United States District Court, E.D. Washington
ORDER DENYING MOTION FOR SETTLEMENT APPROVAL AND
MOTION TO SEAL
SALVADOR MENDOZA, JR. UNITED STATES DISTRICT JUDGE.
the Court, without oral argument, are the parties' Joint
Motion to Approve Settlement and Dismiss Case with Prejudice,
ECF No. 19, and Joint Motion to File Confidential Settlement
Agreement Under Seal for Purposes of Court Approval of
Settlement, ECF No. 20. The parties seek the Court's
approval of a negotiated settlement resolving Plaintiff's
claims under the Fair Labor Standards Act
(“FLSA”) and request the settlement agreement be
sealed. The parties have, however, failed to put forth a
specific factual basis establishing either that the proposed
settlement is fair and consistent with the FLSA's
purposes or that a compelling need for confidentiality
outweighs the public's interest in transparency in the
judicial process. Accordingly, the Court denies both motions.
The Court cannot approve the proposed settlement
parties first seek judicial approval of a settlement
resolving Plaintiff's FLSA claims. ECF No. 19. Plaintiff
sued Defendant Wal-Mart Associates, Inc.
(“Walmart”) more than a year ago, seeking damages
under the FLSA for Walmart's allegedly willful failure to
compensate her for hours worked, as well as for breach of
contract. See generally ECF No. 1. After Walmart
filed an answer and the Court held a scheduling conference,
the case remained dormant for nearly ten months. See
ECF Nos. 8, 16. The parties now move for judicial approval of
their negotiated settlement, by which Plaintiff agrees to
dismiss all claims against Walmart with prejudice in exchange
for a sum of $19, 000. See ECF No. 19 at 1-2; ECF
No. 21 at 2-3.
FLSA is intended to protect workers from “substandard
wages and oppressive working hours” by giving employees
a private federal cause of action to recover back wages.
See Lynn's Food Stores, Inc. v. United States,
679 F.2d 1350, 1352 (11th Cir. 1982) (quoting Barrentine
v. Arkansas-Best Freight System, 450 U.S. 728 (1981)).
To ensure the FLSA's objectives are not undermined by the
“often great inequalities in bargaining power between
employers and employees, ” the Court must scrutinize
any proposed settlement of an employee's FLSA claims for
fairness. Id. In doing so, the Court's task is
to determine if the settlement constitutes a “fair and
reasonable resolution of a bona fide dispute over
FLSA provisions.” Id. at 1355. Although the
standards against which the Court evaluates a proposed
settlement have not been clearly announced in the Ninth
Circuit, two aspects of the analysis are clear.
before approving a proposed settlement, the Court must
determine whether a bona fide dispute in fact
exists-that is, whether the parties genuinely contest
“the existence and extent of” the Defendant's
FLSA liability. Ambrosino v. Home Depot U.S.A, Inc.,
No. 11CV1319 L MDD, 2014 WL 1671489, at *1 (S.D. Cal. Apr.
28, 2014). To do so, the parties must provide the Court with
a fundamental understanding of the issues in the case. As one
district court explained,
The parties' motion (or presentation at a hearing) must
describe the nature of the dispute (for example, a
disagreement over coverage, exemption, or computation of
hours worked or rate of pay) resolved by the compromise.
Parties wishing to compromise a coverage or exemption issue
must describe the employer's business and the type of
work performed by the employee. The employer should
articulate the reasons for disputing the employee's right
to a minimum wage or overtime, and the employee must
articulate the reasons justifying his entitlement to the
disputed wages. If the parties dispute the computation of
wages owed, the parties must provide each party's
estimate of the number of hours worked and the applicable
wage. In any circumstance, the district court must ensure the
bona fides of the dispute; implementation of the
FLSA is frustrated if an employer can extract a
disproportionate discount on FLSA wages in exchange for an
attenuated defense to payment.
Dees v. Hydradry, Inc., 706 F.Supp.2d 1227, 1241-42
(M.D. Fla. 2010).
the Court is satisfied that the parties intend by the
proposed settlement to resolve a genuine dispute regarding
the Defendant's liability, it proceeds to determine if
the proposed settlement is fair and reasonable.
Lynn's Food Stores, Inc., 679 F.3d at
1355. “In reviewing a private FLSA settlement, the
court's obligation is not to act as caretaker but as
gatekeeper; it must ensure that private FLSA settlements are
appropriate given the FLSA's purposes and that such
settlements do not undermine the Act's purposes.”
Goudie v. Cable Commc'ns, Inc., No. CV
08-507-AC, 2009 WL 88336, at *1 (D. Or. Jan. 12, 2009).
Courts adopt a “totality of the circumstances”
approach by which they consider, among other relevant
(1) [T]he plaintiff's range of possible recovery; (2) the
stage of proceedings and amount of discovery completed; (3)
the seriousness of the litigation risks faced by the parties;
(4) the scope of any release provision in the settlement
agreement; (5) the experience and views of counsel and the
opinion of participating plaintiffs; and (6) the possibility
of fraud or collusion.
Selk v. Pioneers Mem'l Healthcare Dist., 159
F.Supp.3d 1164, 1173 (S.D. Cal. 2016) (collecting cases).
Ultimately, the Court may only approve a settlement which has
the “overall effect  to vindicate, rather than
frustrate, the purposes of the FLSA.” Id.
Court cannot approve the parties' proposed settlement on
the record before it. The parties contend that “[b]ased
on the contested nature of this litigation and the quality of
the settlement, this Court should conclude that this
Agreement is a reasonable resolution of a bona fide
dispute.” ECF No. 19 at 2. This threadbare recital is
insufficient. See Ambrosino, 2014 WL 1671489, at *2
(“The parties claims are conclusory, and not supported
by any evidence or analysis.”).
begin, the Court cannot determine whether the proposed
settlement will resolve a bona fide dispute over
Defendant's FLSA liability. See Ambrosino, 2014
WL 1671489 at *1. More basically, the Court cannot even
adequately discern the nature of the dispute itself-the
parties' motion does no more than declare that
Plaintiff's claims are premised on the FLSA and that
Defendant “disputes [her] claims and contends that
[she] was fully compensated for all work performed.”
ECF No. 19 at 1. This perfunctory statement of the issues
fails to sketch even the basics of the parties'
contentions or the extent of Defendant's potential
liability. See Dees, 706 F.Supp.2d at 1241-42.
Without more, the Court cannot tell whether a genuine dispute
exists, and therefore cannot approve the proposed settlement.
Lynn's Food Stores, Inc., 679 F.3d at 1355.
the Court could advance to evaluating the settlement's
overall fairness, the parties' motion is also inadequate
in that respect. The parties appear to contend the Court may
approve their agreement simply by examining “the
quality of the settlement.” Id. But they
provide the Court with nothing by which to assess that
asserted quality. The Court can discern only the proposed
settlement amount- $19, 000-and ancillary, boilerplate
settlement terms such as a general release of Plaintiff's
claims, confidentiality provisions, etc. See ECF No.
21. The settlement agreement is not self-evidently fair. And
the parties' motion for settlement approval is silent as
to Plaintiff's range of possible recovery, the risks she
would face at trial, the scope of discovery to this point and