Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_09-cv-02567/USCOURTS-azd-2_09-cv-02567-2/pdf.json

Nature of Suit Code: 442
Nature of Suit: Civil Rights Employment
Cause of Action: 42:2000e Job Discrimination (Employment)

---

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Billy Taylor, 

Plaintiff/Counterdefendant, 

vs.

AFS Technologies, Inc.; Kurien Jacob;

Walter Barandarian; Kimberly Curtis;

Rebecca Barr; and Andi Romano,

Defendants/Counterclaimant.

)

)

)

)

)

)

)

)

)

)

)

)

)

No. CV-09-2567-PHX-DGC

ORDER

Plaintiff brought this employment law action by filing a pro se complaint against

Defendants on December 8, 2009. Dkt. #1. The complaint asserts race discrimination and

retaliation claims under Title VII and 42 U.S.C. § 1981, and a violation of the Fair Labor

Standards Act (“FLSA”). Id. ¶¶ 45-59. The FLSA claim asserted in count three alleges that

Plaintiff was erroneously classified as an exempt employee and is entitled to overtime wages.

Id. at ¶¶ 54-59.

The parties have entered into a confidential settlement agreement with respect to count

three. They have filed a joint motion seeking leave to submit the agreement for in camera

review and requesting approval of the agreement and dismissal of count three with prejudice.

Dkt. #32. The Court will grant leave to submit the settlement agreement for in camera

review and will approve the agreement and dismiss count three on the condition that the

agreement is made part of the public record in this case.

Case 2:09-cv-02567-DGC Document 81 Filed 05/24/10 Page 1 of 5
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 2 -

I. Conditional Approval of the Settlement Agreement.

The FLSA provides that an employee shall receive overtime wages “at a rate not

less than one and one-half times the regular rate at which he is employed.” 29 U.S.C.

§ 207(a)(1). The FLSA further provides that any employer who violates the overtime wage

provision shall be liable to the affected employee in the amount of unpaid overtime wages

and an additional equal amount as liquidated damages. 29 U.S.C. § 216(b).

“FLSA claims may be compromised after the court reviews and approves a settlement

in a private action for back wages under 29 U.S.C. § 216(b).” Prater v. Commerce Equities

Mgmt. Co., No. H-07-2349, 2008 WL 5140045, at *2 (S.D. Tex. Dec. 8, 2008) (citing Lynn’s

Food Stores, Inc. v. U.S. Dep’t of Labor, 679 F.2d 1350, 1353 (11th Cir. 1982)). The court

“may approve a settlement if it reflects a ‘reasonable compromise over issues.’” Hand v.

Dionex Corp., No. CV 06-1318-PHX-JAT, 2007 WL 3383601, at *1 (D. Ariz. Nov. 13,

2007) (quoting Lynn’s Food Stores, 679 F.2d at 1354).

Having reviewed the complaint, the parties’ joint motion, and the terms of the

proposed settlement, the Court finds that the settlement agreement reflects a fair and

reasonable resolution of issues. Defendants have strongly contested liability under the

FLSA. There are genuine disputes as to whether Plaintiff worked overtime and whether he

was an exempt employee. The settlement agreement does not appear to be a product of

collusion between the parties, nor does it appear to be the result of fraud or overreaching on

the part of Defendants. The Court concludes that, once made part of the public record, the

settlement agreement should be approved “as a fair and reasonable compromise of a bona

fide dispute under the FLSA.” Prater, 2008 WL 5140045, at *2; see Hand, 2007 WL

3383601, at *1.

II. The Settlement Agreement Should Be Made Part of the Public Record.

The parties provided the Court with a copy of the settlement agreement at the case

management conference (Dkt. #57), but have not filed it publically or under seal. The

agreement contains a confidentiality provision stating that the agreement and all of its terms

are “strictly confidential” and may not be disclosed by Plaintiff to any other person or entity.

Case 2:09-cv-02567-DGC Document 81 Filed 05/24/10 Page 2 of 5
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 3 -

The Court concludes that before being formally approved, the settlement agreement

must be made part of the record in this case and may not be filed under seal. Two standards

govern requests to seal documents: “compelling reasons” and “good cause.” Pintos v. Pac.

Creditors Ass’n, 565 F.3d 1106, 1115 (9th Cir. 2009), amended, --- F.3d ---, Nos. 04-17485,

04-17558 (9th Cir. May 21, 2010). The “‘compelling reasons’ standard applies to most

judicial records.” Id. In particular, documents attached to dispositive motions are governed

by the compelling reasons standard. See Foltz v. State Farm Mut. Auto Ins. Co., 331 F.3d

1122, 1136 (9th Cir. 2003). This higher standard applies because the resolution of a dispute

“is at the heart of the interest in ensuring the ‘public’s understanding of the judicial process

and of significant public events.’” Kamakana v. City & County of Honolulu, 447 F.3d 1172,

1179 (9th Cir. 2006) (citation omitted).

