Home » Settlements (Page 3)
Category Archives: Settlements
11th Cir.: Receipt And Signing WH-58 Form And Cashing Of The Employer’s Check Is Sufficient To Effect A Waiver Of Right To Sue Under FLSA
Blackwell v. United Drywall Supply
Plaintiffs were employed by Defendants. In September 2007, they sued Defendants pursuant to the Fair Labor Standards Act (FLSA). Plaintiffs alleged that, from 2002 forward, Defendants intentionally violated the Act by failing to pay them properly for overtime. Plaintiffs further alleged that, in 2007, “as a result of an investigation by the United States Department of Labor involving allegations of the improper payment of overtime compensation to its laborer employees, [United Drywall] made payments to various employees for past due overtime compensation.” Plaintiffs alleged that Defendants retaliated against Williams for his complaints to the Department of Labor regarding overtime violations. And, Plaintiffs alleged that the payments made as part of the Department of Labor supervised settlement were “far lower than what the employees were legally due.” They sought allegedly unpaid overtime compensation for three years before the filing of the complaint and attorney’s fees and expenses pursuant to § 216 of the Act. The Court below granted Defendants’ Motion for Summary Judgment holding that Plaintiffs’ signing of the DOL WH-58 form and cashing of settlement checks was a valid waiver of their FLSA rights. On appeal, the Eleventh Circuit affirmed.
Framing the issue before it, the Court explained, “Defendants moved for summary judgment, arguing, among other things: (1) that Plaintiffs had waived their right to sue under the Act when they cashed checks from United Drywall pursuant to the 2007 settlement between the parties supervised by the Department of Labor, and (2) that Plaintiffs are exempt employees under the Motor Carrier Exemption in the Act (“the Exemption”) and therefore are not entitled to back pay pursuant to the Act. Plaintiffs opposed the motion, arguing that there were genuine issues of fact regarding whether they had knowingly waived their rights to sue and whether the Exemption applied. After considering arguments and evidence from both sides, the district court granted Defendants’ motion for summary judgment. The court held that, because Plaintiffs had received Department of Labor form WH-58 (which contained a statement that if Plaintiffs accepted the back wages provided in conjunction with the form, they would give up their rights to bring suit under the Act) and because Plaintiffs had cashed the checks provided in conjunction with the WH-58 forms, Plaintiffs had waived their rights to sue Defendants for the payments they sought under the Act. The court entered judgment for Defendants. Plaintiffs appeal the judgment.”
Addressing and denying Plaintiffs’ appeal, the Court reasoned, “Plaintiffs argue that the district court erred in finding waiver because Plaintiffs did not knowingly and intentionally waive their rights to sue. They argue that the WH-58 form provided to them by the Department of Labor is ambiguous and did not put them on notice that, by cashing the checks, they would waive their rights to sue for additional back pay. Defendants argue that the district court correctly found waiver and that the judgment can be supported on the additional ground that the Exemption applies to bar Plaintiffs’ claims. In their reply brief, Plaintiffs respond that affirmance of the judgment based on the Exemption would not be proper because the Exemption is not applicable to Defendants’ business as a matter of law or, in the alternative, there are genuine issues of material fact regarding the application of the Exemption.
We affirm the judgment. We find no error in the district court’s holding “that receipt of a WH-58 form and cashing of the employer’s check is sufficient to effect a waiver of the right to sue under the FLSA.” There is no dispute that Plaintiffs received WH-58 forms in connection with the checks written by United Drywall and given to Plaintiffs by the Department of Labor as part of the supervised settlement between United Drywall and its employees. Those forms are receipts for payment of “unpaid wages, employment benefits, or other compensation due … for the period up to and including 05/20/2007 … under … The Fair Labor Standards Act….” They contain this language:
NOTICE TO EMPLOYEE UNDER THE FAIR LABOR STANDARDS ACT-Your acceptance of back wages due under the Fair Labor Standards Act means that you have given up any right you may have to bring suit for back wages under Section 16(b) of that Act. ( Id.)
