Todd v. Daewon America, Inc.

Filing 127

OPINION AND ORDER denying 123 MOTION to File the Parties Joint Settlement Agreement Under Seal, as further set out in order. Signed by Honorable Judge Myron H. Thompson on 6/11/2014. (wcl, )

IN THE DISTRICT COURT OF THE UNITED STATES FOR THE
MIDDLE DISTRICT OF ALABAMA, EASTERN DIVISION

KELVIN TODD,
Plaintiff,
v.
DAEWON AMERICA, INC.,
Defendant.

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CIVIL ACTION NO.
3:11cv1077-MHT
(WO)

OPINION AND ORDER
Plaintiff Kelvin Todd brings this action under the
Fair Labor Standards Act (FLSA), 29 U.S.C. §§ 201-219, on
behalf of himself and others similarly situated, claiming
that his former employer, defendant Daewon America, Inc.,
violated

the

FLSA’s

overtime-pay

provisions.

Jurisdiction is proper pursuant to 29 U.S.C. § 216(b)
(FLSA) and 28 U.S.C. § 1331 (federal question).
Daewon

America

has

filed

a

motion

to

parties’ joint proposed settlement agreement.

seal

the

For the

reasons that follow, the company’s motion will be denied.

I.
Todd worked for Daewon America in several different
departments

at

its

manufacturing

plant

in

Opelika,

Alabama, including shot peening, assembly, and paint.
His last rate of pay with the company was $ 13.40 an
hour, with an overtime rate of $ 20.10 an hour.
Todd alleges that, although the company paid him some
overtime, it did not pay him for all the overtime he
worked. The FLSA requires that any employee who works
over 40 hours a week receive one-and-a-half times his
regular pay for all excess hours.

29 U.S.C. § 207.

Todd contends that he was underpaid as a result of
Daewon

America’s

rounding

practices.

The

company’s

policy was to pay for pre-shift overtime work only if the
employee worked an excess of 15 minutes before the start
of his shift.

Todd regularly began work for the company

before the start of his shift, but was not paid for that
time because it did not exceed 15 minutes; if he worked
more than 15 minutes pre-shift, the company paid him for

2

the 15 minutes but no more.

Later, the company changed

its policy so that it would not pay for any pre-shift
time unless the employee worked an excess of 30 minutes
pre-shift.
further

According to Todd, this change resulted in

under-compensation

in

violation

of

FLSA.

Additionally, Todd says he was routinely required to work
through his lunch break, but Daewon still deducted 30
minutes pay for his lunch.
Todd filed this lawsuit alleging that, in violation
of the FLSA, Daewon America had a policy of paying for
only 15 minutes of pre-shift work and that as a result of
this policy the company shorted his overtime pay.

He

also alleges that the company, in violation of the FLSA,
deducted 30 minutes of pay for a lunch break despite
regularly

requiring

him

to

work

through

lunch.

He

subsequently moved for conditional class certification so
as to notify potential class members of their right to
opt into his lawsuit under the FLSA’s collective-action
provision, 29 U.S.C. § 216(b). The court conditionally

3

certified a class “consisting of those nonexempt, hourly
wage employees who worked at defendant Daewon America,
Inc.’s manufacturing plant in Opelika, Alabama for the
three years preceding initiation of this suit to the
present.”

Todd v. Daewon Am., Inc., 2013 WL 557859 *6

(M.D. Ala. 2013), as amended by Todd v. Daewon Am., Inc.,
2013 WL 1163431 *2 (M.D. Ala. 2013).

The court further

approved a notice procedure to persons who were alleged
members of the class.

Todd v. Daewon Am., Inc., 2013 WL

1163431 (M.D. Ala. 2013), as amended by order of April 3,
2013 (Doc. No. 36).

Forty or so persons opted into this

case.
Todd and the remaining opt-in plaintiffs in the case
have

negotiated

a

settlement

agreement

America regarding their FLSA claims.

with

Daewon

One provision in

the agreement provides that its terms are to remain
confidential.

Based on this provision, Daewon America

now requests that the settlement agreement be filed under
seal.

