Opinion
CIVIL ACTION NO. 3:09cv290-SRW.
November 10, 2010
MEMORANDUM OPINION and ORDER
Plaintiff Chris Scott brings the present action against defendant Memory Company, LLC, and Charles Sizemore, its owner and Chief Executive Officer, pursuant to the Fair Labor Standards ("FLSA"), 29 U.S.C. § 201 et seq. Scott alleges that he was employed by Memory Company between August 18, 2008 and January 29, 2009, that Memory Company classified him as an "exempt employee" for purposes of the FLSA, that he routinely worked more than forty hours per week and that, when he challenged the "exempt" status assigned to him, Memory Company terminated his employment. Plaintiff asserts two claims against the defendants, one for defendants' allegedly willful violation of the FLSA's overtime provisions, and one for retaliatory discharge. This action is presently before the court on the joint stipulation for voluntary dismissal, the motion for approval of settlement agreement, and the joint motion to seal the General Release and Waiver Agreement. (Docs. ## 32, 33, 34). This matter came before the court for hearing on November 8, 2010; plaintiff and counsel for the parties appeared at the hearing.
The FLSA was enacted to protect employees from substandard wages and excessive working hours; its provisions are mandatory and not subject to bargaining between employers and employees.Lynn's Food Stores v. United States Dept. of Labor, 679 F.2d 1350, 1352 (11th Cir. 1982). An employee's claim for back wages under the FLSA may be compromised in only two ways: (1) with payment in full of back wages, supervised by the Secretary of Labor, with the employee giving up a right to sue for unpaid wages and liquidated damages; (2) by stipulated judgment entered by a court in an FLSA action brought against the employer, entered after the court has "scrutiniz[ed] the settlement for fairness." Id. at 1352-53. The court may approve a settlement which presents a reasonable compromise over issues that are actually in dispute with regard the pending FLSA claims. Id. Additionally, the "FLSA requires judicial review of the reasonableness of counsel's legal fees to assure both that counsel is compensated adequately and that no conflict of interest taints the amount the wronged employee recovers under a settlement agreement. FLSA provides for reasonable attorney's fees; the parties cannot contract in derogation of FLSA's provisions." Silva v. Miller, 307 Fed. Appx. 349 (11th Cir. 2009) (unpublished opinion) (citations omitted).
In this case, there are actual disputes over plaintiff's FLSA claims, including whether plaintiff is a non-exempt employee covered by the FLSA's overtime provision, the amount of back pay to which he is entitled (if he is not an exempt employee), whether plaintiff was terminated for "protected activity" under the FLSA, and whether defendants willfully violated the FLSA, as plaintiff alleges. In view of the disputed issues in both claims before the court, the amount that plaintiff would be entitled to recover for unpaid overtime if he prevailed on his overtime claim, and the compensation that he will receive from the settlement after payment of attorney's fees pursuant to his contingency fee agreement with his attorney, the court concludes that the settlement is a fair and reasonable compromise of the disputed issues and, further, that the amount of the attorney's fee is not unreasonable.
The court can envision scenarios in which a contingency fee agreement would result in a net recovery to the plaintiff which renders the agreement unreasonable. This is not such a case.
In this case, the parties' agreement includes a confidentiality clause. (Doc. # 34-1, General Release, ¶ 5). The parties have filed a joint motion to file the settlement agreement under seal, to protect the confidentiality of the terms and conditions of the agreement. (Doc. # 34, Motion for Approval of Settlement Agreement, ¶ 7; Doc. # 32, Joint Motion for Filing Settlement Agreement Under Seal). "Absent some compelling reason, the sealing from public scrutiny of FLSA agreements between employees and employers would thwart the public's independent interest in assuring that employees' wages are fair and thus do not endanger `the national health and well-being.' . . . A court faced with a request to seal judicial documents should weigh the interests protected by the presumption of openness (especially in FLSA cases) and the first-amendment values of freedom of speech and of the press, against the parties' interest in secrecy." Stalnaker v. Novar Corp., 293 F. Supp. 2d 1260 (M.D. Ala. 2003). In the motion to seal, the only reason advanced for sealing the agreement is that the parties' agreement includes a confidentiality provision. (See Doc. #32). "The fact that the settlement agreement contains a confidentiality provision is an insufficient interest to overcome the presumption that an approved FLSA settlement agreement is a judicial record, open to the public." Prater v. Commerce Equities Management Company, Inc., 2008 WL 5140045 (S.D. Tex. Dec. 8, 2008). During the hearing, defense counsel advanced additional justification for sealing the agreement — that the employer wished to avoid gossip about the settlement by employees who are not fully informed about the basis for the settlement and, also, that the employer disputes liability and the settlement may be mistakenly perceived as an admission of liability. The court notes that the settlement agreement contains a clause indicating that the defendant denies liability and that payment does not constitute an admission of liability. (Doc. # 34-1, ¶ 4). Defendant has not proffered compelling reasons which outweigh the public's independent interest in access to the judicial record of this FSLA dispute.
