Keeping FLSA Settlements Confidential: Far From a Slam Dunk
on Feb 05 in Class/Collective Action, New Jersey, Wage/Hour tagged by Michael Tiliakos
There are a handful of certainties in life: death, taxes, the Yankees in the
post-season, and the desire of an employer faced with
an FLSA collective action to condition a settlement on some sort
of confidentiality. Most employers involved in a settlement of
an FLSA action want the plaintiffs to keep the settlement
confidential to avoid copycat lawsuits from other employees who may view a
settlement as an admission of wrongdoing by the employer. In a recent decision
from the U.S. District Court for the District of New Jersey, an employer
- Camin Cargo Control – sought to file a settlement agreement in a
wage and hour case under seal. The employer argued that revealing the
terms of the settlement would place it in a competitive disadvantage and damage
its business reputation because the monetary payment to plaintiffs would send a
message of wrongdoing. Plaintiffs did not oppose the application to file the
settlement agreement under seal. The Court, relying on a broad consensus among
courts that FLSA settlements are different than “ordinary”
settlements, and a strong presumption in favor of keeping FLSA
wage settlements unsealed and available for public view, refused to file the
settlement agreement under seal. Specifically, the Court held there was a
general public interest in making sure employee wages are fair and not
endangering “the national health and well-being,” and in seeing the content of
documents upon which a court based its decision (like whether to approve a wage
and hour settlement).
Employers should still seek confidentiality in wage and hour
settlements – but they must also be prepared to address a Court’s hesitation to
grant such relief (especially in a jurisdiction like New Jersey that
follows a strong presumption in favor of public disclosure).
Employers should, for example, be prepared to articulate the legitimate private
or public interests that warrant filing an agreement under seal and how
those interests outweigh public disclosure; clearly defining how the employer
would be injured if the settlement agreement were not filed under seal; and that
less restrictive alternatives (if any) are not available. The
case is Brumley
v. Camin Cargo Control Inc., and can be found here.
NEW YORK
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New York, NY 10016
Main: 212-455-9255
Fax: 212-297-0005
SAN FRANCISCO
201 Spear Street, Suite 1100
San Francisco, CA 94105
Main: 415-230-5334
Fax: 212-297-0005
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