United States District Court, N.D. Indiana, Hammond Division
OPINION AND ORDER
E. MARTIN MAGISTRATE JUDGE
matter is before the Court on a Joint Motion to Submit
Confidential Settlement Agreement under Seal [DE 30], filed
by the parties on June 9, 2017. The Court took the motion
under advisement on June 14, 2017 [DE 36], and the parties
filed a Joint Brief in Support of Motion to Seal Confidential
Settlement Agreement [DE 38] on June 21, 2017.
Complaint alleges claims for, among other things, minimum
wage and overtime violations under the Fair Labor Standards
Act (“FLSA”), so any settlement must be approved
by the Court. See 29 U.S.C. § 216(c). The
parties have submitted to the Court their Confidential
General Release and Settlement Agreement (the
“Settlement Agreement”) [DE 35] in hopes of
receiving the required approval, and they now request that
the Court maintain that agreement under seal.
District of Indiana Local Rule 5-3 provides, “The clerk
may not maintain a filing under seal unless authorized to do
so by statute, court rule, or court order.” N.D. Ind.
L.R. 5-3(a). The “decision of whether good cause to
file a document under seal rests solely with the Court,
” Swarthout v. Ryla Teleservices, Inc., No.
4:11-CV-21, 2012 WL 5361756, at *2 (N.D. Ind. Oct. 30, 2012),
which functions as “the primary representative of the
public interest in the judicial process.” Citizens
First Nat.'l Bank of Princeton v. Cincinnati Ins.
Co., 178 F.3d 943, 945 (7th Cir. 1999). The Court
“may not rubber stamp a stipulation” to seal
portions of the record without a finding of good cause.
happens in the federal courts is presumptively open to public
scrutiny.” Hicklin Eng'g, L.C. v. Bartell,
439 F.3d 346, 348 (7th Cir. 2006) (abrogated on other
grounds by Americold Realty Trust v. Conagra Foods, 136
S.Ct. 1012 (2016)). This “strong presumption” in
favor of public access exists both because the public pays
for the courts and court records “often concern issues
in which the public has an interest.” Jessup v.
Luther, 277 F.3d 926, 928 (7th Cir. 2002). “Any
step that withdraws an element of the judicial process from
public view makes the ensuing decision look more like fiat
and requires rigorous justification” by the Court.
Hicklin, 439 F.3d at 348. However, the interest may
be overridden “if there is good cause for sealing part
of the record.” Forst v. Smithkline Beecham
Corp., 602 F.Supp.2d 960, 974 (E.D. Wis. 2009) (citing
Citizens First Nat'l Bank of Princeton v. Cincinnati
Ins. Co., 178 F.3d 943, 944-45 (7th Cir. 1999)).
terms of private settlement agreements are rarely made public
“because without any court action. . . making them
public would not reveal anything about judicial
activity.” Goesel v. Boley Intern. (H.K.)
Ltd., 738 F.3d 831, 834 (7th Cir. 2014). But where a
Court has subject a settlement agreement to approval,
disapproval, or approval with modifications, the terms
“are of public interest, ” and thus subject to
the presumption of disclosure. Id.; Jessup v.
Luther, 277 F.3d at 929 (“The public has an
interest in knowing what terms of settlement a federal judge
would approve.”). The presumption of public access is
especially important in FLSA cases where court approval is
required to prevent from contracting around laws governing
minimum wages and overtime pay. See Walton v. United
Consumers Club, Inc., 786 F.2d 303, 306 (7th Cir. 1986)
(“Courts therefore have refused to enforce wholly
private [FLSA] settlements.”); Metzger v. Auto
Rescue of MKE, LLC, No. 15-CV-967, 2016 WL 7839154
at *(E.D. Wisc. July 11, 2016) (“Court approval of FLSA
settlements. . . is the norm across most circuits, including
the Seventh.”). In such cases, the public interest in
assuring fair wages favors a strong presumption of
disclosure, requiring “an eminently compelling
reason” why sealing of the settlement would be
permissible. Adams v. Walgreen Co., No.
14-CV-1298-JPS, 2015 WL4067752 at *4 (E.D. Wisc. July 2,
2015); see also Stalnaker v. Novar Corp., 293
F.Supp.2d 1260, 1264 (M.D. Alabama 2003) (finding that the
“private-public character” of employee rights
under the FLSA favors a strong presumption of disclosure);
Joo v. Kitchen Table, Inc., 763 F.Supp.2d 643, 647
(S.D.N.Y. 2011) (“Therefore, this Court joins the
overwhelming consensus of district courts that have
considered the issue to hold that an FLSA settlement cannot
be sealed absent some showing that overcomes the presumption
of public access.”) (collecting cases).
presumption that judicial records are open can be overcome
only for good cause, such as maintaining the confidentiality
of trade secrets and documents protected by the
attorney-client privilege, protecting the identities of
confidential informants or of minors, or preserving the
integrity of other pending proceedings. See Jessup v.
