In a decision from the Southern District of New York, District Judge Jesse Furman denied the parties’ request to approve their proposed settlement of a Fair Labor Standards Act (“FLSA”) case. In August of 2011, Sarah Wolinsky filed a lawsuit against Scholastic alleging that it improperly classified her as an independent contractor and failed to pay her overtime. In May 2012, the parties agreed to settle Wolinsky’s claims and submitted their settlement agreement to the court for approval (an individual cannot waive an FLSA claim unless the settlement is approved by a court or supervised by the U.S. Department of Labor).
Judge Furman approved all of the aspects of the parties’ settlement agreement except one – the confidentiality provision which prohibited Wolinsky from disclosing, discussing, or otherwise publishing the existence or terms of the settlement agreement. The court concluded that the common law right of access to judicial documents and the strong presumption of public access to court-approved FLSA settlement agreements required the agreement to be made public. The court also declined Scholastic’s request to redact the amount of the settlement from the copy of the agreement filed with the court.
This case demonstrates that federal courts may refuse to approve FLSA settlements that contain confidentiality provisions. In a recent decision from the District of New Jersey, Judge Jose Linares declined to approve an FLSA settlement agreement for similar reasons. Employers should carefully consider the potential for public disclosure of an agreement when deciding whether to settle an FLSA lawsuit.