Additionally, the court declines to approve the confidentiality provision contained in the agreement. (Doc. # 34-1, ¶ 5). "Because of worry that settling with one employee will encourage other employees to assert FLSA rights, the employer may seek to maintain the confidentiality of the settlement agreement. But a confidentiality provision furthers resolution of no bona fide dispute between the parties; rather, compelled silence unreasonably frustrates implementation of the `private-public' rights granted by the FLSA and thwarts Congress's intent to ensure widespread compliance with the statute. . . . A confidentiality provision in an FLSA settlement agreement both contravenes the legislative purpose of the FLSA and undermines the Department of Labor's regulatory effort to notify employees of their FLSA rights." Dees v. Hydradry, Inc., 706 F.Supp.2d 1227, 1242 (M.D. Fla. 2010); see also Glass v. Krishna Krupa, LLC, 2010 WL 4064017 (S.D. Ala. Oct. 15, 2010) (following Dees); Poulin v. General Dynamics Shared Resources, Inc., 2010 WL 1813497 (W.D. Va. May 5, 2010) (following Dees, and also noting that "the confidentiality provisions are likely unenforceable in light of the public filing of the Settlement Agreement"). At the hearing, defense counsel represented that the parties do not want the confidentiality issue to hold up the settlement. Accordingly, the court will grant the parties' motion to approve the settlement agreement, but without the confidentiality provision.
CONCLUSION
Accordingly, it is
ORDERED that the motion to approve settlement (Doc. # 34) is GRANTED as to all but paragraph 5 of the General Release and Waiver Agreement, and this case will be dismissed pursuant to the settlement between the parties. An appropriate judgment will be entered.
It is further ORDERED that the joint motion to file the settlement agreement under seal (Doc. # 32) is DENIED.
Done, this 10th day of November, 2010.
A copy of this checklist is available at the website for the USCA, 11th Circuit at www.ca11.uscourts.gov Effective on April 9, 2006, the new fee to file an appeal will increase from $255.00 to $455.00. CIVIL APPEALS JURISDICTION CHECKLIST1. Appealable Orders : Appeals from final orders pursuant to 28 U.S.C. § 1291: 28 U.S.C. § 158Pitney Bowes, Inc. v. Mestre 701 F.2d 1365 1368 28 U.S.C. § 636 In cases involving multiple parties or multiple claims, 54Williams v. Bishop 732 F.2d 885 885-86 Budinich v. Becton Dickinson Co. 108 S.Ct. 1717 1721-22 100 L.Ed.2d 178LaChance v. Duffy's Draft House, Inc. 146 F.3d 832 837 Appeals pursuant to 28 U.S.C. § 1292(a): Appeals pursuant to 28 U.S.C. § 1292(b) and Fed.R.App.P. 5: 28 U.S.C. § 1292 Appeals pursuant to judicially created exceptions to the finality rule: Cohen v. Beneficial Indus. Loan Corp. 337 U.S. 541 546 69 S.Ct. 1221 1225-26 93 L.Ed. 1528Atlantic Fed. Sav. Loan Ass'n v. Blythe Eastman Paine Webber, Inc. Gillespie v. United States Steel Corp. 379 U.S. 148 157 85 S.Ct. 308 312 13 L.Ed.2d 199 2. Time for Filing Rinaldo v. Corbett 256 F.3d 1276 1278 4 Fed.R.App.P. 4(a)(1): 3 THE NOTICE MUST BE RECEIVED AND FILED IN THE DISTRICT COURT NO LATER THAN THE LAST DAY OF THE APPEAL PERIOD — no additional days are provided for mailing. Fed.R.App.P. 4(a)(3): Fed.R.App.P. 4(a)(4): Fed.R.App.P. 4(a)(5) and 4(a)(6): Fed.R.App.P. 4(c): 28 U.S.C. § 1746 3. Format of the notice of appeal : See also 3pro se 4. Effect of a notice of appeal : 4
