Opinion
11-CV-1483 (JG)(CLP).
November 10, 2011.
APPEARANCES: THE LAW OFFICE OF JUSTIN A. ZELLER, P.C. 277 Broadway, Ste. 408 New York, NY 10007-2036
By: Justin A. Zeller Attorney for Plaintiff
TRIVELLA, FORTE SMITH, LLP 1311 Mamaroneck Avenue, Suite 170 White Plains, NY 10605
By: Seth Ptasiewicz Attorney for Defendants
ORDER
FOR ONLINE PUBLICATION ONLY
Plaintiff Jose Miguel Martinez (“Martinez”), formerly a restocker at defendants’ retail grocery store in Howard Beach, New York, alleges in this action that defendants failed to pay him minimum wage and overtime pay, in violation of, inter alia, the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 206(a)(1), 207(a)(1), 215(a)(2). On November 2, 2011, the parties jointly filed a stipulation of dismissal. ECF No. 18. On November 3, 2011, I entered an order directing the parties to show cause why I should approve the settlement agreement and dismiss the case. On November 4, 2011, counsel for defendants sent me a letter in response to my order to show cause, attaching a copy of the settlement agreement and requesting that I approve the settlement agreement and dismiss the case. Defendants further requested that the settlement agreement not be publicly disclosed, or in the alternative, that it be only partially disclosed, with the amount defendants paid to Martinez to settle the case redacted.
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”).
The parties here resist this characteristic of FLSA claims, calling it “wrongheaded.” Instead, they argue that the parties’ decision to preserve the confidentiality of the settlement agreement should control. I acknowledge that it fosters settlements to allow the parties to file settlement agreements under seal (or not at all), and that in the usual case, parties are generally free to keep their settlement agreements private. “But FLSA cases are different.” Hens, 2010 WL 4340919, at *2. Because parties in FLSA cases must submit their settlement agreements for judicial approval, and the court must evaluate the settlement to ensure it is fair and reasonable before approving it, the agreement and the court’s order approving it are judicial records, to which “the presumption of public access attaches.” Id.
Aside from rejecting the propriety of the presumption of public access altogether, defendants here suggest three reasons why the presumption should be overcome in this case, none of which is persuasive. They argue that public disclosure of the settlement agreement will (1) abrogate the confidentiality provision of the settlement agreement, which was a “material condition” of the agreement “without which settlement will not be feasible”; (2) harm defendants by encouraging other lawsuits; and (3) make it more likely that the parties will have to proceed with their case to trial, needlessly expending the litigants’ and court’s resources. The parties also summarily assert that the public has “no interest in what a party is willing to pay to avoid litigation.”
These asserted reasons do little if anything to distinguish this case from any other FLSA settlement. As I have explained in some of my recent orders addressing this issue, mutual agreement by the parties to seal an FLSA settlement agreement is insufficient to prevent its disclosure. Cepeda v. 251 Realty LLC, No. 11-CV-1531 (JG) (RML) (E.D.N.Y. Nov. 8, 2011); Beaumont v. CI Sales, Inc., No. 09-CV-5362 (JG) (JMA) (E.D.N.Y. Oct. 21, 2011); see also 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”); Dees v. Hydradry, Inc., 706 F. Supp. 2d 1227, 1242 (M.D. Fla. 2010) (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”). Nor is defendants’ interest in avoiding additional FLSA litigation sufficient to overcome the presumption of public access. See Hens, 2010 WL 4340919, at *4 (“Preventing the employee’s co-workers or the public from discovering the existence or value of their FLSA rights is an objective unworthy of implementation by a judicial seal.” (internal quotation marks omitted)). And it is tautological that if a party is less likely to settle, then the party is more likely to go to trial. But the defendants’ expression of that concern is simply another way of asking the court to overturn the presumption of public access in FLSA cases in order to better foster settlements, a request I have addressed above.
I have reviewed the settlement agreement in this case, and determined that it “reflects a reasonable compromise of disputed issues rather than a mere waiver of statutory rights brought about by an employer’s overreaching.” Le, 2008 WL 724155, at *1 (internal quotation marks and alteration omitted). Accordingly, I will approve the settlement agreement and dismiss the case on the condition that the settlement agreement be filed on the public docket on or before November 17, 2011.
So ordered.