BRUMLEY v. CAMIN CARGO CONTROL, INC.
Filing
225
OPINION. Signed by Judge Jose L. Linares on 1/30/2012. (nr, )
NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
NATHAN BRUMLEY
Plaintiff
Civil Action Nos.: 08-1798 (JLL)
10-2461 (JLL)
09-6128 (JLL)
V
OPINION
CAMIN CARGO CONTROL, INC., et al.,
Defendants.
SOLOMON GUEVERA,
Plaintiff,
v.
CAMIN CARGO CONTROL, INC., et al.,
Defendants.
IVO JAMES,
Plaintiff,
V
CAMIN CARGO CONTROL, INC., et al.,
Defendants.
This matter comes before this Court by way of Defendants Camin Cargo Control, Inc.,
Carlos Camin and Claudio Camin (“Defendants”)’s Motion to File the Parties’ Settlement
Agreement under Seal pursuant to Local Rule 5.3(c). [Docket Entry No. 223]. The Motion is
unopposed. The Court decides the motion on the papers pursuant to Fed. R. Civ. P. 78, For the
reasons stated herein, Defendants’ Motion is denied.
I. BACKGROUND
The three above-cited actions were brought pursuant to the Fair Labor Standards Act
(“FLSA”), 29 U.S.C.
§ 201 et seq., as collective actions in which a total of 112 plaintiffs, current
and former petroleum inspectors, alleged overtime violations against Defendants Camin Cargo
Control and the above-named officers. (Defs. Mot., Dccl. of Denise Errico Esmerado
(“Esmarado Dccl.”), ¶ 3). Of those plaintiffs, five also alleged retaliation claims pursuant to 29
U.S.C.
§ 2 15(a). (Id.). After extensive litigation in the above-cited actions for over four years,
the Parties negotiated a Settlement Agreement resolving all claims for the 112 Plaintiffs. (ij, ¶
4). Defendants filed the instant motion on January 10, 2012 requesting that this Court seal the
Parties’ Settlement Agreement that will be disclosed to the Court when it is submitted for judicial
approval. [Docket Entry No. 223].
H. LEGAL STANDARD
Local Civil Rule 5.3(c) provides that:
Any motion to seal or otherwise restrict public access shall be available for review by the
public. The motion papers shall describe (a) the nature of the materials or proceedings at
issue, (b) the legitimate private or public interests which warrant the relief sought, (c) the
clearly defined and serous injury that would result if the relief sought is not granted, and
(d) why a less restrictive alternative to the relief sought is not available.
Loc. Civ. R. 5.3(c)(2). In evaluating a motion to seal, a court is required to make findings on the
above-cited factors as well as any other findings required by law. Loc. Civ. R. 5,3(c)(5).
IlL DISCUSSION
A. Nature of Materials at Issue
Defendants argue that, since the Parties have chosen to seek approval of their Settlement
2
Agreement through a court-approved stipulation of settlement rather than a Department of Labor
approved settlement under 29 U.S.C.
§ 216(c), their bargained-for confidentiality in the
settlement would be defeated if they were required to publicly file their settlement for approval.
(Defs. Br., at 2-3). The Court finds that Defendants have sufficiently described the nature of the
materials at issue in both their motion filings and submission of the proposed Settlement
Agreement and Release of Claims reached by the Parties.
$ Esmerado Deel., Ex. A.
That
Agreement details the consideration; settlement amount installments, allocation and taxes;
attorneys’ fees and costs; stipulations for Court approval; and release of claims, confidentiality,
and other terms.
B. Legitimate Private or Public Interests Warranting Relief
Defendants argue that New Jersey has a strong public policy in favor of settlement which
justifies protecting the contents of confidential settlement agreements. (Defs. Br., at 3). The
Court finds that protecting the confidentiality of settlement agreements alone may be a valid
public interest. See, e.g. Borough of Haledon v. Borough of North Haledon, 358 N.J. Super. 289,
305 (App. Div. 2003)(”There is a strong public policy favoring settlement of litigation.”); Leap
Sys. v. Moneytrax, Inc., 638 F.3d 216, 222 (3d Cir. 201 1)(”Circumstances weighing against
confidentiality exist when confidentiality is being sought over information important to public
health and safety.”); Hasbrouk v. BankAmerica Hous. Sews., 187 F.R.D. 453, 458 (N.D.N.Y.
