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PLN Intervenes, Unseals Settlement in CCA Fair Labor Standards Act Case

PLN’s intervention in a federal lawsuit alleging Corrections Corporation of America (CCA) had improperly classified supervisors at two Kentucky prisons as being exempt from overtime provisions of the Fair Labor Standards Act (FLSA) and Kentucky’s Wage and Hour Act resulted in the court unsealing the settlement in the case.

The lawsuit included allegations that CCA had misclassified and wrongfully withheld overtime pay from current and former supervisory employees at the Otter Creek Correctional Center and Marion Adjustment Center, both of which have since closed. The parties reached a settlement agreement on November 21, 2013. In approving the settlement, the district court also granted the parties’ joint motion to seal two exhibits that contained “information concerning the amount that will be paid to each plaintiff if the settlement is approved” and “information pertaining to the plaintiff’s counsel’s attorney fees and costs.”

Prison Legal News moved to intervene on February 4, 2014 for the purpose of unsealing the exhibits related to the settlement. The court found that PLN met the conditions to intervene, as its motion was timely, its challenge to the order sealing the settlement exhibits presented “a question of law or fact in common” with the underlying action, and there was no prejudice to the parties because PLN had challenged a protective order and did not seek to participate in the merits of the case.

Examining the issue of unsealing the exhibits, the court found that “the documents constitute judicial records and are therefore presumptively open to public inspection.” As such, “the party seeking to block public inspection carries the burden of showing that some significantly countervailing interest outweighs the public right of access.”

CCA argued that the settlement was a private resolution and the parties had “relied on the confidentiality of the exhibits in negotiating their settlement.” PLN countered by noting the settlement was a matter of public concern because CCA’s revenue primarily comes from public funds obtained through government contracts.

The district court was not convinced “precisely why confidentiality was so material” to the settlement agreement, concluded that CCA had failed to “overcome the presumption in favor of permitting access” and held the exhibits must be unsealed in an August 12, 2014 order.

Having obtained the settlement exhibits, PLN was able to report that the parties had agreed to a $260,000 settlement. Of that amount, $131,000 was allocated to the plaintiffs’ counsel for attorney fees and costs while the remaining $129,000 was split between the 25 plaintiffs – all current or former CCA employees. Individual payouts ranged from $1,200 to $10,800. PLN was represented in its motion to intervene by ACLU of Kentucky attorney William E. Sharp. See: Johnson v. Corrections Corporation of America, U.S.D.C. (W.D. Ky.), Case No. 3:12-cv-00246-JGH.

This is the second time that PLN successfully intervened in a class-action lawsuit against CCA in order to unseal settlement documents; previously, PLN intervened in a similar FLSA suit against the private prison company in Kansas. [See: PLN, Oct. 2009, p.31].


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Related legal case

Johnson v. Corrections Corporation of America