SOBIECH v. WHIPPERHILL CONSULTING, LLC et al

Filing 34

MEMORANDUM ORDER denying 32 MOTION for Leave to File Settlement Agreement Under Seal for In Camera Review. Signed by Magistrate Judge Cynthia Reed Eddy on 11/3/2015. (bap)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
THOMAS SOBIECH, on behalf of
himself and similarly situated employees,
Plaintiff,
v.
WHIPPERHILL CONSULTING, LLC,
and MATTHEW P. FANTASKEY,
Defendants.

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Civil Action No. 15-667

United States Magistrate Judge
Cynthia Reed Eddy

MEMORANDUM ORDER
The parties in this action have advised the Court that they have settled this FLSA case
and have requested judicial approval of the terms of their settlement agreement. Pending before
the Court is Defendants’ Unopposed Motion to Submit Settlement Agreement under Seal for In
Camera Review. (ECF No. 32). For the reasons that follow, Defendants’ motion is denied.
“[W]hen a federal court is asked to substantively consider the terms of an FLSA
settlement and then approve it, as a general matter that agreement (which is at the heart of the
Court’s judicial activity) is not sealed.” Weismantle v. Jali, 2015 WL 1866190, *1 (W.D.Pa.
Apr. 23, 2015) (collecting cases setting forth this “prevailing, if not overwhelming, trend”). This
is because when a court is asked to place “its judicial imprimatur on the merits and terms of the
settlement,” there is a “strong presumption in favor of public access to the records upon which a
federal court does its decisional duty,” which is only rebutted by a countervailing private interest
that outweighs the public’s interest. Id. at *2 (citing Goesel v. Boley Int’l (H.K.) Ltd., 738 F.3d
831 (7th Cir. 2013); LEAP Sys., Inc. v. MoneyTrax, Inc., 638 F.3d 216, 220 (3d Cir. 2011)).
This case was initiated on May 21, 2015 by Plaintiff Thomas Sobiech, a former
Environmental Inspector of Defendant WhipperHill, when he filed a complaint on behalf of
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himself and similarly situated employees asserting that Defendants violated the FLSA and
Pennsylvania Minimum Wage Act (PMWA) for failing to pay overtime compensation. Two
other former employees, Christian Sobiech and Nicholas Sobiech, have filed Opt-In Consents to
join this action. Also pending before the Court is Plaintiffs’ motion for conditional certification
of the FLSA collective class, which was filed August 18, 2015 (ECF No. 12), however, the
parties have reached a settlement agreement prior to the Court resolving that motion. The parties
have requested that the Court substantively approve the terms of this settlement agreement as fair
and reasonable, but first, Defendants wish to hide the agreement from the public by filing it
under seal.
Defendants recognize that on numerous occasions, judges within this District have denied
the parties’ requests to file FLSA settlement agreements under seal when the parties fail to
identify a private interest that outweighs the strong presumption in favor of the public’s right to
access such agreements. See Weismantle, 2015 WL 1866190 (Hornak, J.); Vargas v. GNC, Inc.,
2015 WL 4155449 (W.D.Pa. Mar. 20, 2015) (McVerry, J.); Mesta v. Citizens Bank, NA, 2015
WL 4039358 (W.D.Pa. Jun. 30, 2015) (Lenihan, J.); Pollock v. Byrider Finance, LLC, 2015 WL
4040400 (W.D. Pa. Jun. 30, 2015) (Lenihan, J.). However, Defendants contend that unlike the
foregoing cases, good cause exists here which justifies keeping the settlement agreement
confidential. Defendants assert that “this is not a simple FLSA action in which the Plaintiffs are
the only party with claims to assert.” (ECF No. 33 at 9). They characterize the facts of this case
as “unique.” (Id.).
They explain that as this case progressed, they believed that they had valid counterclaims against these three (and only) individual Plaintiffs involving tortious interference for their
alleged competitive activities regarding Defendants’ clients. (Id. at 2, 9). Defendants represent

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that in this settlement agreement reached by the parties, Plaintiffs will release their FLSA and
PMWA claims and dismiss this action herein with prejudice in exchange for Defendants
releasing these unasserted claims for tortious interference and paying Plaintiffs certain monetary
compensation, inclusive of legal fees and costs. (Id.). According to Defendants, “[t]he details of
these claims for tortious interference necessarily implicate WhipperHill’s trade secrets, including
the identify [sic] of WhipperHill’s clients and terms of the contracts between Defendants and its
clients, such as the rates charged by Defendants for environmental inspection services.” (Id. at
9). See Goesel, 738 F.3d at 833 (the strong presumption of public access can be rebutted if a
litigant’s trade secrets would be disclosed); Mesta, 2015 WL 4039358, *1 (same).
To verify whether the parties’ proposed settlement agreement in fact implicates any of
Defendants’ trade secrets, the Court had the parties jointly submit it to Chambers.

