Baker v. Dolgencorp, Inc.

818 F. Supp. 2d 940, 2011 U.S. Dist. LEXIS 5208, 2011 WL 166257
CourtDistrict Court, E.D. Virginia
DecidedJanuary 19, 2011
DocketCivil Action No. 2:10cv199
StatusPublished
Cited by7 cases

This text of 818 F. Supp. 2d 940 (Baker v. Dolgencorp, Inc.) is published on Counsel Stack Legal Research, covering District Court, E.D. Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Baker v. Dolgencorp, Inc., 818 F. Supp. 2d 940, 2011 U.S. Dist. LEXIS 5208, 2011 WL 166257 (E.D. Va. 2011).

Opinion

ORDER AND OPINION

HENRY COKE MORGAN, JR., Senior District Judge.

This matter comes before the Court on the Parties’ Joint Motion to Seal Settlement Agreements. Doc. 36. For the reasons explained herein, the Court DENIES the motion to seal.

I. FACTUAL AND PROCEDURAL BACKGROUND

The instant case arises out of a claim for overtime compensation that Plaintiffs allege is due under the federal Fair Labor Standards Act, 29 U.S.C. §§ 201 et seq. (“FLSA”). Originally, 2,400 plaintiffs joined in a collective action lawsuit against Defendant Dolgencorp, Inc. (“Dolgencorp” or “Dollar General”) in the Northern District of Alabama. The case was later decertified, however, and the individual cases were severed. Ultimately, over 1,600 lawsuits were transferred to various district courts spanning the country. Eleven (11) plaintiffs were transferred to this division of this Court, while approximately 796 other cases remain pending in thirty-seven (37) federal districts.

The eleven (11) plaintiffs brought to this division eventually reached a settlement with Dolgencorp. Because'it is well established that the settlement of an employee’s FLSA action must be approved by a federal court through “a stipulated judgment” after the court “scrutinizes] the settlement for fairness,” Lynn’s Food Stores, Inc. v. United States, 679 F.2d 1350, 1353 (11th Cir.1982), Plaintiffs and Dolgencorp submitted a Joint Motion for [942]*942Order Approving Individual Settlements. See Doc. 29. As both parties note, in that submission, the parties “did not specifically file a motion to seal the settlement agreements.” Doc. 36 at 2. The parties did, however, entitle their motion a “Joint Motion for Order Approving Individual Settlements” without attaching any of the settlement agreements.1 Doc. 29 at 8. Obviously, the Court could not scrutinize the settlement for fairness without examining the actual agreements; therefore, the Court requested the settlements.

If employees and employers in an FLSA action attempt to keep settlement documents under seal, this Circuit’s precedent requires a district court to first give the public both (1) notice and a (2) reasonable opportunity to challenge any decision to keep such an agreement confidential. See In re Knight Publ’g Co., 743 F.2d 231, 234-35 (4th Cir.1984) (holding that the district court erred in closing the courtroom and sealing courtroom documents in a criminal case without first giving the public notice and an opportunity to be heard); Stone v. Univ. of Maryland Med. Sys. Corp., 855 F.2d 178, 181 (4th Cir.1988) (extending application of the Knight requirements to civil cases); Boone v. City of Suffolk, Va., 79 F.Supp.2d 603, 609 (E.D.Va.1999) (applying the Knight requirements when parties moved to file FLSA settlements under seal). For that reason, the Court scheduled a public hearing on October 27, 2010 regarding both the approval and potential sealing of the settlement agreements. The Court provided reasonable notice of its intention to hold such a hearing.2

No member of the public or press appeared at the hearing. After scrutinizing the individual agreements, the Court found the settlements to be fair and reasonable under the provisions of the FLSA. See Doc. 34 at 3 (Order Approving Settlement for Fairness). The Court did not permanently seal the settlement documents, though, and ordered counsel for Dolgencorp to brief the issue of sealing the settlements by November 26, 2010.3 Id. Two (2) days after the public hearing, Timothy F. McGlone (“McGlone”), an interested citizen, filed a memorandum opposing any motion to seal the settlement documents. See Doc. 31. Dolgencorp responded to McGlone on November 8, 2010. Doc. 33. On November 24, 2010, pursuant to the Court’s order, Dolgencorp submitted a Joint Motion to Seal. Doc. 36.

II. DISCUSSION

Parties are typically permitted, and often encouraged, to reach private settle-[943]*943merits. In many cases, private or confidential settlements provide parties with incentives to reach amicable resolutions, especially where one party fears that publicity of a settlement could potentially encourage additional litigation. Courts do not normally play a role in confidential settlements, largely because they are purely private contractual agreements — they are generally not filed with the court and thus do not become part of the public or judicial record. Lastly, courts regularly allow private settlement agreements because they usually promote desirable results and avoid protracted litigation.

Settlement agreements arising under the FLSA, however, are unique. First, they are not exclusively private transactions. See Walton v. United Consumers Club, Inc., 786 F.2d 303, 306 (7th Cir.1986) (“[T]he Fair Labor Standards Act is designed to prevent consenting adults from transacting about minimum wages and overtime pay. Once the Act makes it impossible to agree on the amount of pay, it is necessary to ban private settlements of disputes about pay.”). Second, they receive heightened review because federal courts are charged with the responsibility of scrutinizing FLSA settlements for fairness. See Lynn’s Food Stores, Inc., 679 F.2d at 1353.

As this Court previously held in Boone v. City of Suffolk, Va., the common law right of access to judicial records and documents is implicated in a motion to file an FLSA settlement agreement under seal. See 79 F.Supp.2d at 608 (“This right of access has been grounded in the democratic process itself and in a ‘citizen’s desire to keep a watchful eye on the workings of public agencies.’ ”) (quoting Nixon v. Warner Communications, Inc., 435 U.S. 589, 598, 98 S.Ct. 1306, 55 L.Ed.2d 570 (1978)). It is undisputed that an FLSA settlement agreement, submitted to a court for judicial approval, is a judicial record that triggers the common law right of public access. Put simply, the public has an interest in determining whether the Court is properly fulfilling its duties when it approves an FLSA settlement agreement. Boone, 79 F.Supp.2d at 609; see also Bank of Am. Nat’l Trust & Sav. Ass’n v. Hotel Rittenhouse Assocs., 800 F.2d 339, 344 (3d Cir.1986) (recognizing that a “court’s approval of a settlement or action on a motion are matters which the public has a right to know about and evaluate”); Stalnaker v. Novar Corp., 293 F.Supp.2d 1260, 1263 (M.D.Ala.2003) (“Absent some compelling reason, the sealing from public scrutiny of FLSA agreements between employees and employers would thwart the public’s independent interest in assuring that employees’ wages are fair and thus do not endanger ‘the national health and well-being.’ ”) (quoting Brooklyn Sav. Bank v. O’Neil, 324 U.S. 697, 706-07, 65 S.Ct. 895, 89 L.Ed. 1296 (1945)).

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Bluebook (online)
818 F. Supp. 2d 940, 2011 U.S. Dist. LEXIS 5208, 2011 WL 166257, Counsel Stack Legal Research, https://law.counselstack.com/opinion/baker-v-dolgencorp-inc-vaed-2011.