Chindarah v. Pick Up Stix, Inc

In Chindarah v. Pick Up Stix, Inc. (2009) 171 Cal.App.4th 796, 799, (the plaintiffs argued a settlement agreement they had executed with the defendant releasing their claims for unpaid overtime, penalties and interest, and other Labor Code violations, was unenforceable. The plaintiffs in Chindarah contended the release was void as a matter of law "to the extent it released claims for any wages actually due and unpaid." They claimed "'wages actually due and unpaid' means wages that are disputed, if they are ultimately found to be owing. In other words, the Plaintiffs claim any settlement of a dispute over overtime compensation runs afoul of sections 206.5 and 1194." (Id. at p. 799.) The Chindarah court concluded: "There is no statute providing that an employee cannot release his claim to past overtime wages as part of a settlement of a bona fide dispute over those wages." (Chindarah, supra, at p. 803.) Because the releases at issue settled a dispute over whether the defendant had violated wage and hour laws in the past, and did not condition the payment of wages concededly due on the execution of the releases, the agreements were enforceable. The plaintiffs' claims were barred. (Ibid.) The Chindarah court further noted that federal courts applying California law have upheld releases of disputed wage claims, relying on Reid and Sullivan. (Id. at pp. 801-802.) And the court rejected the argument that any prohibition against private settlement of claims under the federal Fair Labor Standards Act should be read into California law. (Id. at p. 802.) Further, in Chindarah, the court specifically rejected the claim that agreements to release wage claims violate California public policy. The court recognized the statutory right to receive overtime pay as embodied in section 1194 is not waivable. (Chindarah, supra, at p. 803.)