The WH-58 forms then proceed to describe the types of recovery and statutes of limitations under § 16(b) of the Act. We agree with the district court that these forms unambiguously informed Plaintiffs that, if they cashed the checks provided with the forms, they would be waiving their rights to sue for back pay. And, there is no dispute that Plaintiffs cashed the checks. Therefore, the district court correctly determined that ‘both Plaintiffs have waived their right to sue. Affirming the judgment on waiver grounds, we do not address the parties’ arguments regarding application of the Exemption.’ “
Cintas Corp. To Pay $6.5 Million To Settle Case That Alleged It Violated L.A. ‘Living Wage’ Ordinance, L.A. Times Reports
The L.A. Times is reporting that industrial laundry company, Cintas Corp., has settled a longstanding lawsuit that alleged it violated a Los Angeles municipal ordinance pertaining to ‘living wages.’
According to the report, Cintas “[a] major firm providing laundry services to business and governments nationwide has agreed to pay $6.5 million to settle a lawsuit brought by hundreds of Southern California laundry workers who alleged the company violated Los Angeles’ “living wage” laws.
Cintas Corp., which operates industrial laundries and other facilities in the United States and Canada, denied any wrongdoing but agreed to settle the 5 -year-old case “in order to avoid the additional expense and distraction of ongoing litigation,” the Cincinnati-based company said in a statement.
Labor leaders who helped file the complaint said it was believed to be the largest monetary amount ever paid for alleged violations of living wage ordinances, which set salary and benefit standards for contractors and other firms engaged in government business.
The settlement provides $3.3 million in back wages and interest for more than 500 laundry employees who worked at Cintas facilities in Ontario, Pico Rivera and Whittier, according to Workers United/Service Employees International Union, which assisted in the lawsuit. The remainder of the $6.5 million goes to penalties and legal fees arising from the case.”
A copy of the entire story can be obtained from the L.A. Times website.
The Quad City Times is reporting that, “[a] class-action lawsuit filed eight years ago in Clinton County accusing Wal-Mart of intimidating employees into working overtime without pay has been settled, with the company agreeing to pay $11 million. The lawsuit was filed in June 2001 by Sally Mussmann and Taylor Vogue, two former employees of the Wal-Mart store in Clinton.”
The article stated that, “[t]he lawsuit alleged that Wal-Mart gave its employees tasks that were impossible to complete during their scheduled work hours, then intimidated them into working extra hours without pay to complete their assignments.”
To read the entire article go to the Quad City Times website.
The Central Valley Business Times is reporting that Lowe’s has settled an overtime class action accusing the home improvement retailer of forcing thousands of employees to work “off the clock.”
“Home improvement retailer Lowe’s Companies Inc. (NYSE: LOW) has agreed to pay $29.5 million to settle a class action lawsuit that argued it had required “thousands” of hourly workers to toil “off the clock.”
Two former Lowe’s employees alleged that they and thousands of other hourly Lowe’s workers were required to work before and after their normal shifts but were not paid for the extra work…
Earlier, Lowe’s denied all of the claims raised in the lawsuit. The company, contacted Wednesday for comment, said it could not comment directly on the settlement but a spokeswoman said the company believes it is in compliance with all laws and regulations.
The settlement was approved Tuesday by the Los Angeles Superior Court, shortly before the case was to finally go to trial.”
To read the entire story go the the Central Valley Business Times’ website.
The New York Times is reporting that, “[a] New York carwash chain agreed to pay $3.4 million in back wages and liquidated damages to 1,187 current and former employees to resolve part of a lawsuit brought by the United States Department of Labor in August 2005.
The suit was filed against the chain, the Lage Management Corporation, based in Pelham Manor, N.Y., after an investigation found that its carwashes were not paying employees minimum wage, not paying them for overtime and not keeping adequate employment records. In three previous settlements in the case, more than 200 employees had already received more than $1.3 million in back wages and damages.”
To read the full article go to the New York Times website.
E.D.Cal.: Settlement Of Rule 23 And 216(b) Class Hybrid Action Requires Simultaneous Notice; Opt-out Notice Alone Insufficient To Bind Class On FLSA Claims
Wright v. Linkus Enterprises, Inc.
