Galindo Garcia v. John Doe Corp.
- Andrew Carter
- 1:18-cv-06165
- U.S. District Court · Southern District of New York
- 2
In Galindo Garcia v. John Doe Corp., Judge Carter denied settlement approval because its confidentiality clause barred discussion of the payment.
Galindo Garcia and the defendants who submitted the proposed settlement agreement.
What happened
In Galindo Garcia v. John Doe Corp., the parties submitted a settlement agreement and asked the court to approve it. The court reviewed the agreement and a fairness request under the Fair Labor Standards Act.
The agreement said that the claimants and the company could not discuss the money received in settlement with anyone, whether in writing, orally, or electronically. The court explained that this restriction conflicted with the law’s purpose of helping workers know their rights.
Judge Andrew L. Carter, Jr. denied the parties’ request to approve the settlement. He ordered them either to file a revised agreement consistent with the order or to file a joint status report by December 15, 2020.
The detailed version
- Galindo Garcia v. John Doe Corp. · No. 1:18-cv-06165
- Andrew Carter
- Dec. 1, 2020
Background
The court received a settlement agreement filed by the parties on November 30, 2020, along with a motion asking the court to determine whether the agreement was fair. The court reviewed the proposed settlement as required in Fair Labor Standards Act cases under Cheeks v. Freeport Pancake House, Inc.
Settlement Provision at Issue
Section 10 of the agreement, titled “Cooperation,” stated that the claimants and the company agreed that the monetary sums received in settlement would remain confidential and could not be discussed with any person in writing, orally, or electronically. The court relied on decisions from the Southern District of New York holding that a provision preventing a plaintiff from discussing a settlement is incompatible with the Fair Labor Standards Act’s purpose of ensuring that workers are aware of their rights.
Ruling
The court denied the parties’ request for approval of the settlement agreement because of the confidentiality provision. The court ordered the parties to file either a revised settlement agreement consistent with the order or a joint status report by December 15, 2020. The order did not decide the underlying claims on their merits.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.