A district court shouldn’t have reduced the attorneys’ fees that parties in a wage-and-hour settlement agreed to, a federal appeals court ruled.

More than 1,000 OK Foods Inc. and OK Industries Inc. chicken processing plant employees opted into the settlement. The district court approved the confidential settlement but knocked the attorneys’ fees down from $87,500 to $22,500.

There appears to be a split among some circuit courts over whether district courts must exercise some level of review of Fair Labor...