Plaintiffs filed this action against Defendant for violation of various state and federal labor laws. Before the Court was Plaintiffs’ Unopposed Motion for Preliminary Approval of Settlement of their hybrid action, which consisted of both a Federal Rule of Civil Procedure 23(b)(3) class action and a Federal Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 216(b), collective action. Though the Motion was essentially unopposed, the parties did disagree as to one issue pertaining to release of claims by currently absent parties, regarding notice required to the class members (Defendant proposed an opt-out Rule 23 notice alone). The Court resolved that dispute by ordering that the parties’ existing agreement and forms be modified to provide both “opt-out” procedures as allowed under Rule 23 and “opt-in” procedures as required by the FLSA.
Explaining that opt-in notice as well as opt-out notice must be provided to class members in such a hybrid action, the Court stated, “According to Defendants, the Rule 23 opt-out procedures, under which potential plaintiffs are bound by the terms of the settlement unless they affirmatively opt out, should apply to both the state law claims and to those claims arising under the FLSA. Plaintiffs disagree arguing that, while Rule 23 applies to their state law claims, the FLSA requires potential plaintiffs to opt-in to this action in order to release any claims they may have under the FLSA. The Court agrees with Plaintiffs.
In a collective action brought under the FLSA, “[n]o employee shall be a party plaintiff to any such action unless he gives his consent in writing to become such a party and such consent is filed in the court in which such action is brought.”29 U.S.C. § 216(b). Congress enacted this provision for the purpose of “limiting private FLSA plaintiffs to employees who asserted claims in their own right and freeing employers of the burden of representative actions.” Hoffman-La Roche Inc. v. Sperling, 493 U.S. 165, 173 (1989).
Conversely, a class action brought pursuant to Rule 23(b)(3) mandates notice informing potential plaintiffs that they can avoid being bound by the terms of a settlement or judgment if they so inform the court. SeeFed.R.Civ.P. 23(c)(2)(B)(v). Thus, a plaintiff that does not affirmatively “opt-out” from the class may be bound by the disposition of the case, regardless of whether he received actual notice. Amchem Products, Inc. v. Windsor, 521 U.S. 591, 614-15 (1997).
In Kakani v. Oracle Corp., the Northern District examined the relationship between the two regimes and held that the use of “opt-out” notice would violate the FLSA.2007 WL 1793774, at *7 (N.D. Cal. June 19, 2007). That court stated that it would have been “unconscionable to try to take away the FLSA rights of all workers, whether or not they choose to join in affirmatively.”Id. (emphasis in original).
Defendants’ authority to the contrary is inapposite. First, Defendants cite Hoffman-La Roche Inc. for the proposition that district courts possess discretion over the procedural methods used to join multiple parties in a single case. However, Defendants interpret Hoffman-La Roche too broadly. That case merely established that district courts may authorize notification of potential plaintiffs regarding the opportunity to “opt-in” to a collective action. 493 U.S. at 169. Hoffman La Roche does not stand for the proposition that this Court may substitute Rule 23 “opt-out” notice for the “opt-in” notice expressly required by 29 U.S.C. § 216(b).
Defendants also cite two district court opinions, one in which the court stated without analysis that “opt-out” procedures would be used to settle both FLSA and state law claims, and one in which the federal court simply refused to enjoin a state court from releasing FLSA claims as part of a settlement that utilized “opt-out” notice. Frank v. Eastman Kodak Co., 228 F.R.D. 174, 179 (W.D.N.Y.2005); Dibel v. Jenny Craig, Inc., 2007 WL 2381237, at * 1 (S.D. Cal Aug. 10, 2007). This Court finds neither of these cases persuasive and now holds that “opt-in” procedures must be provided for the release of the instant FLSA claims.
The National Law Journal is reporting that a federal judge in Los Angeles has approved a $39 million preliminary settlement to resolve the multidistrict litigation between Wachovia Corp. and more than 10,000 stock brokers who alleged that they were denied overtime pay and other wages.
“U.S. District Judge David O. Carter also approved a final settlement in which Prudential Financial Inc., whose retail brokerage division was sold to Wachovia in 2003, agreed to pay $11 million to former stock brokers.
