September 12, 2025|Franchise Frontlines
September 12, 2025 | U.S. District Court for the District of Colorado | Unpublished Opinions
Executive Summary
In two unpublished decisions issued the same day, Magistrate Judge N. Reid Neureiter addressed plaintiffs’ allegations that Denco Construction LLC used improper pre-certification settlement agreements and simultaneously granted conditional certification of an FLSA collective. Plaintiffs alleged that Denco required Spanish-speaking employees to sign English-only releases for $500 while a wage-and-hour lawsuit was pending, and they also sought certification of a collective alleging overtime violations. Denco argued that its communications were permissible, that the releases were valid, and that conditional certification was improper. The court partially granted and partially denied the request for a protective order, required corrective notice, and granted conditional certification under the lenient FLSA notice-stage standard.
Relevant Background
Plaintiffs alleged that they worked as construction laborers at Denco and were paid straight time for overtime hours through a two-timecard system involving a related entity, Roa Construction LLC. According to the complaint, workers were allegedly paid for their first 40 hours by Denco, with additional hours paid through Roa Construction at straight time rates. Plaintiffs further alleged that after the lawsuit was filed, Denco presented certain employees—most of whom primarily spoke Spanish—with English-only settlement documents for $500 that purported to release wage claims. The documents allegedly did not mention the lawsuit, did not reference employees’ potential rights, and were signed during a brief period in December 2024.
The evidence presented at a March 2025 evidentiary hearing included testimony from employees and a Denco supervisor about how the agreements were distributed, the languages used, and the circumstances surrounding the payments. These details were relevant only to the court’s evaluation of whether additional corrective measures were warranted at this stage and did not constitute factual findings regarding the underlying wage-and-hour allegations. Alongside these issues, plaintiffs filed a motion for conditional certification of a collective of construction workers who they alleged were subject to common overtime pay practices.
Decision
The court issued two coordinated rulings: one on plaintiffs’ request for a protective order and corrective notice, and one on conditional certification of an FLSA collective.
A. Protective Order and Corrective Notice
The court first considered plaintiffs’ request to invalidate the settlement agreements and to prohibit pre-certification communications. Judge Neureiter found that the 61 $500 agreements signed by non-plaintiff employees were “presumptively invalid” due to the circumstances described in the hearing record, including the timing of the agreements, the use of English-only documents for Spanish-speaking workers, the lack of reference to the pending litigation, and the fact that all employees who received the documents ultimately signed them.
Despite finding the agreements presumptively invalid, the court declined to invalidate them at this stage because none of the affected employees had yet opted in. Instead, the court concluded that the proper remedy was to provide a corrective notice informing employees of the lawsuit, their right to participate, and the possibility that any prior waivers might later be deemed unenforceable. The court relied on its authority under Rule 23(d) to regulate pre-certification communications and found that corrective measures were appropriate.
The court declined to address or invalidate higher-value settlements involving certain individuals, including named plaintiffs, because those agreements were beyond the scope of the motion. The court emphasized that future opt-ins could individually challenge their agreements if they chose to join the case.
B. Conditional Certification of FLSA Collective
In a separate ruling, the court granted conditional certification of a collective of construction workers dating back to October 7, 2021. Judge Neureiter applied the lenient preliminary standard under Thiessen, finding that plaintiffs had provided substantial allegations that they were subject to a common pay practice involving two timecards and straight time for overtime work.
The court also rejected arguments that conditional certification should be denied because of individualized issues or because some plaintiffs had settlement agreements. The court emphasized that such issues were better suited for later stages of the case. The court ordered defendants to produce contact information for potential opt-in plaintiffs and approved the distribution of notice via mail, email, text message, and workplace posting, with certain modifications. The court also applied limited equitable tolling beginning on the date plaintiffs first moved for conditional certification.
Looking Forward
These rulings may illustrate how courts evaluate wage-and-hour claims at the early stages of FLSA litigation. At the notice stage, courts apply a low threshold, often finding that allegations of a uniform policy or practice are enough to conditionally certify a collective. The rulings also show that courts may scrutinize pre-certification settlement efforts when the timing, language used, or circumstances raise concerns about whether putative collective members understood their rights. Different courts may reach different conclusions depending on the facts presented, the nature of the communications, and the procedural posture of the case.
For employers, the decisions may provide insight into how courts view the distribution of releases to employees while wage-and-hour litigation is pending and how courts may use corrective notice to manage communications under Rule 23(d). Future stages of this case will depend on the evidence developed through discovery, including the specifics of job duties, pay practices, and the circumstances surrounding any pre-litigation or mid-litigation agreements. As with all wage-and-hour litigation, outcomes will vary depending on jurisdiction, the quality of the factual record, and the defenses raised as the case progresses.
This article is based solely on the opinions 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 opinions in this case.
Thomas O’Connell is a Shareholder at Buchalter APC 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.
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