Opinion
11-CV-1531 (JG) (RML).
November 08, 2011.
ORDER
FOR ONLINE PUBLICATION ONLY
In this action, plaintiff Daniel Cepeda (“Cepeda”), the resident janitor of defendants’ apartment building, alleges, inter alia, that defendants failed to pay him minimum wage and overtime, in violation of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 207(a)(1), 215(a)(2). On November 1, 2011, the parties submitted a stipulation of dismissal of claims. ECF No. 13. On November 2, 2011, I entered an order directing the parties to show cause why I should approve the settlement agreement and dismiss the case. On November 7, 2011, the parties jointly filed a response requesting approval of the settlement agreement and further requesting that the agreement not be filed publicly on the court’s docket. ECF No. 14. The parties failed to provide a copy of the settlement agreement along with their application, whether for in camera review or otherwise. Id.
Under the FLSA, a private party may not waive or settle claims for unpaid wages unless the settlement is either (1) supervised by the Secretary of Labor, or (2) judicially approved. See Mosquera v. Masada Auto Sales, Ltd., No. 09-CV-4925 (NGG), 2011 WL 282327, at *1 (E.D.N.Y. Jan. 25, 2011); Le v. SITA Info. Networking Computing USA, Inc., No. 07-CV-86 (JS) (MLO), 2008 WL 724155, at *1 (E.D.N.Y. Mar. 13, 2008); see also 29 U.S.C. § 216(c); D.A. Schulte, Inc. v. Gangi, 328 U.S. 108, 113 n. 8 (1946). “In deciding whether to approve a stipulated settlement, the Court must ‘scrutiniz[e] the settlement for fairness.’” Medley v. Am. Cancer Soc’y, No. 10-CV-3214 (BSJ), 2010 WL 3000028, at *1 (S.D.N.Y. July 23, 2010) (quoting Lynn’s Food Stores, Inc. v. United States, 679 F.2d 1350, 1353 (11th Cir. 1982) (alteration in original)).
Because judicial approval is required for settlement under the FLSA, settlement agreements in FLSA cases are judicial documents to which a presumption of public access applies. Mosquera, 2011 WL 2823267, at *2; Joo v. Kitchen Table, Inc., 763 F. Supp. 2d 643, 646-47 (S.D.N.Y. 2011); Hens v. Clientlogic Operating Corp., No. 05-CV-381S, 2010 WL 4340919, at *2 (W.D.N.Y. Nov. 2, 2010); Xue Lian Lin v. Comprehensive Health Mgmt., No. 08-CV-6519 (PKC), 2009 WL 2223063, at *1 (S.D.N.Y. July 23, 2009). Accordingly, “there is a strong presumption in favor of keeping settlement agreements in FLSA wage-settlement cases unsealed and available for public view.” Hens, 2010 WL 4340919, at *2 (internal quotation marks omitted). Not only does the public have a general “interest in the content of documents upon which a court’s decision is based, including a determination of whether to approve a settlement,” but also the “private-public character of employee rights under the FLSA” further weigh in favor of public access, as “the public has an independent interest in assuring that employees[’] wages are fair and thus do not endanger the national health and well-being.” Id.(internal quotation marks omitted); see also Mosquera, 2011 WL 2823267, at *1 (noting that courts have banned confidentiality provisions in FLSA settlement agreements and required such agreements to be filed publicly “[a]s a corollary to the fear that employers will coerce employees into settlement and waiver” (internal quotation marks and brackets omitted)). To overcome the strong presumption of public access, parties seeking the sealing of an FLSA settlement must make a “substantial showing of . . . need” for their settlement agreement not to be filed on the public docket. Mosquera, 2011 WL 2823267, at *2; accord Joo, 763 F. Supp. 2d at 647 (joining “the overwhelming consensus of district courts that have considered the issue to hold that an FLSA settlement cannot be sealed absent some showing that overcomes the presumption of public access”).
Here, the parties suggest four reasons why the settlement agreement should not be filed publicly. First, they suggest that the agreement already qualifies as being “judicially supervised,” because the parties agreed to “[a]ll material terms and conditions of the settlement” on the record during a settlement conference held before Magistrate Judge Robert Levy on August 18, 2011. ECF No. 14, at 1. Second, the parties represent that they “have been operating under the terms of the settlement agreement . . . for the last several months,” and “undo”-ing the agreement at this late date would cause substantial trouble for both parties. Id. at 2. Third, they assert that public filing is unnecessary here because Cepeda “was the lone resident janitor” employed by the defendants, and therefore there is no potential for a class action. Id. Fourth, the parties state that confidentiality was “an essential term” of the settlement agreement. Id.
None of these asserted reasons is persuasive. First, regardless of whether the parties agreed to the settlement agreement’s material terms in front of Judge Levy, this Court has an obligation to scrutinize the agreement for fairness prior to approving it. I am unable to perform that task because the parties have failed to provide me with a copy of the settlement. Second, because FLSA settlement agreements must be judicially approved to be enforceable, the parties’ decision to substantially perform the agreement prior to seeking judicial approval was done “at [their] peril,” see Dees v. Hydradry, Inc., 706 F. Supp. 2d 1227, 1237 (M.D. Fla. 2010), and does not insulate their settlement agreement from judicial scrutiny. Third, the parties may not avoid application of the presumption of public access simply by noting that the policies underlying the presumption are not maximally present in this case. Rather, the parties must overcome the presumption by making a substantial showing of need to restrict access to the settlement agreement in this case. Whether Cepeda was the “sole” janitor employed by defendants or one of many does not bear on whether there is a substantial need for privacy in this case. Fourth, courts in this circuit have consistently held that the parties’ mutual agreement to seal an FLSA settlement agreement is insufficient to prevent its disclosure. See Joo, 763 F. Supp. 2d at 648 (refusing to approve an FLSA settlement agreement unless it could be filed publicly, even though the parties argued that “confidentiality is an essential component of the agreement”); Hens, 2010 WL 4340919, at *3 (joining “the overwhelming majority of district courts in finding that a stipulation to seal does not outweigh the strong presumption of public access to an FLSA settlement agreement,” even where the parties contended that “confidentiality is a material condition of the settlement agreement without which settlement will not be feasible”); see also Dees, 706 F. Supp. 2d at 1242 (noting the “inherent impropriety of a confidentiality agreement in settlement of an FLSA dispute,” because “compelled silence” in the settlement of an FLSA dispute “contravenes the legislative purpose of the FLSA and undermines the Department of Labor’s regulatory effort to notify employees of their FLSA rights”).
Accordingly, the parties are ordered to file on the public docket the settlement agreement reached in this case on or before November 15, 2011, at which time the court will consider whether to approve the settlement and dismiss the case. If the parties fail to file the settlement agreement on the public docket on or before November 15, 2011, the agreement will not have the effect of dismissing the claims in this case.
So ordered.