SAN FRANCISCO (CN) - Taking a stand in favor of the public record, a federal judge in California has refused to keep secret a settlement involving social media game maker Zynga. A company's fear of embarrassment or bad publicity is not sufficient to keep court records out of the public eye, the judge said.
The case involved an individual software engineer's claim that Zynga violated federal law on overtime by declaring engineers exempt. A settlement for a single employee could lead to further suits by other workers on the same grounds.
Engineer Andrew Luo and game company Zynga submitted their settlement under seal. But Magistrate Judge Nathanael Cousins did not go along.
"Because the parties have failed to overcome the presumption of public access, the court finds that the parties' settlement should be unsealed," wrote Cousins in a ruling earlier this week.
He said Luo and Zynga argued that their deal remain under seal because it contains a confidentiality provision that said they could not file it in the public record. They also argued that if the deal saw the public light, it might discourage people from settling cases.
"These arguments are not persuasive," he wrote, noting that potential embarrassment and the possibility of more lawsuits are not compelling reasons for secrecy. Luo's accusations against Zynga are already a matter of public record, note the judge who works in of San Francisco's federal court.
"Because the parties here have failed to articulate any facts - for example that the settlement agreement contains trade secrets or competitively sensitive information - that would justify sealing their settlement agreement, the court finds that the settlement agreement should be unsealed," Cousins ruled.
But he gave the two sides a chance to back out of the settlement before it was unsealed.
"If the parties wish to move forward with a settlement, they should be advised that the court is not inclined to approve a settlement of FLSA claims that includes a broad release provision purporting to release claims unrelated to this litigation, absent a particularized showing that such a broad release in this case is 'fair and reasonable,' " said the seven-page ruling.
The parties have two weeks to walk away from their agreement or file an unsealed agreement as a public record.