, but Judge Barlow noted they produced no case in which a court in this circuit addressed the mootness question and still approved such a proposal. The order was entered without prejudice, and the court noted that nothing prevents the parties from revising the notice procedure so that prospective collective members opt in and file their consent before releasing their claims.