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No sealed settlement in restaurant pay case

A restaurant chain’s settlement of servers’ overtime-pay claims will not be sealed, an Alexandria U.S. District Court said earlier this month.

The employer urged confidentiality and the employees acquiesced, according to the court’s opinion in Miles v. Ruby Tuesday Inc., but the parties’ claim that the deal was off if it became public failed to move the court to seal the record.

Seven employees of the Ruby Tuesday restaurant sued under the Fair Labor Standards Act, saying they were required to work off the clock and were deprived of pay for hours above the regular work week. Shortly after discovery began, the parties decided to settle.

They told the court their settlement was conditioned on the terms remaining under seal. Alexandria Senior U.S. District Judge T.S. Ellis III said no to the confidential deal.

Although no one came forward to challenge the request to seal, the parties still did not overcome the common law presumption of a right to access court records of the settlement.

A single court’s decision to seal an overtime-pay settlement may not excite public interest, Ellis said, but aggregating records from other courts’ FLSA settlement approval decisions might reveal significant information about FLSA enforcement nationwide.

The “central premise” behind requiring judicial approval of FLSA settlements is that the parties, left to their own devices, could enter into private agreements that undermine the statute’s purpose, according to the court.

Ellis said he would approve settlement on the merits, but gave the parties a chance to decide whether to allow public disclosure of the settlement terms, or to proceed to a public trial.

Overtime pay claims have been on the rise in recent years, and Virginia’s federal courts have split over secret settlements, with an Abingdon court allowing a settlement to be sealed for two years, and courts in Norfolk and Charlottesville denying motions to seal.
By Deborah Elkins

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