Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Norton v. Maximus Inc.

United States District Court, D. Idaho

April 17, 2017

YVETTE NORTON, JEANNETTE RODRIGUEZ-GUZMAN, KELLY BARKER, JOSEPH BELL, BRAD EPPERLY, STEPHANIE JONES, KATHERINE KELLEY KNOWLES, NANCY RICHARDS, and MARK ZUMWALT, individually and on behalf of all others similarly situated, Plaintiffs,
v.
MAXIMUS, INC., Defendant.

          MEMORANDUM AND ORDER RE: MOTION FOR FINAL APPROVAL OF CLASS SETTLEMENT

          WILLIAM B. SHUBB UNITED STATES DISTRICT JUDGE

         Plaintiffs brought this collective action against defendant Maximums, Inc., alleging that defendant misclassified them as salaried employees, failed to pay them overtime wages, and failed to keep accurate time records in violation of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. §§ 201 et seq. (First Am. Compl. (“FAC”) (Docket No. 34).) There were two sub-classes in this action: a trainer sub-class and a supervisor sub-class. (Id. at 2.) The trainer sub-class has settled its claims with defendant, and the court has approved that settlement. (See Nov. 19, 2015 Order (Docket No. 139).) Before the court now is the supervisor sub-class's Motion for final approval of its settlement with defendant. (Pls.' Mot. (Docket No. 212).)

         I. Factual and Procedural Background

         Defendant operates calls centers across the country that “interface with the public regarding . . . the Affordable Care Act.” (FAC ¶ 2.) It employs--at its Boise, Idaho and Brownsville, Texas locations--“first-level” supervisors who manage its call agents, monitor phone calls, and compile reports for higher-level managers within the company. (Id. ¶ 4.) These supervisors (“supervisors”) comprise the supervisor sub-class. (See Id. ¶ 13.)

         Supervisors brought this action against defendant on January 24, 2014, alleging the following claims under the FLSA: (1) misclassification of employment status, 29 U.S.C. § 213(a)(1); (2) failure to pay required overtime, Id. § 207(a)(2)(C); and (3) failure to keep accurate time records, Id. § 211(c).[1] (See Compl. at 21-24 (Docket No. 1).) On May 19, 2016, the court granted summary judgment to supervisors on the issue of misclassification, finding that defendant's method of calculating their wages failed to meet the ‘salary basis' test of 29 C.F.R. § 541.602(a). (See May 19, 2016 Order at 21 (Docket No. 187).) Because defendant did not pay supervisors on a ‘salary basis, ' the court concluded, it misclassified them as exempt from FLSA-required overtime wages. (Id.)

         On November 1, 2016, supervisors and defendant notified the court that they reached a settlement in this case. (Docket No. 204.) The settlement pays “$575, 000 in overtime hours and $402, 500 in [liquidated] damages” to supervisors, and a “separate award of costs and attorney fees of $575, 280” to supervisors' counsel. (Pls.' Mem. in Supp. of Mot. for Prelim. Approval (“Pls.' Mem.”) at 17 (Docket No. 206-1).) The average recovery, assuming each of the 106 supervisors who opted in to this action were to receive settlement funds, is $9, 221.69.

         The court granted final collective action certification and preliminary approval of class settlement to supervisors on February 22, 2017 (“preliminary approval order order”). (Feb. 22, 2017 Order (Docket No. 211).) Supervisors now move for final approval of their settlement with defendant. (Pls.' Mot.) Defendant supports supervisors' Motion. (See Def.'s Resp. (Docket No. 213).)

         II. Discussion

         The Ninth Circuit has declared a “strong judicial policy” in favor of settling of class actions. Class Plaintiffs v. City of Seattle, 955 F.2d 1268, 1276 (9th Cir. 1992). Where the “parties reach a settlement agreement prior to class certification, ” however, “courts must peruse the proposed compromise to ratify both [1] the propriety of the certification” under Federal Rule of Civil Procedure 23(a), and “[2] the fairness of the settlement” under Rule 23(e). Staton v. Boeing Co., 327 F.3d 938, 952 (9th Cir. 2003); see also Khanna v. Inter-Con Sec. Sys., Inc., No. CIV S-09-2214 KJM, 2012 WL 4465558, at *3 (E.D. Cal. Sept. 25, 2012) (applying the two requirements stated in Staton in approving FLSA collective action settlement). Each requirement generally proceeds in a two-stage process: preliminary approval, followed by final approval. See Carter v. Anderson Merchandisers, LP, No. EDCV 08-00025-VAPOPX, 2010 WL 144067, at *3 (C.D. Cal. Jan. 7, 2010).

         With respect to the propriety of certification, the court has already granted final collective action certification in this action. (Feb. 22, 2017 Order at 16.)

         With respect to the fairness of the settlement, the court preliminarily approved the parties' settlement as fair and reasonable on February 22, 2017. (Id.) The only remaining issue in the settlement approval process, therefore, is whether the court should grant final fairness approval with respect to the parties' settlement.

