Court Declines to Adopt “Celebrity Exception” to Public Access to Settlement Agreement in Age Discrimination, Wage Lawsuit Against Busta Rhymes

Celebrities – they’re just like us!

That is one take-away from a recent Eastern District of New York decision, Jones v. Trevor Tahiem Smith, Jr., a/k/a Busta Rhymes et al, 16-cv-2194, 2018 WL 2227990 (E.D.N.Y. May 14, 2018) (M.J. Levy).

There, plaintiff sued Busta Rhymes and Starbus LLC, alleging “that, while employed by defendants as [Busta]’s personal chauffeur, defendants illegally failed to pay him required overtime compensation and subjected him to verbal harassment and discrimination based on his age.” He asserted claims under, e.g., the Fair Labor Standards Act and the New York City Human Rights Law.

The Second Circuit held, in Cheeks v. Freeport Pancake House, 796 F.3d 199 (2d Cir. 2015), that court approval is required for al stipulated dismissals of FLSA actions with prejudice under FRCP 41.

The parties here sought to evade this requirement by stipulating that plaintiff was an “independent contractor” (to which the FLSA would not apply).

The court rejected this attempt:

Having carefully considered the issue, I conclude that I am not empowered to permit the parties to make this sort of end-run around Cheeks. The rights protected by the FLSA (and by judicial review of FLSA settlements) are not merely private ones. In fact, “although employees, through counsel, often voluntarily consent to dismissal of FLSA claims and, in some instances, are resistant to judicial review of settlement, the purposes of [the FLSA] require that it be applied even to those who would decline its protections.” Socias v. Vornado Realty L.P., 297 F.R.D. 38, 40 (E.D.N.Y. 2014) (internal quotation marks and citation omitted). The Second Circuit has long held that “an employer’s self-serving label of workers as independent contractors is not controlling.” Brock v. Superior Care, Inc., 840 F.2d 1054, 1059 (2d Cir. 1988). Instead, courts in this circuit apply the “economic realities” test to determine whether an individual is an employee or an independent contractor for FLSA purposes. See id.; see also Hart v. Rick’s Cabaret Int’l, Inc., 967 F. Supp. 2d 901, 911–12 (S.D.N.Y. 2013). I see no basis, therefore, for the court to credit what the parties have simply decided to label their relationship in this context, particularly given plaintiff’s express reservation of his right to contest this issue if the settlement were not approved.

The potential for abuse by allowing an exception like this to Cheeks review extends far beyond the parties in this case. Disputes about the applicability of the FLSA to particular employees are central to scores of FLSA cases, and the independent contractor exemption has been one of the most fiercely contested issues in FLSA cases for the past few decades. Simply allowing the parties to stipulate that the statute is no longer applicable for settlement purposes would re-open the door to the kind of employer abuses in FLSA settlement negotiations that drove the Second Circuit to clarify the need for settlement review in Cheeks.

Next, the court rejected the parties’ attempts to keep the settlement agreement confidential.

The court noted “the common law right of public access to judicial documents [that] is firmly rooted in our nation’s history” and held that “an agreement settling an FLSA claim that is submitted for court approval is indisputably a document that is relevant to the performance of the judicial function and useful in the judicial process, and thus a judicial document subject to the presumption of access.”

Next, it rejected the parties’ argument that the defendant’s “public persona … as a well known recording artist … is a sufficient interest to overcome the presumption of public access to FLSA settlement agreements,” reasoning that “district courts in this circuit have applied the same body of law regarding the presumption of public access to cases involving other celebrity employers, without giving their notoriety any weight against the presumption of public access.”