United States District Court, S.D. Indiana, Terre Haute Division
JOSEPH SUTHERLIN, Individually and on behalf of others similarly situated, Plaintiff
PHOENIX CLOSURES, INC., Defendant
L. MILLER, JR. JUDGE
Sutherlin and Phoenix Closures, Inc. have agreed on
resolution of this Fair Labor Standards Act collective
action, and came before the court on June 20 on the
plaintiffs' unopposed motion for approval of their
settlement. Unless the Department of Labor is supervising the
dispute, an FLSA case can't be settled and simply
dismissed; the court's approval is required. See,
e.g., Walton v. United Consumers Club, Inc., 786 F.2d
303, 306 (7th Cir. 1986) (“Courts therefore have
refused to enforce wholly private [FLSA]
settlements.”). Mr. Sutherlin and Phoenix Closures
asked the court to review their settlement in camera
and dismiss the case, if the court approves of the
settlement. In open court at the June 20 hearing, the parties
discussed the settlement's terms, but it was important to
Phoenix Closures to keep the settlement agreement out of the
court file lest it lead other employees to bring their own
claims after not opting into this case.
“in camera review” provision gave the court
pause. Our court of appeals has taken a “strict
position” regarding public access to court documents -
“[a]ny step that withdraws an element of the judicial
process from public view makes the ensuing decision look more
like fiat and requires rigorous justification”.
Swarthout v. Ryla Teleservices, Inc., No.
4:11-CV-21-PRC, 2012 WL 5361756, at *2 (N.D.Ind. Oct. 30,
2012) (quoting Hicklin Eng'g, L.C. v. Bartell,
439 F.3d 346, 348 (7th Cir. 2006)). “Notwithstanding
the parties' agreement, the decision of whether good
cause exists to file a document under seal rests solely with
the Court.” Id. (citing Citizens First
Nat'l Bank v. Cincinnati Ins. Co., 178 F.3d 943, 945
(7th Cir. 1999)). So at the end of the June 20 hearing, the
court directed the parties to submit authority in support of
their assertion that the proposed settlement agreement in
this Fair Labor Standards Act case should not be made a part
of the public record.
response, the plaintiff concedes that there are cases in this
district that have allowed FLSA settlement agreements to
remain confidential, citing e.g., Beachy v.
Reliance Construction, Inc., No. 3:15-CV-184-TLS, 2015
WL 6828864 (Nov. 6. 2015); Roberts v. Apple Sauce,
Inc., No. 3:12-CV-830-TLS, 2014 WL 4804252 (N.D. Ind.
Sep. 25, 2014); Swarthout v. Ryla Teleservices,
Inc., No. 4:11-CV-21-PRC, 2012 WL 5361756 (N.D.Ind. Oct.
30, 2012), and others that have not, e.g., Razon v.
Vyas, No. 2:16-cv-441 RL-JEM, 2017 WL 3503395 (N.D. Ind.
July 6, 2017). But counsel urges the court to follow the
former, and contends that the proposed settlement should
remain confidential because: (1) the statute doesn't
expressly require settlement agreements to be made a part of
the record; (2) the parties haven't moved to file the
agreement under seal; and (3) the agreement needn't be
made a part of the record because the details of the
settlement are available to anyone who wants to order a
transcript of the hearing. For the following reasons, the
court finds that the parties haven't demonstrated good
cause for keeping the proposed FLSA settlement agreement
confidential and denies their request for in camera
review. Magistrate Judge Cherry explained in
Swarthout, that “[g]ood cause may exist [to
file a document under seal] if the documents are sealed in
order to maintain the confidentiality of trade secrets,
privileged information, including documents covered by the
attorney-client privilege, and other non-public financial and
business information, ” and that the parties had shown
good cause to maintain the settlement agreement under seal.
Id. at *2-3. Other decisions from within our circuit
underscore the importance of identifying cognizable cause for
keeping the settlement's terms confidential. Metzger
v. Auto Rescue of MKE LLC, No. 15-CV-967-JPS, 2016 WL
7839154, at *3 (E.D. Wis. July 11, 2016) (finding that
“the parties fail[ed] to overcome the high burden
needed to rebut the presumption of public access and denying
motion to seal FLSA settlement agreement); Perry v.