1999)(”protecting the confidentiality of the settlement agreement promotes the important public
policy of encouraging settlement”); Arkema, Inc. v. Asarco, Inc., 2006 U.S. Dist. LEXIS 44106,
at
*
9 (W.D. Wash. June 27, 2006)(”There is a strong public interest in preserving the
confidentiality of settlement or arbitration proceedings.”).
3
C. Clearly Defined and Serious Injury Resulting if Relief is Denied
Defendants state that the revelation to the public of information which has been agreed to
be kept confidential as part of the settlement “will damage the Defendants’ business reputation
and competitive position. Even though[] the settlement is the result of a compromise and should
not be construed as an admission of liability by Defendants, the monetary payment to the
Plaintiffs sends the message that Defendants admit wrongdoing in their business practices.”
(Defs. Br., at 5). Further, Defendants argue that disclosure of the settlement terms does not serve
any legitimate public interest because: (1) the settlement terms are only relevant to the involved
parties; and (2) the terms of the settlement and Settlement Agreement do not contain information
that is important to the public or concern health and safety issues. (ii. at 7-8). Defendants cite
to no case law in support of their contention that private reputational harm is sufficient to seal
judicial records.
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. See. e.g., 29 U.S.C.
§ 202 (stating that the policy of the FLSA is to correct and,
as rapidly as practicable, to eliminate working conditions “detrimental to the maintenance of the
minimum standard of living necessary for health, efficiency, and general well-being of workers
[which] (1) causes commerce and the channels and instrumentalities of commerce to be used to
spread and perpetuate such labor conditions among the workers of several States; (2) burdens
commerce and the free flow of goods in commerce; (3) constitutes an unfair method of
competition in commerce; (4) leads to labor disputes burdening and obstructing commerce and
the free flow of goods in commerce; and (5) interferes with the orderly and fair marketing of
4
goods in commerce.”); Barrentine v. Ark.-Best Freight Sys., Inc., 450 U.S. 728, 739 (1981);
Parker v. NutriSystem. Inc., 620 F.3d 274, 279 (3d Cir. 2010); Lynn’s Food Stores v. United
States Dept. of Labor, 679 F.2d 1350, 1352 (1
th
1
Cir. 1982). An employee has two avenues
through which to resolve his or her claim for back wages pursuant to the FLSA: (1) the Secretary
of Labor may supervise payment to employees of unpaid wages owed to them, and if an
employee accepts such a payment as supervised by the Secretary, he waives his right to bring suit
for both the unpaid wages and for liquidated damages provided that the employer pays in full the
back wages (29 U.S.C.
§
(2) a district court may enter a stipulated judgment in a
216(c));
private action by an employee against an employer, but only after the court has scrutinized the
settlement for fairness (29 U.S.C.
§
216(b)).
The parties have opted for the second avenue in this case, filing a joint motion to file the
settlement agreement under seal. There has been a broad consensus established amongst the
courts that FLSA settlements are unlike ordinary settlements with confidential terms. Two
rationales have been presented in the case law for viewing FLSA settlement agreements as
distinct: (1) the general public interest in the content of documents upon which a court’s decision
is based, including a determination of whether to approve a settlement; and (2) the “publicprivate character” of employee rights under the FLSA, whereby the public has an “independent
interest in assuring that employees wages are fair and thus do not endanger ‘the national health
and well-being.” $ Hens v. Clientlogic Operating Corp., 2010 U.S. Dist. LEXIS 116635, at
6-7 (S.D,N.Y, Nov. 2, 2010); Jessup v. Luther, 277 F.3d 926, 928-930
th
7
(
Cir. 2002); Boone v.
City of Suffolk, VA., 79 F. Supp. 2d 603, 609 (E.D. Va. l999)(unsealing of FLSA settlement
agreement upon finding that it is judicial document to which presumption fo access applies);
5
*
Stalnaker v. Novar Corp., 293 F. Supp. 2d 1260, 1263-64 (M.D. Ala. 2003)(presumption applies
to FLSA cases and court may not rubber stamp a stipulation to seal). There is accordingly a
“strong presumption in favor of keeping settlement agreements in FLSA wage-settlement cases
unsealed and available for public view,” and this Court finds that the settlement agreement
presented here is a judicial document to which the presumption attaches. See, e.g., Dees v.