Courts of Appeals have jurisdiction conferred and strictly limited by statute: (a) Only final orders and judgments of district courts, or final orders of bankruptcy courts which have been appealed to and fully resolved by a district court under , generally are appealable. A final decision is one that "ends the litigation on the merits and leaves nothing for the court to do but execute the judgment." , , (11th Cir. 1983). A magistrate judge's report and recommendation is not final and appealable until judgment thereon is entered by a district court judge. (c). (b) a judgment as to fewer than all parties or all claims is not a final, appealable decision unless the district court has certified the judgment for immediate review under Fed.R.Civ.P. (b). , , (11th Cir. 1984). A judgment which resolves all issues except matters, such as attorneys' fees and costs, that are collateral to the merits, is immediately appealable. , 486 U.S. 196, 201, , , (1988); , , (11th Cir. 1998). (c) Appeals are permitted from orders "granting, continuing, modifying, refusing or dissolving injunctions or refusing to dissolve or modify injunctions . . ." and from "[i]nterlocutory decrees . . . determining the rights and liabilities of parties to admiralty cases in which appeals from final decrees are allowed." Interlocutory appeals from orders denying temporary restraining orders are not permitted. (d) The certification specified in (b) must be obtained before a petition for permission to appeal is filed in the Court of Appeals. The district court's denial of a motion for certification is not itself appealable. (e) Limited exceptions are discussed in cases including, but not limited to: , , , , , (1949); , 890 F.2d 371, 376 (11th Cir. 1989); , , , , , (1964). Rev.: 4/04 : The timely filing of a notice of appeal is mandatory and jurisdictional. , , (11th Cir. 2001). In civil cases, Fed.R.App.P. (a) and (c) set the following time limits: (a) A notice of appeal in compliance with the requirements set forth in Fed.R.App.P. must be filed in the district court within 30 days after the entry of the order or judgment appealed from. However, if the United States or an officer or agency thereof is a party, the notice of appeal must be filed in the district court within 60 days after such entry. Special filing provisions for inmates are discussed below. (b) "If one party timely files a notice of appeal, any other party may file a notice of appeal within 14 days after the date when the first notice was filed, or within the time otherwise prescribed by this Rule 4(a), whichever period ends later." (c) If any party makes a timely motion in the district court under the Federal Rules of Civil Procedure of a type specified in this rule, the time for appeal for all parties runs from the date of entry of the order disposing of the last such timely filed motion. (d) Under certain limited circumstances, the district court may extend the time to file a notice of appeal. Under Rule 4(a)(5), the time may be extended if a motion for an extension is filed within 30 days after expiration of the time otherwise provided to file a notice of appeal, upon a showing of excusable neglect or good cause. Under Rule 4(a)(6), the time may be extended if the district court finds upon motion that a party did not timely receive notice of the entry of the judgment or order, and that no party would be prejudiced by an extension. (e) If an inmate confined to an institution files a notice of appeal in either a civil case or a criminal case, the notice of appeal is timely if it is deposited in the institution's internal mail system on or before the last day for filing. Timely filing may be shown by a declaration in compliance with or a notarized statement, either of which must set forth the date of deposit and state that first-class postage has been prepaid. Form 1, Appendix of Forms to the Federal Rules of Appellate Procedure, is a suitable format. Fed.R.App.P. (c). A notice of appeal must be signed by the appellant. A district court loses jurisdiction (authority) to act after the filing of a timely notice of appeal, except for actions in aid of appellate jurisdiction or to rule on a timely motion of the type specified in Fed.R.App.P. (a)(4).