Because approval of the settlement agreement will be dispositive of the FLSA claim,

the compelling reasons standard set forth in Kamakana applies to that agreement. See White

v. Sabatino, Civ. Nos. 04-00500 ACK/LEK, 05-00025 ACK/LEK, 2007 WL 2750604, at *2

(D. Haw. Sept. 17, 2007) (applying compelling reasons standard to motion to set aside

settlement agreement). “Under the [Kamakana] ‘compelling reasons’ standard, a district

court must weigh ‘relevant factors,’ base its decision ‘on a compelling reason,’ and

‘articulate the factual basis for its ruling, without relying on hypothesis or conjecture.’”

Pintos, 565 F.3d at 1116.

The parties’ motion (Dkt. #32) does not address the compelling reasons standard.

This deficiency is significant given that “there is a strong presumption in favor of keeping

the settlement agreements in FLSA wage-settlement cases unsealed and available for public

view.” Prater, 2008 WL 5140045, at *9; see Stalnaker v. Novar Corp., 293 F. Supp. 2d

1260, 1264 (M.D. Ala. 2003) (“The document at issue here, a settlement agreement entered

as a stipulated judgment, is not only dispositive of the adjudication and thus falls on the end

of the continuum for which the presumption [of openness] is stronger, it is an FLSA wagesettlement agreement between an employee and an employer for [] which the presumption

is strongest.”) (citation omitted). The fact that the parties’ agreement “contains a

Case 2:09-cv-02567-DGC Document 81 Filed 05/24/10 Page 3 of 5
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 4 -

confidentiality provision is an insufficient interest to overcome the presumption that an

approved FLSA settlement agreement is a judicial record, open to the public.” Prater, 2008

WL 5140045, at *10; see Pessoa v. Countrywide Home Loans, Inc., No. 6:06-cv-1419-OrlJGG, 2007 WL 1017577, at *1 (M.D. Fla. Apr. 2, 2007) (“In the case of sealing settlement

agreements that are approved by the court, once the matter is brought to the court for

resolution, it is a public matter. It is immaterial that sealing of the settlement agreement is

an integral part of a negotiated settlement between the parties.”) (citations omitted).

Absent a compelling reason, which the parties have not provided, keeping the

settlement agreement from public scrutiny would “‘thwart the public’s independent interest

in assuring that employee’s wages are fair and thus do not endanger ‘the national health and

well-being.’” Stalnaker, 293 F. Supp. 2d at 1264 (quoting Brooklyn Sav. Bank v. O’Neil, 324

U.S. 697, 706-07 (1945)). The Court will approve the settlement agreement on the condition

that it be made part of the public record in this case. See Idaho Bus. Holdings, LLC v. City

of Tempe, No. CV-06-2137-PHX-FJM, 2007 WL 2390889, at *2 (D. Ariz. Aug. 22, 2007)

(denying joint motion to seal settlement agreement for failure to meet Kamakana’s

compelling reasons standard); Yaklin v. W-H Energy Servs., Inc., No. C-07-422, 2008 WL

4951718, at *1 (S.D. Tex. Nov. 17, 2008) (denying motion to seal settlement agreement

where the parties did not present an “extraordinary reason”); Prater, 2008 WL 5140045,

at *10) (same).

III. Leave to Withdraw from or File an Unsealed Settlement Agreement.

Because confidentiality may be an integral part of the settlement of count three, and

because the Court will not permit the settlement agreement to be filed under seal, the parties

shall have the option of withdrawing from the agreement or moving forward with it and

making it part of the public record. If the parties wish to withdraw from the settlement

agreement and proceed with count three, they shall file a notice to that effect by June 11,

2010. If the parties decide to proceed with the proposed settlement, they shall, by June 11,

2010, file an unsealed settlement agreement and a separate notice requesting formal approval

of the settlement and dismissal of count three.

Case 2:09-cv-02567-DGC Document 81 Filed 05/24/10 Page 4 of 5
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 5 -

IT IS ORDERED:

1. The parties’ joint motion (Dkt. #32) is granted in part as set forth in this

order.

2. The parties shall have until June 11, 2010 to file (a) a notice of withdrawal

from settlement and intent to proceed with count three, or (b) an unsealed

settlement agreement and a separate notice requesting that the Court formally

approve the settlement and dismiss count three with prejudice.

DATED this 24th day of May, 2010.

Case 2:09-cv-02567-DGC Document 81 Filed 05/24/10 Page 5 of 5