Sutton et al v. Clayton Hospitality Group, Inc. et al
Filing
105
ORDER denying 104 Motion to seal. Signed by Magistrate Judge Thomas B. Smith on 5/11/2015. (SMW)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
ORLANDO DIVISION
JOHN SUTTON, ROBERT
HENDERSON, JAMIE MARZOL,
MARCUS LANEY, BRIAN ESPE,
MICHAEL SEALOCK and JOEL JUREK,
Plaintiffs,
v.
Case No: 6:14-cv-571-Orl-40TBS
CLAYTON HOSPITALITY GROUP, INC.,
CAROL URANICK, DOLL HOUSE, INC.
and WILAN CORPORATION,
Defendants.
ORDER
This case is before the Court on the parties’ Joint Motion to Seal Settlement
Agreement (Doc. 104). For the reasons that follow, the motion is DENIED.
Plaintiffs bring this action for damages pursuant to the Fair Labor Standards Act,
29 U.S.C. §§ 201, et seq. (the “FLSA”). They allege that Defendants misclassified them
as independent contractors and failed to pay them the statutory minimum wage for the
hours they worked. (Doc. 65). Defendants deny liability and have counterclaimed for
“tip out” money received by Plaintiffs (Doc. 99).
On May 5, 2015, Plaintiffs gave notice that John Sutton, Robert Henderson, Jamie
Marzol, Marcus Laney, and Joel Jurek’s claims against Defendants had been settled at
mediation (Doc. 100). However, the parties did not file a motion for approval of their
settlement agreement, or a copy of the agreement. So, the Court entered an order sua
sponte, giving the parties 14 days to submit their settlement agreement for approval (Doc.
101). The parties have now filed their settlement agreement (Doc. 102). If the Court
accepts and adopts the settlement agreement then the parties ask that it be sealed (Doc.
104).
The motion to seal violates Local Rule 3.01(a) because it does not contain a
memorandum of legal authority in support of the parties’ request.
The settlement agreement contains a confidentiality clause. Nondisclosure
provisions in FLSA settlement agreements “further[ ] resolution of no bona fide dispute
between the parties” while “thwart[ing] Congress's intent to ensure widespread
compliance with” the FLSA. Dees v. Hydradry, 706 F.Supp.2d 1227, 1242 (M.D.Fla.
2010). Therefore, a number of courts routinely reject FLSA settlement agreements
containing confidentiality provisions. Housen v. Econosweep & Maintenance Serv., Inc.,
2013 WL 245985 at *2 (M.D.Fla. June 6, 2013); DeGraff v. SMA Behavioral Health Serv.,
Inc., 2013 WL 2177984 at *4 (M.D.Fla. Mar. 5, 2013); Crabtree v. Volkert, Inc., 2013 WL
593500 at *4 (S.D.Ala. Feb. 14, 2013); Parker v. Encore Rehabilitation, Inc., 2012 WL
6680311 at *4-5 (S.D.Ala. Dec. 21, 2012); Webb v. CVS Caremark Corp., 2011 WL
6743284 at *1-2 (M.D.Ga. Dec. 23, 2011); Hamilton v. Brinker Int'l Payroll Co., 2011 WL
6032945 at *1 (M.D.Fla. Dec. 5, 2011); Walker v. U.S. Title Loans, Inc., 2011 WL
1789976 at *2 (M.D.Ala. May 10, 2011). Accordingly, sealing of the parties’ settlement
agreement is not appropriate.
Even if this was not an FLSA case, the public enjoys a qualified common-law right
of access to judicial proceedings. See generally Chicago Tribune Co. v.
Bridgestone/Firestone, Inc., 263 F.3d 1304 (11th Cir. 2001). The right applies to all
material submitted “in connection with a substantive motion,” and requires the Court to
balance the interest of the parties in keeping the information confidential with the interest
of the public in making it available. Id. at 1312–13. “The common law right of access
-2-
may be overcome by a showing of good cause, which requires ‘balancing the asserted
right of access against the other party’s interest in keeping the information confidential.’”