After

reviewing it, the Court finds that contrary to Defendants’ assertion, this settlement agreement
does not identify, provide any details, or even remotely implicate any trade secrets. It does not
disclose any of WhipperHill’s clients. It does not disclose any terms of its agreements with its
clients. And it does not disclose the rates that it charges its client for its services. The proposed
settlement agreement is simply bereft of any of these terms. Ironically, Defendants’ motion to
seal and their brief in support thereof disclose far more detail regarding the surrounding
circumstances of these unasserted tortious interference claims than does the agreement itself.
Therefore, Defendants’ purported justification for filing the agreement under seal is
unpersuasive, and they have failed to overcome the strong presumption in favor of public access.
To the extent that Defendants alternatively request to file a redacted version of the
settlement agreement which would omit the amount of money that Defendants have agreed to
pay Plaintiffs to settle the claim, that request is likewise denied. Defendants have provided a list

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of cases where courts have allowed parties in FLSA cases to redact the settlement amount. See,
e.g., Lovett v. Connect America.com, 2015 WL 5334261, *2 (E.D.Pa. Sept. 14, 2015) (allowing
counsel to file the proposed settlement agreement and accompanying paperwork with the
settlement amount redacted, while also submitting the unredacted version to the Court). While
some courts may find this practice acceptable, multiple judges in this District have rejected it.
The undersigned likewise rejects this notion that when a party asks a court to approve its FLSA
settlement agreement as fair and reasonable, the settlement amount may be redacted from public
view when there is no valid reason to do so.
In Mesta, Judge Lenihan dismissed the parties’ concern that revealing the settlement
amount was a valid basis for allowing them to submit it under seal. 2015 WL 4039358, at *2.
Judge Lenihan questioned: “Is this not the exact information that the public is entitled to access
in the settlement of an [FLSA] case? How can the public ascertain whether the court has properly
exercised its authority in approving an FLSA settlement if it does not know the amount of the
settlement?” Id. Similarly, in Weismantle, Judge Hornak dismissed the parties’ desire to hide
their financial business from the public as a valid reason for allowing them to file the agreement
under seal. 2015 WL 1866190, at *1 n. 1, *2. Furthermore, contrary to Defendants’ suggestion,
the fact that the parties here have settled prior to the Court issuing a ruling with regard to the
pending motion for conditional certification does not diminish the public’s right to access. See
Mesta, 2015 WL 4039358, at * 1 (at the time of the decision, no ruling had been made as to class
certification); Weismantle, 2015 WL 1866190, *1 n. 1, *2 (at the time of the decision, there were
no “class” claims, and the proposed agreement was a “one-off” settlement).
In conclusion, Defendants have failed to carry their burden in articulating an acceptable
reason to override the strong presumption in favor of the public’s right to access the documents

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which will ultimately form the basis for the Court’s decision regarding whether to accept their
FLSA settlement agreement as fair and reasonable. Defendants’ purported justification that this
settlement agreement implicates its trade secrets is unfounded – it discloses none. Finally,
Defendants may not alternatively file a version of the settlement agreement which redacts the
settlement amount.
AND NOW, this 3rd day of November, 2015, upon consideration of the Defendants’
arguments with regard to the instant matter, IT IS HEREBY ORDERED THAT Defendants’
Unopposed Motion to File Settlement Agreement under Seal for In Camera Review (ECF No.
32) is DENIED. The Court will immediately destroy all of the documents which Defendants
privately submitted to the Court solely for purposes of ruling on this Motion.

By the Court:
s/ Cynthia Reed Eddy
Cynthia Reed Eddy
United States Magistrate Judge
cc: all registered counsel via CM-ECF

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