Jane Doe v. Solera Capital LLC

Background

Jane Doe brought claims against Solera Capital LLC and Molly Ashby for employment discrimination, a hostile work environment, retaliation, and alleged violations of the Fair Labor Standards Act (FLSA) and New York Labor Law. The parties submitted two settlement agreements: an FLSA Agreement resolving the wage-and-hour claims and a separate Confidential Agreement resolving the non-wage-and-hour claims. They asked the court to approve the FLSA Agreement and to keep four documents under seal: the FLSA Agreement, the fairness letter submitted with it, the Confidential Agreement, and the parties’ cover letter.

FLSA Settlement Approval

The court explained that, in this federal circuit, parties cannot privately settle FLSA claims with prejudice without approval from the court or the Department of Labor. The court therefore had to determine whether the proposed settlement was fair and reasonable.

The court identified several problems preventing approval:

- The Confidential Agreement’s confidentiality provision broadly prohibited Doe from disclosing the agreement, facts about its negotiation and implementation, allegations concerning discrimination, harassment, and retaliation, and related factual information. The court found that the provision could also restrict Doe from discussing information concerning her wage-and-hour claims. It lacked a carve-out allowing discussion of information related to those claims. - The Confidential Agreement required Doe to say only that she and the company “decided to part ways” if asked about the end of her employment, and to say only that the matter was resolved to the parties’ mutual satisfaction if someone who already knew about the complaint asked about it. The court found that these restrictions could also prevent discussion of wage-and-hour information and the settlement of those claims. - The Confidential Agreement’s non-disparagement provision barred communications that reflected adversely on or impugned the character, honesty, integrity, morality, judgment, or abilities of the defendants or other released parties. The court found that the provision could bar truthful statements about Doe’s wage-and-hour claims and lacked the required exception for truthful statements about her litigation experience. - The parties’ fairness letter and FLSA Agreement did not provide enough information for the court to independently evaluate the settlement amount or the requested attorneys’ fees. Although a fee award equal to one-third of a settlement fund, after costs, is sometimes approved, the court said counsel still had to submit evidence providing a factual basis for the award.

Because of these issues, the court could not determine that the FLSA Agreement was fair and reasonable. It denied the request for approval of the FLSA Agreement without prejudice, meaning the parties could submit revised materials.

Sealing Request

The court applied the presumption that judicial documents should be publicly accessible. It concluded that the FLSA Agreement and fairness letter were judicial documents because they were relevant to the court’s required review of the settlement. The public-access presumption was particularly strong for those documents because public review of FLSA settlements serves the interest of ensuring that employees receive fair wages and allows other workers to learn about potential wage violations. The court found that Doe’s privacy interests and the parties’ general interest in confidential settlement were not enough to justify keeping those two documents sealed.

The court reached a different result for the cover letter and Confidential Agreement. The cover letter played no role in the court’s analysis and therefore was not entitled to the presumption of public access. The Confidential Agreement was a judicial document, but its connection to the FLSA’s public-policy goals was weaker because the agreement required revision before the FLSA settlement could be approved. The court found that the personal information in the Confidential Agreement and the parties’ desire to keep its settlement conditions confidential outweighed the presumption of access.

Disposition

The court granted in part and denied in part the request to keep documents under seal. It directed the clerk to keep the cover letter and Confidential Agreement under seal and to make the fairness letter and FLSA Agreement viewable on the public docket. The court denied without prejudice the request to approve the FLSA Agreement. It allowed the parties either to file revised materials addressing the court’s concerns by February 3, 2021, or to notify the court by that date that they intended to abandon settlement and continue to trial. The court also directed the clerk to terminate the motions.