Todd opposes the motion to seal the agreement.

4

II.
When an employee brings a private action under the
FLSA and presents a proposed settlement agreement to the
district

court,

“the

district

court

may

enter

a

stipulated judgment after scrutinizing the settlement for
fairness.” Lynn’s FoodStores, Inc. v. United States Dept.
Of Labor, 679 F.2d 1350, 1353 (11th Cir. 1982).

The

court must determine whether the parties have reached an
agreement based on a negotiated, good-faith compromise of
a

bona-fide

dispute

over

application

of

relevant

provisions of the FLSA and of wages owed under the FLSA
based

on

the

assertion

that

Todd

was

not

properly

compensated for his work and overtime.
Pursuant to its settlement with Todd, Daewon America
has moved to seal that settlement and thus keep it
confidential.

The court cannot agree to this aspect of

the settlement for two reasons.
First, there is the general, albeit qualified, right
of the public to access to court records.

5

One legal

writer put it this way: “Essential to the rule of law is
the public performance of the judicial function.
public

resolution

of

court

cases

and

The

controversies

affords accountability, fosters public confidence, and
provides notice of the legal consequences of behaviors
and choices. ...
The

First

qualified

This right is rooted in the common law.

Amendment
right

of

also

confers

access.”

on

Robert

the

public

Timothy

a

Reagan,

Sealing Court Records and Proceedings: A Pocket Guide
(Federal

Judicial

Center)

(2010)

at

1

(footnotes

omitted); see also Nixon v. Warner Communications, Inc.,
435

U.S.

589,

596

(stressing

the

importance

of

the

common-law privilege of the public to inspect judicial
records); Romero v. Drummond Co., Inc., 480 F.3d 1234,
1245-1246 (11th Cir. 2007) (discussing the common law and
presumptive right of public access to court records,
including in the context of settlement agreements).
This qualified right of public access also attaches
when the parties file their agreement. See also Brown v.

6

Advantage Engineering, Inc., 960 F.2d 1013, 1015-1016
(11th

Cir.

1992);

Bank

of

Am.

v.

Hotel

Rittenhouse

Assocs., 800 F.2d 339, 343-45 (3d Cir. 1986); S.E.C. v.
Van Waeyenberghe, 990 F.2d 845, 849 (5th Cir. 1993).
above

already-quoted

follows:

“Parties

legal
may

writer

wish

to

explained
settle

why

their

The
as

cases

according to confidential terms, and often there is no
need to file settlement agreements. [See generally Robert
Timothy Reagan, Sealed Settlement Agreements in Federal
District Court (Federal Judicial Center 2004).]

Often,

however, the agreement requires court approval or the
parties wish to retain the court’s jurisdiction over
enforcement.
filed,

and

In those situations, the agreement may be
then

a

qualified

right

of

public

access

attaches. [Bank of Am. v. Hotel Rittenhouse Assocs., 800
F.2d 339, 343–45 (3d Cir. 1986); SEC v. Van Waeyenberghe,
990

F.2d

845,

849

(5th

Cir.

1993).]

As

one

court

observed, ‘The public has an interest in knowing what
terms of settlement a federal judge would approve and

7

perhaps therefore nudge the parties to agree to.’ [Jessup
v. Luther, 277 F.3d 926, 929 (7th Cir. 2002)].”

Sealing

Court Records and Proceedings: A Pocket Guide, supra, at
16

(bracketed

citations

in

original

quotation

as

footnotes).
Nevertheless, as stated, this right is qualified. In
other words, there are exceptions.

“On occasion ...

there are good reasons for courts to keep parts of some
proceedings confidential.
classified

information,

Courts will keep confidential
ongoing

investigations,

trade

secrets, and the identities of minors, for example.”
Sealing Court Records and Proceedings: A Pocket Guide,
supra, at 1.
Here, Daewon America asks that this court seal its
agreement with Todd.

However, other than referring to

the agreement, the company offers nothing in support of
its request.

The mere fact that both parties have agreed

to confidentiality of an agreement is insufficient to
override the right of the public to have access to that

8

agreement.