Romero v. Drummond Co., 480 F.3d 1234, 1245 (11th Cir. 2007) (quoting Chicago
Tribune, 263 F.3d at 1313). In balancing these interests “courts consider, among other
factors, whether allowing access would impair court functions or harm legitimate privacy
interests, the degree of and likelihood of injury if made public, the reliability of the
information, whether there will be an opportunity to respond to the information, whether
the information concerns public officials or public concerns, and the availability of a less
onerous alternative to sealing the documents.” Id. at 1246. Good cause is established
by showing that disclosure will cause “a clearly defined and serious injury.”
Pansy v.
Borough of Stroudsburg, 23 F.3d 772, 786 (3d Cir. 1994). See also Kamakana v. City
and County of Honlulu, 447 F.3d 1172, 1181 (9th Cir. 2006) (party seeking to seal
dispositive motion papers “must ‘articulate[] compelling reasons supported by specific
factual findings’” (quoting Foltz v. State Farm Mut. Auto. Ins. Co., 331 F.3d 1122, 1135
(9th Cir. 2003) (alterations in original))). The parties have failed to show good cause to
seal their settlement agreement.
The United States Court of Appeals for the Eleventh Circuit has explained that an
FLSA claim can be settled and resolved in two ways. First, an employee may settle and
waive claims under the FLSA if the payment of unpaid wages by the employer to the
employee is supervised by the Secretary of Labor. 29 U.S.C. § 216(c); Lynn's Food
Stores, Inc. v. U.S., 679 F.2d 1350, 1353 (11th Cir. 1982). Second, an employee may
settle and waive claims under the FLSA if the parties present to a district court a
proposed settlement agreement, and the district court enters a judgment approving the
settlement. Lynn's Food Stores, Inc., 679 F.2d at 1353.
-3-
The district court must scrutinize the parties’ settlement agreement and determine
whether it is a "fair and reasonable resolution of a bona fide dispute" of the FLSA issues.
Id. at 1354-55. If the parties’ settlement reflects a reasonable compromise over issues
that are actually in dispute, the Court may approve the settlement “in order to promote the
policy of encouraging settlement in litigation.” Id. at 1354. The nature of this lawsuit
prompts the district court’s review of the settlement agreement rather than an
examination conducted by the Secretary of Labor. My assessment of fairness is guided
by prevailing case law in this Circuit, including Dees v. Hydradry, 706 F. Supp. 2d 1227
(M.D. Fla. 2010) and Fiber Moreno v. Regions Bank, 729 F. Supp. 2d 1346 (M.D. Fla.
2010).
In determining whether a settlement is fair and reasonable, the Court considers the
following factors: “(1) the existence of fraud or collusion behind the settlement; (2) the
complexity, expense, and likely duration of the litigation; (3) the stage of the proceedings
and the amount of discovery completed; (4) the probability of plaintiffs’ success on the
merits; (5) the range of possible recovery; and (6) the opinions of the counsel.” Hamilton
v. Frito-Lay, Inc., No. 6:05-cv-592-Orl-22JGG, 2007 WL 328792, at *2 (M.D. Fla. Jan. 8,
2007). There is a “‘strong presumption’ in favor of finding a settlement fair.” Id. (citing
Cotton v. Hinton, 559 F.2d 1326, 1331 (5th Cir. 1977)).
So that this case does not linger, it is incumbent upon the parties to educate
themselves about the law applicable to FLSA claims and the approval of FLSA settlement
agreements. Then, they need to file a motion for approval in which they provide the
Court all the information it needs to discharge its responsibility. The parties shall file this
motion within the next 21 days.
DONE AND ORDERED in Orlando, Florida, on May 11, 2015.
-4-
Copies to:
All Counsel
Any Unrepresented Parties
-5-
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?