Court Rejects Sealing Settlement for Discharged Employees Who Claimed They Were Fired for Joining Earlier Suit
It is all too common when a corporate defendant settles a case a great deal of effort is made to preclude the public from knowing what happened. In some instances valid concerns about trade secrets or competitive advantages justify sealing settlements. However, all too often large corporations seek to conceal their misconduct that leads to settlements from public scrutiny.
Recently United States District Court Judge Richard Seeborg was presented with a motion to seal a settlement that was reached by four individuals with their former employer where the former employees alleged they were terminated in retaliation for their participation in earlier litigation. (Duran vs The Hershey Company USCT Case No. 14cv-01184 RS). Denying the company’s request, Judge Seeborg analyzed and rejected each of the reasons the company gave to keep the information secret, stating: “While Hershey’s renewed motion satisfies the procedural requirements of Local Rule 79-5, it fails to articulate a substantive basis sufficient to justify sealing the settlement documents in this case.”
Judge Seeborg wrote:
“This action, however, cannot be viewed in isolation: it must be seen through the lens of the collective action litigation which preceded it. Plaintiffs allege that they were terminated from employment as punishment for their participation in lawsuits which involved hundreds of plaintiffs and challenged companywide policies. Campanelli, et al. v. The Hershey Co., 765 F.Supp.2d 1185, 1198 (N.D. Cal. 2011) (granting summary judgment to plaintiffs); Zulewski, et al. v. The Hershey Co., 11-cv-05117-KAW, Dkt. No. 263 (N.D. Cal. Aug. 16, 2013) (order approving collective action settlement). This type of alleged misconduct would, if true, deeply undermine the “private-public” rights established by the FLSA. If the public has a significant interest in learning about the resolution of wage and hour litigation—and courts have almost uniformly found that it does—it must also have a significant interest in the settlement of retaliation claims stemming from such litigation.”
All too often defendants conceal activities resulting in settlements through the use of Confidentiality agreements. As a result, actions giving rise to litigation often go unreported and public access to information is not available. Judge Seeborg’s decision protects public access.
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