NEW YORK — Solyndra LLC, the bankrupt solar panel maker that received a $535 million Energy Department loan guarantees, reached a $3.5 million settlement with former workers who claimed they received inadequate layoff notices.

The settlement will resolve allegations the company failed to give employees 60 days’ notice under the Worker Adjustment and Retraining Notification Act when it fired most of its 1,100-person workforce on Aug. 31, just before seeking bankruptcy protection last year.

Solyndra will set up a $3.5 million fund to be distributed to the workers two weeks after the settlement is effective, according to court papers. The settlement was jointly proposed by Solyndra and the former employees.

Solyndra faced as much as $15 million in damages plus attorney’s fees if the workers succeeded, according to court documents.

The company said the agreement is also fair to workers because without it they would have had to “wait years for any payment” on their claims.

The settlement is subject to court approval, and fired employees can choose to opt out, according to the filing. Both sides asked that the first of two hearings on it be set for Sept. 7.