Briones v. Sea Breeze Fish Market Inc.

Background

The parties filed a settlement agreement on February 8, 2021, and asked the court to approve it. The court reviewed the agreement and the accompanying request for approval under the standards of Cheeks v. Freeport Pancake House, Inc., which require courts to review certain settlements under the Fair Labor Standards Act (FLSA) for fairness.

Settlement Terms at Issue

Section 6 of the agreement imposed extensive confidentiality obligations. It required the parties to keep confidential the settlement’s existence, terms, amount, and related negotiations, subject to limited exceptions. It also stated that settlement payments could not be discussed with any person.

The agreement further prohibited the parties from disparaging one another and barred discussion or publication of claims, allegations, and underlying facts. It limited plaintiffs’ statements about the settlement to: “The matter has been resolved.”

Court’s Analysis

The court explained that confidentiality provisions preventing plaintiffs from discussing the settlement can conflict with the purposes of the FLSA, including ensuring that workers know about their rights. The court also concluded that the non-disparagement provision was too broad because it lacked an exception allowing truthful statements.

Disposition

The court denied the parties’ request for approval of the settlement agreement. The parties were ordered to file a revised settlement agreement consistent with the order or a joint status report by March 30, 2021. The clerk was directed to close the motion at Docket 65 and reopen the case.