Wolinsky v. Scholastic Inc.
900 F. Supp. 2d 332
| S.D.N.Y. | 2012Background
- Wolinsky filed FLSA and NYLL claims against Scholastic alleging misclassification as an independent contractor to dodge overtime and benefits.
- Parties settled in principle; the settlement agreement was submitted for court approval as required under the FLSA.
- The Agreement included a confidentiality provision restricting disclosure of its existence and terms.
- The court reviewed the proposed settlement under FLSA fairness standards and the common-law right of access to judicial documents.
- The court found the confidentiality provision incompatible with the presumption of public access and denied approval.
- The court provided two alternatives: file a public, non-confidential revised Agreement with dismissal by stipulation or abandon the settlement and continue litigation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does confidentiality defeat FLSA settlement approval? | Wolinsky argues public access should apply to the Agreement. | Scholastic claims confidentiality is a material term and protects interests from copycat suits. | Confidentiality cannot prevail; public access applies and denial of approval ensues. |
| Should the settlement be approved given fairness factors? | Factors support a fair and reasonable compromise of disputed issues. | No specific contrary position beyond confidentiality concerns. | Court would likely approve absent confidentiality; confidentiality is the controlling defect here. |
| How should attorney’s fees be evaluated in the settlement? | Fees should be subject to lodestar scrutiny with supporting documentation. | Not explicitly stated; argument focuses on reasonableness standards for fees. | Court emphasizes requirement of contemporaneous billing records and lodestar-based analysis for reasonableness. |
| May the case be dismissed under Rule 41(a) without court order if the parties settle? | Settlement could be dismissed by stipulation if approved. | There may be alternative dismissal under Rule 41 without a court order upon confidential agreement. | Court holds that dismissal without court order is not permitted; must be by court order on proper terms. |
Key Cases Cited
- Lynn's Food Stores, Inc. v. United States, 679 F.2d 1350 (11th Cir.1982) (court may scrutinize settlements for fairness when private actions bring back wages)
- Dees v. Hydradry, Inc., 706 F. Supp. 2d 1227 (M.D. Fla. 2010) (factors for fairness; confidentiality concerns in FLSA settlements)
- Gambale v. Deutsche Bank AG, 377 F.3d 133 (2d Cir.2004) (limits of confidentiality in settlement disclosures; context differs for FLSA)
- Joo v. Kitchen Table, Inc., 763 F. Supp. 2d 643 (S.D.N.Y.2011) (presumption of public access to FLSA settlement records when filed and approved)
- Bou zzi v. F & J Pine Rest., 841 F. Supp. 2d 635 (E.D.N.Y.2012) (public access to unredacted settlement figures in FLSA cases)
- 954 F. Supp. 110, Cisek v. Nat’l Surface Cleaning, Inc. (S.D.N.Y. 1997) (fee reasonableness considerations in settlement contexts)