Hydradry. Inc., 706 F, Supp. 2d 1227, 1244-45 (M.D. Fla. Apr. 19, 2010)(parties’ joint
stipulation for dismissal of FLSA action, which did not include terms of settlement, did not
comport with public’s right to access); Joo v. Kitchen Table, Inc., 763 F. Supp. 2d 643, 645
(S.D.N.Y. Feb. 9, 2011); Nafanzo v. Krishna Krupa. LLC, 2010 U.S. Dist. LEXIS 110139, at
*
2
(S.D. Ala. Oct. 15, 2010)(finding as unreasonable a FLSA agreement containing a confidentiality
provision); Scott v. Memory Company, LLC, 2010 U.S. Dist. LEXIS 119832, at
*
4-7 (M.D. Ala.
201 0)(joint motion to seal settlement agreement denied when based only on a bargained for
confidentiality provision in the settlement); Tabor v. Fox, 2010 U.S. Dist. LEXIS 60839, at
*
4
(E.D.N.C. June 17, 2010)(presumption of access applies to FLSA settlement); Poulin v. General
Dynamics Shared Res.. Inc., 2010 U.S. Dist. LEXIS 47511, at
*
6-7 (W.D. Va. May 5,
2010)(stating that “a confidentiality provision in an FLSA settlement agreement undermines the
purposes of the Act, for the same reasons that compelled the Court to deny the parties’ motion to
seal their Settlement Agreement”); McCaffrey v. Mortgage Sources, Inc., 2010 U.S. Dist. LEXIS
109508, at *2,.3 (D. Kan. Oct. 13, 2010)(”the Court finds that the public’s interest ‘in
understanding disputes that are presented to a public forum for resolution’ and knowing that ‘the
courts are fairly run and judges are honest’
.
.
.
outweighs any interest of the parties in keeping
confidential the amount of settlement”); In re Sepracor Inc. Fair Labor Standards Act (FLSA)
6
Litigation, 2009 U.S. Dist. LEXIS 97791, at
*
4 (D. Ariz, Oct. 8, 2009); Prater v, Commerce
Equities Mgmt. Co., 2008 U.S. Dist. LEXIS 98795, at
*
28 (S.D. Tex. Dec. 8, 2008).’ To rebut
this presumption of public access, neither a confidentiality provision nor an alleged reputational
injury are sufficient. Prater, 2008 U.S. Dist. LEXIS at
*
30 (“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”); Newman v. GMC, 2008 U.S. Dist. LEXIS 105492,
*
8 (D.N.J. Dec. 31, 2008)(an
alleged reputational injury is insufficient to grant a motion to seal). Therefore, on these bases,
the Court denies Defendants’ motion to seal the settlement agreement in this case.
D. Unavailability of Less Restrictive Alternative
Pursuant to Loc. Civ. R. 5.3(c)(2)(d), the movant in a motion to seal must show that no
less restrictive alternative is available for dealing with the confidential matter. Here, Defendant
argues that sealing the settlement agreement “is the least restrictive means to preserve
confidentiality.” (Def. Br., at 9). Since the Court is not satisfied that a sealing order is
appropriate in this matter due to Defendants’ failure to rebut the presumption of open access to
settlement agreements approved by the courts under the FLSA, this factor does not weigh upon
its decision.
IV. CONCLUSION
For the reasons set forth above, Defendants’ Motion to File the Parties’ Settlement
‘Defendants’ citation to Leap Systems. Inc. to support their broader proposition regarding this Court’s
sealing of the FLSA settlement agreement is unavailing as that case did not concern the sealing or confidentiality of a
settlement agreement under the FLSA, but rather concerned a settlement agreement confidential due to private
business information included in the terms of the settlement between a plaintiff insurance licensor and defendants, a
licensee and his new employer.
638 F.3d 216 (3d Cir. 2011).
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Agreement under Seal is DENIED. An appropriate Order accom
panies this Opinion.
DATED: JanuaryJ2Ol2
Linares
States District Judge
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