18th Annual Workplace Class Action Report - 2022 Edition

294 Annual Workplace Class Action Litigation Report: 2022 Edition In Re Jimmy John ’ s Overtime Litigation, Case Nos. 14-CV-5509, 15-CV-1681 & 15-CV-6010 (N.D. Ill. March 9, 2021). Plaintiffs, a group of assistant store managers, brought multiple collective actions against their franchise employers, as well as the corporate franchisor, alleging that they were misclassified as exempt employees resulting in overtime violations pursuant to the FLSA. Plaintiffs asserted that the franchisor was liable for any wage-related violations committed by the franchisees because the franchisor was a joint employer of the assistant managers due to its control over the franchisees. After the actions were consolidated, the parties ultimately settled the matters and the Court granted preliminary settlement approval. Rather than pay money to workers employers by the franchisees, the franchisor agreed to fund settlement shares for them in gift cards for sandwiches. The Court found that the settlement was the result of arms-length negotiations between experienced attorneys familiar with FLSA collective action litigation who adequately represented the proposed members of the various collective actions. The Court also determined that the proposed settlement agreement would provide adequate relief to the members of the collective actions considering the costs, risks, and delay associated with trial and appeal, and considering the effectiveness of the proposed settlement distribution payments to members. The Court approved the settlement administrator and the notice to collective action members and set a schedule for a fairness hearing following the notice distribution. For these reasons, the Court granted preliminary settlement approval. Johnson, et al. v. City Of Philadelphia, 2021 U.S. Dist. LEXIS 71020 (E.D. Penn. April 13, 2021). Plaintiffs, a group of correctional officers, filed a collective action alleging Defendant failed to pay overtime compensation in violation of the FLSA. The parties ultimately settled the matter and filed a motion for preliminary settlement approval. The Court granted the motion. The Court opined that the settlement agreement met all the requirements for settlement approval. First, the Court noted that the parties had a bona fide dispute, given both the factual and legal issues in the matter. Id . at *11. Plaintiffs contended that Defendant knowingly and unreasonably violated the FLSA, and Defendant argued that it had valid defenses, as it acted in good faith and made overtime payments as soon as it became aware that they were owed, and that at least some of the unpaid overtime payments did not fall within the scope of the FLSA. Id . In addition, the Court ruled that the settlement agreement was fair and reasonable, as litigating the case further would be expensive and complex, and the total possible recovery for the collective action was relatively small. The Court also reasoned that the litigation was in an fairly advanced stage and therefore weighed in favor of finding the settlement agreement reasonable. The Court also determined that the $30,000 was reasonable given the parties’ estimation that the members of the collective action would receive between $40,000 to $50,000 at trial. The Court therefore found that the settlement agreement advanced the purposes of the FLSA, and it granted settlement approval. Kang, et al. v. Wells Fargo Bank, N.A., 2021 U.S. Dist. LEXIS 235254 (N.D. Cal. Dec. 8, 2021). Plaintiffs, a group of home mortgage consultants (“HMCs”), filed a class action alleging that Defendant failed to provide meal breaks and rest periods in violation of the California Labor Code. The parties ultimately settled the matter, and the Court granted preliminary settlement approval. Following notice to class members, Plaintiffs moved for final settlement approval, which the Court granted. The Court determined that Plaintiffs were provided the best notice practicable, and that the notice was adequate. The Court also found that Plaintiffs’ settlement class satisfied the class certification requirements of Rule 23. The Court ruled that given the common nature of the claims and the number of class members, a class action was the superior mechanism for adjudication. As a result, the Court held that the settlement was fair, adequate, and reasonable. The Court noted that Plaintiffs and class counsel devoted significant time and resources to litigating the actions over more than four years, and the efforts of class counsel resulted in Defendant’s agreement to pay an additional $70 million beyond what it already paid in stipulated damages. The Court also determined that the settlement of the class claims was negotiated at arms’ length following a mediation and months of negotiations. The Court opined that class counsel obtained exceptional relief for the class of a non-reversionary settlement in the amount of $95,696,122.35, to be distributed among 4,939 class members. Id . at *33. There was also significant risk to the class that they would not receive any additional payments for their claims. The Court found that the requested $80,000 in administrative expenses, and Plaintiffs’ request for service awards of $10,000 each to the named Plaintiffs were both reasonable. The Court ruled that the PAGA settlement component was also fair and reasonable, as the settlement properly allocated 75% of the PAGA component to the California Labor and Workforce Development Agency and 25% to the employees, and the settlement as a whole provided for individual recoveries in the tens of thousands of dollars, which thereby vindicated the rights of the class