Carlos Alvarado v. New Rams Deli Plus Inc.
- Stewart Aaron
- 1:18-cv-08650
- U.S. District Court · Southern District of New York
- 2
In Alvarado v. New Rams Deli Plus, Judge Aaron denied approval of the proposed settlement without prejudice because its confidentiality clause restricted truthful discussion.
The ruling affected the plaintiffs, the defendants, and the plaintiffs’ attorneys because the proposed settlement could not be approved unless its restriction on truthful public discussion was removed or modified.
What happened
In Juan Carlos Alvarado v. New Rams Deli Plus, Inc., the parties asked the court to approve their proposed settlement agreement.
The agreement required the plaintiffs and their attorneys to keep the settlement’s existence and terms confidential and barred public discussion, including on social media. The court said that restriction conflicted with the purposes of the Fair Labor Standards Act, including helping workers learn about their rights.
Judge Stewart D. Aaron denied the approval request without prejudice. He gave the parties until December 22, 2020, to submit a revised agreement removing the restriction or to notify the court that they would continue the lawsuit.
The detailed version
- Carlos Alvarado v. New Rams Deli Plus Inc. · No. 1:18-cv-08650
- Stewart Aaron
- Dec. 8, 2020
Background
The parties jointly asked the court to approve a proposed Settlement Agreement & Release. The opinion identifies the case as involving the Fair Labor Standards Act, a federal law governing workers’ wages and hours.
Agreement provision at issue
Paragraph 9 required the plaintiffs and their attorneys to treat the agreement’s existence and terms as confidential. It also prohibited them from publishing or publicizing information about the agreement in print or broadcast media or on the internet, including Facebook, Twitter, Instagram, and Snapchat. The agreement had already been filed on the public court docket.
Court’s reasoning
The court relied on decisions holding that a settlement provision preventing plaintiffs from discussing a Fair Labor Standards Act settlement is incompatible with the law’s purposes, including ensuring that workers are aware of their rights. The court therefore required the parties to remove or modify Paragraph 9 before seeking approval again.
Ruling and next steps
Judge Stewart D. Aaron denied the parties’ application to approve the agreement without prejudice to renewal. The parties were ordered to notify the court by December 22, 2020, whether they would file a revised settlement agreement and supporting materials or proceed with litigation. Any revised agreement had to remove provisions that would prevent the plaintiffs from truthfully communicating facts concerning the settlement of the litigation.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.