Luther, 277 F.3d at 928; compare Goesel, 348
F.3d at 832-833 (the parties' agreement to keep the
settlement amount secret did not justify sealing a
court-approved settlement agreement) with Baxter
Int'l v, Abbott Labs., 297 F.3d 544, 546 (sealing of
FLSA settlement was appropriate where disclosure would
influence multiple other similar claims then being pursued
their brief, the parties offer four arguments that good cause
exists to seal the Settlement Agreement in this matter.
First, they assert that the Settlement Agreement must be
sealed to maintain the confidentiality of Plaintiffs'
non-public financial information, particularly their monetary
interests in retirement plans. But even non-public financial
information becomes public when it “affects the
disposition” of litigation. Huntington Nat'l.
Bank v. Greenwood Place, LP, No. 1:09-c v-1110, 2012 WL
729473 (S.D. Ind. Mar. 6, 2012) (citing In re
Specht, 622 F.3d 697, 701 (7th Cir. 2010.)) Notably, the
Settlement Agreement contains no social security numbers,
dates of birth, financial account numbers, or personal
identification numbers that would require redaction under the
Federal Rule that the parties cite to support their argument.
See Fed. R. Civ. Pro. 5.2(a). The parties have not
demonstrated that revealing the monetary terms of the
Settlement Agreement, including the retirement account
balances, will jeopardize the security of any party's
identity. Nor did they request that the Court redact just the
account balances from the otherwise public Settlement
Agreement, as they might have done if their chief concern lay
in protecting that information.
parties' second argument is that publication of the
Settlement Agreement in this dispute would embarrass
Defendant and cause economic and reputational damage to the
business upon which all of the parties still rely for their
livelihoods. This argument fails for two reasons. First, the
potential for reputational damage is not sufficient cause to
keep a document under seal. See U.S. v. Foster, 564
F.3d 852, 855 (7th Cir. 2009); Huntington Nat'l.
Bank, 2012 WL 729473 at *2 (“Nonetheless,
potential embarrassment is not a good reason for a
taxpayer-funded branch of the government to conceal something
from the public eye.”); see also United Auto Ins.
Co. v. Veluchamy, No. 09 C 5487, 2010 WL 889980 at *1,
n. 1 (N.D. Ill. Mar. 11, 2010) (concluding that parties'
argument that a fact should be sealed “because it may
affect in some way the defendant's standing in the
community or affect his business. . . would be a
non-starter.”) Second, “good cause [for sealing a
document] does not extend to those portions of the records so
relevant to plaintiff's claim that they have been cited
or quoted by the parties or the court in other
documents.” Chapman v. Raemisch, No.
05-C-1254, 2009 WL 425813, at *7 (E.D. Wis. Feb. 20, 2009).
The sensitive allegations in the Complaint are already a
matter of public record, and the parties have identified no
additional information in the Settlement Agreement which
requires special protection on this ground.
parties also argue that the Court should maintain the
confidentiality of the Settlement Agreement because
confidentiality is a material term, and maintaining
confidentiality would promote future settlements and ensure
efficient use of judicial resources. Courts have routinely
rejected this reasoning as applied to agreements that are
subject to court approval, instead weighing the interests of
the public more heavily than the parties' desires to keep
the terms secret. Goesel, 348 F.3d at 835;
Jessup, 277 F.3d 926 at 929.
the parties assert that the publication of the Settlement
Agreement “provides limited value to the public”
because factual issues related to the case remain unresolved.
But, as discussed above, the weight of precedent favors
public disclosure of any court-ordered settlement agreement.
It is not the job of the Court to determine what information
in this Settlement Agreement might be of use to the public;
it is the task of the parties to present “good
cause” to overcome the presumption. This they have not
the Court hereby DENIES the Joint Motion to
Seal Confidential Settlement Agreement [DE 30] and
GIVES LEAVE to the parties to withdraw their
Joint Motion to Approve Confidential General Release and
Settlement Agreement on or before July 14,
2017. If they do not do so, the Court will rule
on the Joint Motion to Approve the Confidential General
Release and Settlement Agreement and will order the Clerk ...