Burczyk v. Kemper Corporate Services, Inc. et al

Filing 45

ORDER re DE 44 : For the reasons set forth in the attached Order, the parties' motion for settlement approval, DE 44 , is denied without prejudice to renew. On or before April 4, 2017, the parties are instructed to submit a revised settlement agreement consistent with the instant Order, or, in the alternative, a letter advising the Court that they intend to proceed with litigating this action. Ordered by Magistrate Judge Steven I. Locke on 3/28/2017. (Cea, Christine)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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FRANCIS J. BURCZYK, on behalf of himself
and all others similarly-situated,
-against-

Plaintiff,

ORDER
15-CV-1483 (SIL)

KEMPER CORPORATE SERVICES, INC.
doing business as Merastar Insurance
Company, and JEFFREY FINDLEY in his
individual and professional capacities,
Defendants.
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LOCKE, Magistrate Judge:
Presently before the Court in this wage and hour action brought pursuant to
the Fair Labor Standards Act of 1938 (“FLSA”), 29 U.S.C. § 201 et seq. and the New
York Labor Law (“NYLL”), N.Y. Lab. Law § 190 et seq. is Plaintiff’s Francis J. Burczyk
and opt-in Plaintiffs’ Stephen T. Siragusa, Michael Miranda, and Michael Borgeest
(collectively “Plaintiffs”) joint motion with Defendant Kemper Corporate Services,
Inc. (“Defendant”) seeking an Order approving the parties’ Settlement and Release
Agreement (the “Settlement Agreement”). 1 See Docket Entry (“DE”) [44]. For the
reasons set forth herein, the parties’ joint motion is denied without prejudice to renew
in accordance with the directives set forth in this Order. 2

Although Individual Defendant Jeffrey Findley is not a party to the Settlement Agreement,
the parties have submitted a Stipulation and Order of Dismissal with Prejudice signed by counsel for
all parties. See DE [44].
1

This action has been assigned to this Court for all purposes pursuant to 28 U.S.C. § 636(c).
See Electronic Order dated 2/15/2017.
2

Pursuant to the FLSA, parties cannot enter into a private settlement
agreement and stipulate to dismissal of their case pursuant to Federal Rule of Civil
Procedure 41(a)(1)(A)(ii) without approval of the Court or the United States
Department of Labor. See Cheeks v. Freeport Pancake House, Inc., 796 F.3d 199, 206
(2d Cir. 2015); Panganiban v. Medex Diagnostic & Treatment Ctr., LLC, No. 15-CV2588, 2016 WL 927183, at *1 (E.D.N.Y. Mar. 7, 2016) (“Approval of the district court
or the Department of Labor is required for settlements dismissing FLSA claims with
prejudice.”). Ordinarily, Courts will not approve agreements with provisions that
“bar plaintiffs from openly discussing their experiences litigating . . . wage and hour
case[s] . . .,” as these limitations “run afoul of the purposes of the FLSA and the
public’s independent interest in assuring that employees’ wages are fair.” Lopez v.
Nights of Cabiria, LLC, 96 F. Supp. 3d 170, 178 (S.D.N.Y. 2015) (internal quotation
omitted); see also Coffin v. MRI Enterprises, No. 11-CV-2453, 2015 WL 3930272, at
*1 (E.D.N.Y. Mar. 19, 2015) (finding a confidentiality provision “contrary to wellestablished public policy and imped[ing] one of the goals of the FLSA—to ensure that
all workers are aware of their rights.”) (internal quotation marks omitted).
Upon review, the Court finds that the Settlement Agreement contains an
impermissible non-publication clause. Section 5(a) of the Settlement Agreement
prohibits Plaintiffs from “post[ing] on any social media, website, blog or other form of
Internet activity, or publish[ing] in the press, concerning, the terms of the settlement,
this Agreement, or the outcome of this action.” See Settlement Agreement, DE [44],
§ 5(a).

Although this provision does not operate as a wholesale limitation on

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Plaintiffs’ ability to speak about the case, the Court sees no distinction between
preventing Plaintiffs from talking with their family, friends, and co-workers on the
one hand, and, on the other, with a reporter. Moreover, considering the commonality
of which individuals communicate over the internet, preventing Plaintiffs from
posting “on any social media, website, blog or other form or Internet activity” places
a substantial burden on their ability to openly discuss their experience litigating the
lawsuit and entering into the Settlement Agreement. As such, the Court finds that
the Settlement Agreement is adverse to public policy and declines to approve it as
written. See Lopez v. Poko-St. Ann L.P., 176 F. Supp. 3d 340, 345 (S.D.N.Y. 2016)
(“Prohibiting an FLSA plaintiff from speaking truthfully about his experiences, his
claims, and the resolution of his lawsuit is in strong tension with the remedial
purposes of the FLSA . . . and also undermines the public’s right to know about the
terms of such judicially approved settlements.”) (internal quotation marks omitted).
Accordingly, the parties’ motion is denied without prejudice insofar as it seeks
approval of the Settlement Agreement in its current form. On or before April 4, 2017,
the parties are instructed to submit a revised settlement agreement consistent with
the instant Order, or, in the alternative, a letter advising the Court that they intend
to proceed with litigating this action.
Dated:

Central Islip, New York
March 28, 2017

SO ORDERED.
s/ Steven I. Locke
STEVEN I. LOCKE
United States Magistrate Judge

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