The U.S. Court of Appeals for the Eleventh Circuit issued a published decision Tuesday clarifying how settlement agreements involving Fair Labor Standards Act claims must be handled when combined with other legal theories. The ruling in *Thomas O'Neal v. American Shaman Franchise Systems, Inc.* (11th Cir. 2026) addresses a complex franchise dispute that originated in the U.S. District Court for the Middle District of Florida.
The case stems from litigation between Thomas O'Neal and multiple entities within the CBD American Shaman franchise system, including American Shaman Franchise Systems, Inc., CBD American Shaman, LLC, Shaman Botanicals, LLC, SVS Enterprises, LLC, and individual Steven Vincent Sanders II. O'Neal brought claims under several legal theories, including allegations under the Fair Labor Standards Act.
According to the court's opinion, written by Circuit Judge Brasher and joined by Circuit Judges Rosenbaum and Grant, the central legal question involves the application of established Eleventh Circuit precedent regarding FLSA settlement agreements. The court referenced its holding in *Lynn's Food Stores, Inc. v. United States* (11th Cir. 1982), which established that settlement agreements can only bar litigation of wage-and-hour claims under the FLSA if the settlement receives approval from either a federal court or the Department of Labor.
The facts show that O'Neal signed a settlement agreement releasing "any and all" claims against the defendants in exchange for several thousand dollars. However, the settlement agreement did not receive approval from either a court or the Department of Labor, creating the legal issue that reached the appeals court.
The Eleventh Circuit faced the novel question of how the *Lynn's Food Stores* rule applies when FLSA claims are bundled together with non-FLSA legal theories in a single settlement agreement. This represents a common scenario in employment litigation, where plaintiffs often assert multiple claims ranging from federal wage-and-hour violations to state law contract or tort claims.
The CBD American Shaman franchise system operates numerous retail locations selling cannabidiol products across multiple states. The franchise dispute underlying this case appears to involve employment-related claims, though the specific nature of O'Neal's relationship with the franchise entities and the underlying facts giving rise to his FLSA claims are not detailed in the available portions of the opinion.
The published nature of this decision indicates the Eleventh Circuit views the legal question as having broader significance beyond the immediate parties. Published circuit court decisions establish binding precedent within the circuit and provide guidance for district courts and litigants facing similar legal issues.
The case number 24-10900 indicates the appeal was filed in 2024, with the decision issued in February 2026. The district court case originated under docket number 8:20-cv-00936-KKM-AAS, showing the underlying litigation began in 2020 in the Middle District of Florida.
This ruling has implications for employment lawyers, franchise attorneys, and businesses operating in Alabama, Florida, and Georgia, which comprise the Eleventh Circuit. The decision will likely influence how settlement negotiations are structured when FLSA claims are involved, particularly in cases where multiple legal theories are asserted.
The involvement of multiple corporate entities in the American Shaman franchise system reflects the complex business structures common in modern franchise operations. The defendants include both the franchisor entities and what appears to be a franchisee entity, Florida Shaman Properties, LLC, suggesting the dispute may involve relationships at multiple levels of the franchise system.
For practitioners handling FLSA settlements, this decision emphasizes the continued importance of the approval requirements established in *Lynn's Food Stores*. The ruling will provide clarity on whether partial settlements of non-FLSA claims can proceed when FLSA claims remain unresolved due to lack of court or Department of Labor approval.
The timing of this decision comes amid ongoing federal enforcement emphasis on wage-and-hour compliance, particularly in industries like retail and hospitality where franchise business models are common. The CBD retail industry, while relatively new, has faced various regulatory and legal challenges as it has grown rapidly following changes in federal cannabis laws.
Moving forward, this case will serve as important precedent for district courts within the Eleventh Circuit when evaluating settlement agreements involving mixed FLSA and non-FLSA claims. The decision also highlights the continuing relevance of decades-old precedent in *Lynn's Food Stores* to modern employment litigation scenarios.