Perlman v. Alfa Development Management LLC

Background

Mary Louise Perlman filed claims under the Fair Labor Standards Act (FLSA), state law, and common law. The court had previously been informed that the parties had reached a settlement in principle and had ordered them to submit the settlement agreement and a joint letter addressing whether the FLSA settlement was fair and reasonable.

The parties submitted a settlement agreement and joint letter stating that a confidentiality provision restricted discussion of the agreement with people who did not need to know its contents.

Court’s ruling

The court denied the request to approve the settlement agreement under seal. The court cited decisions stating that most courts reject confidential FLSA settlement agreements. It also stated that, under its individual rule, it would not retain jurisdiction to enforce a confidential settlement agreement.

The court allowed the parties to divide their settlement into two parts. If they wanted court approval of a settlement resolving Perlman’s FLSA claims, they had to publicly file that agreement and the supporting materials previously required by the court. The parties could resolve Perlman’s non-FLSA claims separately and confidentially without court approval and without the court retaining jurisdiction to enforce that separate agreement. The court stated that it would consider the existence of the non-FLSA claims when evaluating whether the FLSA settlement was reasonable.

Required filing

The court ordered the parties to file the FLSA settlement agreement and supporting documentation by January 5, 2023. If counsel sought attorneys’ fees and expenses, the filing had to include a detailed breakdown of counsel’s time and expenses. Any release also had to be expressly limited to the claims involved in the action.