Nat'l City, No. 05-CV-891-DRH, 2008 WL 427771, *1
(S.D. Ill. Feb. 14, 2008) (denying motion to seal FLSA
settlement agreement because the parties offered no argument
as to how “they would be specifically injured or harmed
by allowing public access).
only justification for confidentiality offered at the hearing
on the motion for approval of the settlement was that Phoenix
Closures didn't want to face another claim from any other
employee. There are few bright line rules in this field, but
the court of appeals has stated clearly that concerns about
“copycat litigation” don't justify sealing an
FLSA settlement agreement. Goesel v. Boley Int'l
(H.K.) Ltd., 738 F.3d 831, 834 (7th Cir. 2013) (denying
motion to seal while recognizing that making settlement
public may invite more suits against a defendant);
Metzger v. Auto Rescue of MKE LLC, 2016 WL 7839154,
at *3 (“defendants' desire to avoid copycat
litigation...insufficient to justify sealing settlement
parties are absolutely correct that this court, per Judge
Springmann, allowed settlement agreements to be filed under
seal in Beachy v. Reliance Construction and
Roberts v. Apple Sauce, Inc. But the confidentiality
issue doesn't appear to have been raised in
Roberts, 2014 WL 4804252, at *2, and Beachy
appears to have been based on a rationale that is no longer
the law in this circuit. The Beachy court explained,
“The Court also finds that the agreement's
confidentiality is a material term in the parties'
Confidential Settlement and Release Agreement, which the
parties would have otherwise executed as a private,
confidential settlement agreement.” Beachy v.
Reliance Construction, 2015 WL 6828864, at *2. As the
law of our circuit is understood today, “[r]equesting
the court to seal a document simply because the parties want
it to be private is insufficient to overcome the presumption
of public access.” Metzger v. Auto Rescue of MKE
LLC, No. 15-CV-967-JPS, 2016 WL 7839154, at *3.
today's circuit law, the court would have no authority to
seal the settlement agreement based on this record. But Mr.
Sutherlin and Phoenix Closures argue that they aren't
trying to seal the agreement or preclude public access; they
just want to make public access a little more difficult, to
reduce the chances of copycat litigation. The agreement's
terms, they argue, were laid out on the record during the
hearing on the motion for approval. Under the approach Mr.
Sutherlin and Phoenix Closures propose, an interested person
would simply have to purchase a transcript of that hearing (a
transcript would cost less than $50), although the agreement
wouldn't be available from the electronic docket.
in this circuit appears to have addressed the permissibility
of such an approach. Judge Lewis Kaplan of the Southern
District of New York has required that settlement agreements
be posted to the public docket, Lopez v. Nights of
Cabiria, LLC, 96 F.Supp.3d 170, 180 (S.D.N.Y. 2015);
Camacho v. Ess-A-Bagel, 2014 WL 6985633, at *3
(S.D.N.Y. Dec. 11, 2014), but of course, his opinions, while
noteworthy and thought-provoking, aren't controlling.
Whether public access can be limited to transcripts rather
than through the electronic docket is a wide-open issue in
our circuit. But it's not an issue for decision today.
transcript of the approval hearing was not as revealing as
counsel recall. No. suggestion is intended that counsel
sought to hide anything from the court; they didn't. But
the focus of the hearing was whether the court should approve
the settlement, which requires a showing of a fair and
reasonable resolution of a bona fide dispute between the
parties to contested litigation. See Butler v. Am. Cable
& Tel. LLC, 2011 WL 4729780, at *9 n.9 (N.D. Ill.
Oct. 6, 2011). The transcript doesn't disclose, for
example, the amount of each plaintiff's recovery, or the
amount or method of calculating the attorney fees. As Judge
Posner, sitting alone as the motions judge in Goesel v.
Boley Int'l, 738 F.3d at 835, explained, the amount
of settlement, including fees and costs, has significant
public value as a starting point for negotiations in future
if public disclosure during proceedings in open court can
serve as a substitute for placing the agreement on the
electronic docket, the proceedings at this hearing
weren't sufficient. While the agreement otherwise meets
the requirements for judicial approval under the FLSA,
neither the parties' desire to keep the proposed
settlement agreement confidential nor the disclosures in open
court satisfy or overcome the preference for public access to
court documents suffice to keep the agreement itself out of
the public record. The court DENIES the request to consider
the agreement in camera. The parties shall have 14
days from the date of this ...