Are Employment Lawyers Disclosing the Reputational Risks of Litigation to Their Clients?

From Monday's decision by Judge Woods in Hui v. Federal Reserve Bank of N.Y. (S.D.N.Y.):

On April 30, 2025, Plaintiff filed an application to seal this case in its entirety. One distinguishing facet of the American legal system is its commitment to public access to the trial process. This legacy of "open justice" is as old as America itself. Because the plaintiff has not overcome the strong presumption to public access that attaches to judicial documents—including the complaint and the existence of the case itself—the motion to seal the case is DENIED….

Plaintiff sued in September 2024, claiming defendants had fired him based on his being Chinese-American and on his complaining about discrimination. According to the Complaint, his being of Chinese extraction (he came to the U.S. in 1990, at age 14, and has been a "proud United States citizen since 1995") led defendants to suspect him—with no evidence—of "somehow spying and/or acting as an agent for the Chinese government." On April 16, 2025, after some discovery disputes (which led to a judicial decision), the case settled. But on April 30, 2025, Plaintiff sought to seal the case, citing "'severe reputational damage' due to the public access [to case filings], which he asserts has resulted in 'deep personal and family financial difficulty.'"

But the court refused to seal the case:

There is a long-established "general presumption in favor of public access to judicial documents." … The presumption of access is "based on the need for federal courts … to have a measure of accountability and for the public to have confidence in the administration of justice." … [T]he presumption of public access to the information Plaintiff seeks to shield from the public [thus] has extraordinarily substantial weight. Plaintiff is seeking to shield from the public everything about this case—including decisions by the Court….

[As to] the countervailing interests that weigh against public disclosure[,] Plaintiff's privacy and reputational interests do not justify sealing the case in its entirety. Simply put, the harms Plaintiff asserts are no different than the consequences any litigant bringing a public lawsuit in this country faces.

The Court is sympathetic to the employment challenges that public record of an employment-related lawsuit can cause. But if the Court were to hold that Plaintiff's concerns regarding his future employment opportunities necessitated sealing an entire case, then any and all plaintiffs bringing employment discrimination claims could similarly seek to hide their cases from the public eye.

Additionally, Plaintiff took many steps in this litigation, from seeking a right-to-sue notice, filing a complaint, amending his complaint, contesting Defendant's purported motion to dismiss, to engaging in discovery. Plaintiff should have been aware at all stages of this case that the record of the case was public; yet he chose to pursue his claims nonetheless.

Further, because this case has been public for almost nine months, the harm Plaintiff raises has already manifested in a way that sealing cannot remedy. He asserts that his name "appears in public search results and has been indexed by over ten (10) legal case publication websites." Sealing the case now will not delete information stored on third-party websites and databases, and the Court cannot in this action order that others not act on the information already made publicly available….

Plaintiff's sealing request states, "this decision had an unintended and profoundly negative consequence: the lawsuit became publicly accessible and easily searchable online. I was unaware that such personal and sensitive information would be so accessible to anyone by simply searching my name on the Internet." Of course, perhaps the plaintiff's lawyer had indeed warned him at the outset that, once a case is filed, it's public and likely can't then be retroactively sealed. (I've seen a few courts agree to retroactively seal such cases, but that happens rarely, and is likely not consistent with the legal rules related to open access.) Maybe the plaintiff heard the warning, but didn't heed it.

But I wonder: Do plaintiffs' lawyers consistently provide such warnings—warnings that might scare off a potential client? (This may be a matter in many kinds of cases, not just employment cases, but my sense is that the reputational harms can be particularly serious in employment litigation.) I'd love to hear what readers know about that, especially based on their experience either as lawyers or as clients.

Comments

[David Nieporent]

I think you accidentally included extra text in the last paragraph of the blockquote that should've been outside it.

And to answer your question: yes, I always warn my clients about the fact that their suits will be public. (I didn't when I first started doing employment cases almost 20 years ago, and then I would get clients who said, "I googled my name and this suit came up! I don't want that!") And on the flip side, I always warn my business clients about the Streisand Effect when they get mad about what people are saying about them online.

[Mr. Bumble]

Was it as much of an issue 20 years ago?
The growth of the internet with improved search engines and social media have allowed the "neighborhood gossip" to broaden their audience.

[Drewski]

When do you think "Streisand effect" was coined as a term? More or less than 20 years ago?

[Eugene Volokh]

Whoops, fixed, thanks.

[ILK]

Yes, I warn them. The employment context is particularly well suited to early confidential resolution because plaintiffs must go through the EEOC process. Once we're at the litigation phase, the scandalous allegations are normally in the complaint, and so the cat's out of the bag even if you want to settle immediately. But this is also why a number of employers choose to use arbitration agreements. What makes it, at least in my defense-sided mind, particularly unfair is when a plaintiff counsel files a complaint replete with scandalous allegations that they know will then be met by an almost automatically granted motion to compel arbitration, for the sole purpose of trying to put pressure on my clients.

[CommentMonkey]

I'm not sure I agree that the scenario you describe (plaintiff's counsel files complaint with scandalous allegations even though it's likely the case will be sent to arbitration) is "particularly unfair." Certainly if the allegations are false or unreasonably exaggerated, it is unfair to publish them just for the sake of leverage, whether the case is going to arbitration or not. But if the allegations are made in good faith, consistent with Rule 11, it doesn't seem to me the defendant has any legitimate right to keep them out of the public eye.

Most arbitration agreements in the employment context are contracts of adhesion. Employee shows up for day one of a new job and an arbitration agreement is buried in a huge pile of onboarding documents (often along with onerous post-employment non-compete terms). If the employee is even aware of the significance of these agreements, circumstances make it very difficult to hire a lawyer to look at them. What new hire has the leverage to delay the planned start date several weeks to retain a lawyer to help negotiate an arbitration agreement? It seems to me employment-based arbitration agreements generally reside at the outer fringe of what can legitimately be called voluntary contracts.

There are also many cases in which enforcement of an arbitration clause is not automatic. The right to compel arbitration is subject to waiver and other defenses. For example there are plenty of cases in which defendants fail to move to compel arbitration until after discovery has started, waiving the right to arbitrate. So I think prudent plaintiff's lawyers are generally within their rights to file their lawsuits and put the defense to the task of moving to compel arbitration.

[Andrew Dhuey]

With the Recap extension installed on so many browsers, even cases that attract little outside attention have many of the public court filings stored in Courtlistener's archive. As the district judge here observed, the cat isn't going back into that bag.

[Stephen Lathrop]

Google searches have made employment litigation many times more dangerous for plaintiffs than previously. It seems disingenuous to write an opinion which takes no notice of that change, but reference a notion of long-established legal doctrine to support it.