February 11, 2026|Franchise Frontlines
February 11, 2026 | United States Court of Appeals for the Eleventh Circuit | Published Opinion
Executive Summary
In a published decision, Judge Brasher of the Eleventh Circuit affirmed dismissal of a franchisee’s post-settlement claims and granted summary judgment to the franchisor on its breach of contract counterclaim. The dispute arose after the parties entered into a settlement agreement resolving a prior franchise lawsuit that included both Fair Labor Standards Act (“FLSA”) and non-FLSA claims. The franchisee later attempted to pursue additional claims, arguing that the settlement agreement was unenforceable because it had not been approved by a court or the Department of Labor. The Eleventh Circuit rejected that position, holding that while unapproved settlements cannot waive FLSA claims, they remain enforceable as to non-FLSA claims under ordinary contract principles. The court further held that the franchisor did not breach the agreement’s confidentiality provision when disclosing the agreement in litigation to enforce its terms.
Relevant Background
The case stems from an earlier lawsuit brought by a franchisee against a franchisor operating a CBD retail franchise system. The franchisee asserted multiple claims, including breach of contract, statutory violations, and FLSA claims. The parties ultimately reached a settlement agreement that included a broad mutual release of “any and all” claims in exchange for monetary consideration.
The settlement agreement also contained a confidentiality provision restricting disclosure of its terms, subject to certain exceptions. Notably, the agreement permitted disclosure to a court for purposes of enforcement.
Following execution of the settlement, the franchisee initiated additional proceedings asserting new claims, including fraudulent transfer. The franchisor responded by invoking the settlement agreement’s release and asserting counterclaims for breach of contract, arguing that the franchisee’s new claims were barred.
The franchisee challenged enforcement of the settlement agreement, arguing that because the agreement included FLSA claims and had not been approved by a court or the Department of Labor, it was entirely unenforceable.
Decision
The Eleventh Circuit rejected the franchisee’s argument and affirmed enforcement of the settlement agreement as to non-FLSA claims. The court began by reaffirming longstanding precedent that FLSA claims cannot be waived through private settlement absent approval by a court or the Department of Labor. However, the court drew a critical distinction between FLSA and non-FLSA claims.
Applying standard contract principles, the court held that the unenforceability of the settlement agreement as to FLSA claims did not render the entire agreement void. Instead, the agreement remained enforceable as to non-FLSA claims, including the franchisee’s subsequent fraudulent transfer claims. The court emphasized that the settlement involved independent consideration beyond the FLSA claims and that the release provision did not treat FLSA claims as the sole or essential component of the agreement.
The court also affirmed summary judgment in favor of the franchisor on its breach of contract counterclaim. It held that the franchisee breached the settlement agreement by pursuing claims that fell within the scope of the release.
In addition, the court rejected the franchisee’s argument that the franchisor violated the agreement’s confidentiality provision. Interpreting the agreement as a whole, the court concluded that a specific provision permitting disclosure to a court for purposes of enforcement controlled over more general confidentiality language. As a result, the franchisor’s disclosure of the agreement in related litigation did not constitute a breach.
Finally, the court declined to consider certain arguments based on procedural waiver, finding that the franchisee failed to properly preserve objections at the district court level.
Looking Forward
This decision provides a practical framework for franchisors navigating settlement agreements in complex disputes involving multiple claims. The court’s central holding—that partial unenforceability does not invalidate an entire settlement—has significant implications for how franchise disputes are resolved and documented.
For franchisors, the most important takeaway is that settlement agreements should be structured with clear, independent consideration and broadly drafted release provisions. Where multiple categories of claims are resolved together, courts may treat those claims separately for enforceability purposes, preserving the effectiveness of the agreement even if one category—such as FLSA claims—requires additional procedural safeguards.
The decision also underscores the importance of careful drafting in confidentiality provisions. The court’s reliance on a specific carve-out permitting disclosure for enforcement purposes highlights how targeted language can preserve a party’s ability to defend and enforce its contractual rights without running afoul of broader confidentiality obligations.
From a litigation perspective, the case reinforces that courts will enforce settlement agreements as written, particularly where a party attempts to relitigate claims that were expressly released. At the same time, it serves as a reminder that procedural requirements—whether related to FLSA approval or preservation of arguments—can shape the outcome of post-settlement disputes.
More broadly, O’Neal reflects a consistent judicial approach: while certain statutory protections impose limits on how specific claims may be resolved, those limits do not necessarily extend beyond their intended scope. For franchisors, this provides a measure of predictability in structuring settlements, while reinforcing the need for precision in both drafting and execution.
This article is based solely on the opinion of the Court in this matter. The author has not conducted any independent investigation into the facts. For the avoidance of doubt, each statement related to the law and facts in this article is drawn from the Court’s opinion in this case.
Thomas O’Connell is a Partner at Buchalter LLP and Chair of the firm’s Franchise Practice Group. For questions about this article or media inquiries, you can contact Tom at toconnell@buchalter.com.
This communication is not intended to create, and does not create, an attorney-client relationship or any other legal relationship. No statement herein constitutes legal advice, nor should it be relied upon or interpreted as such. This communication is for general informational purposes only and is not a substitute for legal counsel. Readers should not act or refrain from acting based on any information provided without seeking appropriate legal advice specific to their situation. For more information, visit www.buchalter.com.