For, this right belongs to the public and not

just to the parties, and, as a result, it cannot be
impinged or waived merely by agreement of the parties.
Cf. Zedner v. United States, 547 U.S. 489, 500-01 (2006)
(“The purposes of the [Speedy Trial Act of 1974, 18
U.S.C. §§ 3161-3174,] also cut against exclusion on the
grounds of mere consent or waiver.

If the Act were

designed solely to protect a defendant's right to a
speedy trial, it would make sense to allow a defendant to
waive the application of the Act.

But the Act was

designed with the public interest firmly in mind. See,
e.g., § 3161(h)(8)(A) (to exclude delay resulting from a
continuance-even one ‘granted ... at the request of the
defendant--the district court must find ‘that the ends of
justice served ... outweigh the best interest of the
public and the defendant in a speedy trial’ (emphasis
added)).

That public interest cannot be served, the Act

recognizes,

if

defendants

may

entirely.”).

9

opt

out

of

the

Act

Indeed, the Eleventh Circuit Court of Appeals has
explained that: “It is immaterial whether the sealing of
the record is an integral part of a negotiated settlement
between the parties, even if the settlement comes with
the

court's

active

encouragement.

Once

a

matter

is

brought before a court for resolution, it is no longer
solely the parties' case, but also the public's case.
Absent a showing of extraordinary circumstances set forth
by the district court in the record ..., the court file
must

remain

accessible

to

the

public.”

Brown

v.

Advantage Eng'g, Inc., 960 F.2d 1013, 1016 (11th Cir.
1992).

And this court has further explained that: “The

strength of the presumption of openness falls along a
continuum,

with

the

presumption

being

stronger

for

documents that ‘directly affect an adjudication’ than for
documents, such as certain discovery materials, that
‘come within a court's purview solely to insure their
irrelevance.’”
1260,

1264

Stalnaker v. Novar Corp., 293 F. Supp. 2d

(M.D.

Ala.

2003)

10

(Thompson,

J.)

(quoting

United

States

v.

Amodeo,

71

F.3d

1044,

1049

(2nd

Cir.1995)).
Therefore, the parties must have some reason, other
than their own mere desire, to override the public’s
interest in open judicial records, and, according to the
Eleventh

Circuit,

that

reason

must

be

based

on

“extraordinary circumstances.” Brown, 960 F.2d at 1016.
Here, Daewon America has not proffered such a reason.
Second, in its capacity of reviewing the proposed
settlement under the FLSA for fairness, the court is
convinced that the confidentiality agreement not only
offers no benefit to Todd and the opt-in plaintiffs, it
unfairly subjects them to a specter of contempt, both
civil and criminal.

See Hogan v. Allstate Beverage Co.,

Inc., 821 F. Supp. 2d 1274, 1283-84 (M.D. Ala. 2011)
(Thompson, J.) (finding that confidentiality provisions
unequally benefit the employer and frustrate FLSA goals);
Dees v. Hydradry, Inc., 706 F. Supp. 2d 1227, 1242 (M.D.
Fla.

2010 (Merryday, J.); see also Elizabeth Wilkins,

11

Silent

Workers,

Disappearing

Rights:

Confidential

Settlements and the Fair Labor Standards Act, 34 Berkeley
J. Emp. & Lab. L. 109, 113 (2013) (“Congress’s intent to
protect both the public’s interest in a well-functioning
economy and the vulnerable worker subject to unequal
bargaining

dynamics

settlements.”).

militates

against

secret

Daewon America has not presented any

explanation or justification for imposing such an unfair
confidentiality
plaintiffs.

requirement

on

Todd

and

the

opt-in

The company’s mere desire for secrecy is

insufficient to outweigh this unfairness to them.
***
Accordingly, it is ORDERED that defendant Daewon
America,

Inc.’s

motion

to

file

the

parties’

joint

settlement agreement under seal (Doc. No. 123) is denied.
The proposed settlement is to be filed unsealed.
DONE, this the 11th day of June, 2014.

/s/ Myron H. Thompson
UNITED STATES DISTRICT JUDGE