The settlements approved on May 11 are the latest involving overtime allegations brought by stock brokers. (In re: Wachovia Securities Wage & Hour Litigation, MDL No. 1807 (C.D. Calif.))
The stock brokers, referred to as financial advisers or financial adviser trainees, alleged that they were misclassified as exempt from overtime under the federal Fair Labor Standards Act (FSLA) and state wage and hour laws.
They also claimed that they were not reimbursed for business expenses and did not receive timely paychecks upon leaving the company.
California stock brokers alleged that they were not given breaks for meals and rest periods as required by state law.
In its motion for preliminary approval, Wachovia, recently acquired by Wells Fargo & Co. Inc., said that the recent change in its corporate ownership would result in changes in policy and practices that could complicate the litigation.”
The article said that those affected by the settlement are financial advisers and trainees who worked for Wachovia Corp., Wachovia Securities LLC or First Union Securities Inc. “Most of the class members must make FLSA claims, but subclasses in the settlement are identified for workers with state claims in California, Illinois, Minnesota, Pennsylvania, New Jersey, New York and Ohio.”
A final approval hearing is set for Oct. 5, 2009.
To read the full article go to the National Law Journal’s website at $39 million settlement in stock brokers’ wages-and-hours action
The Wall Street Journal is reporting that Casey’s General Stores Inc. has agreed to pay $11.7 million to settle two class-action wage lawsuits and said it will record a $9.1 million charge in its fiscal fourth-quarter as a result of the settlement.
The convenience-store chain was sued by plaintiffs representing about 7,800 current and former assistant managers and about 76,000 current and former non-management-level employees over allegations they weren’t paid overtime.
Initially, Casey’s General Stores managers had filed a suit against the company, with cooks and cashiers suing for overtime pay in early 2008. Those employees also claimed they were denied mandatory meal and rest breaks and said they were asked to perform tasks before and after their shifts.
Under the settlement agreement, the company will also pay up to $400,000 in related settlement expenses. The company’s directors and officers insurance company will pay $3 million of the settlement on behalf of the defendants.
For the full article go to: http://online.wsj.com/article/BT-CO-20090508-716883.html
M.D.Ga.: Settlement Agreements Entered Into Without Benefit Of Counsel Not Binding; Defendant’s Motion To Dismiss Denied
Dowling v. Athens Ahmed Family Restaurant, Inc.
Plaintiffs April Dowling, William Smith, and Debra Scott initiated this action against Defendants, seeking to recover minimum wage and overtime compensation allegedly withheld from them by Defendants in violation of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201 et seq. After filing the lawsuit, all three Plaintiffs terminated their relationship with legal counsel, received money from Defendants in an attempt to satisfy their FLSA claims, and expressed disinterest in continuing the litigation. Therefore, Defendants contended that all three Plaintiffs’ claims against Defendants should be dismissed with prejudice. Plaintiffs, on the other hand, opposed the dismissal of any FLSA claims and request that the Court not approve any alleged settlements. Before the Court were: (1) Defendants’ Motion to Dismiss with Prejudice April Dowling’s Claims against Defendants and Approve Settlement Agreement between Dowling and Defendants (Doc. 37, hereinafter Mot. to Dismiss Dowling) and (2) Defendants’ Motion to Dismiss Debra Scott’s and William Smith’s Claims against Defendants (Doc. 38, hereinafter Mot. to Dismiss Scott & Smith). For the following reasons, Defendants’ motions are denied.
The Court denied Defendant’s Motion to dismiss applying the framework from Lynn’s Foods, requiring the Plaintiffs to return any money received under the “settlements.” Interestingly, the Court did note, that if the Plaintiffs failed to return the money paid to them, it would revisit the Motion to Dismiss:
“Since these claims remain pending for adjudication or proper settlement, the Court orders Plaintiffs Dowling, Smith and Scott to return any money paid to them by Defendants in the attempted settlement of their claims if they have not already done so. That money shall be returned to Defendants within 21 days of the date of this Order. If that money is not returned as ordered, the Court will reconsider its decision not to dismiss these Plaintiffs’ claims.”