         A. Terms of Settlement

         The key terms of the parties' settlement are as follows:

(1) The Settlement Class: The settlement class is comprised of “[a]ll First-Level Supervisors employed by Maximus from on or around August of 2013 and thereafter who were assigned to supervise a team of approximately 14 call center employees responsible for handling telephone calls on behalf of Maximus[, ]were classified by the company as exempt employees under the FLSA, ” and opted in to this action. (Id.)
(2) Notice: Supervisors' counsel sent opt-in notice via postal mail to supervisors in October 2014. (See Oct. 28, 2014 Order (Docket No. 62).) 106 supervisors opted in to this action. (Pls.' Mem. at 19.) After opt-in took place, supervisors' counsel informed opt-in supervisors on at least six different occasions, via postal mail, email, and telephone, that they needed to submit their claimed overtime hours in order to be eligible to receive settlement funds. (See Pls.' Mot. at 3-5.) 92 opt-in supervisors submitted their claimed overtime hours. (Pls.' Mem. at 19.) After the court preliminarily approved the parties' settlement, supervisors' counsel mailed and emailed notice of settlement to all opt-in supervisors. (Id. at 2.)
(3) Opt In / Opt Out Procedure: As noted above, an opt-in notice was sent to supervisors in October 2014. Supervisors had sixty days from the date opt-in notice was sent to opt in to this action by mail, email, or fax. (See Opt-In Notice at 1 (Docket No. 61).) To receive payment under the parties' settlement, opt-in supervisors also needed to submit their claimed overtime hours. Supervisors were able to submit those hours by email from June 2014 through September 2016. (See Decl. of Jennifer Hanway (“Hanway Decl.”) Ex. A, June 3, 2014 Email Correspondence; Decl. of Jeremiah Hudson (“Hudson Decl.”) Ex. A, Sept. 8, 2016 Email Correspondence.) Because each opt-in supervisor agreed to be bound by this action, (see Opt-In Notice at 1 (“You will be bound by the decisions of the Court concerning this lawsuit, whether favorable or unfavorable.”)), no opt-out procedure has been provided.
(4) Objection Procedure: Pursuant to the court's preliminary approval order, opt-in supervisors were given twenty-six days from the date notice of settlement was sent to object to the parties' settlement. (See Feb. 22, 2017 Order at 17 (requiring that notice be sent by March 2 and objections be filed by March 28).) The notice of settlement stated that objections must be in writing, sent to supervisors' counsel, and filed with the court by March 28, 2017. (See id.; Notice of Settlement at 4 (Docket No. 206-2).) The notice also stated that supervisors who wish to object in person or via counsel at the final fairness hearing must file a notice of appearance with the court by March 28. (See Notice of Settlement at 4.) The court is aware of one objection that was sent to supervisors' counsel, but not filed with the court. (See Pls.' Mot. at 2-3.)
(5) Settlement Amount: Defendant will pay $575, 000 in back overtime wages and $402, 500 in liquidated damages to participating supervisors. (Notice of Settlement at 2- 3.) This amount “will not be subjected to a reduction for . . . attorneys' fees or costs.” (Id. at 3.)
(6) Attorneys' Fees and Costs and Enhancement Award: Supervisors' counsel will receive “a separate award of costs and attorney fees of $575, 280” under the parties' settlement. (Pls.' Mem. at 17.) The named supervisor in this action, Yvette Norton, has not requested an enhancement award.
(7) Settlement Distribution: Settlement funds will be distributed “based upon the hours of . . . [unpaid] overtime reasonably claimed by each Supervisor.” (Id.) The number of claimed overtime hours that are “reasonable” will be determined based on “period of employment as a Supervisor, ” “a review of PTO, Holiday, LWP and FMLA hours taken, ” and “a review of badge swipes to determine the days Supervisors were present at a call center.” (Id.) Supervisors' counsel represent that each supervisor who submitted his or her claimed overtime hours can expect to receive “approximately 79.09% of [his or her] reasonably claimed overtime hours multiplied by an average overtime hourly rate of $26.97, ” plus “an additional payment equal to 78.94% of his or her reasonably claimed overtime payment as liquidated damages.” (Notice of Settlement at 3.) The average recovery, assuming each of the 106 opt-in supervisors were to receive settlement funds, is $9, 221.69.
(8) Release: The settlement will release “all the claims that were asserted in the Complaint and Amended Complaint against [defendant] under the FLSA in Boise, Idaho or Brownsville, Texas.” (Id.) For supervisors, these claims are: (1) misclassification of employment status, 29 U.S.C. § 213(a)(1); (2) failure to pay required overtime, Id. § 207(a)(2)(C); and (3) failure to keep accurate time records, Id. § 211(c). (See FAC at 20-24.) The settlement also releases an unlawful retaliation claim, 29 U.S.C. § 215(a)(3), brought individually by Ms. Norton. (See Id. at 24-26.)

         B. Fairness of Settlement

         Federal Rule of Civil Procedure 23(e) “requires the district court to determine whether a proposed [class] settlement is fundamentally fair, adequate, and reasonable.” Hanlon v. Chrysler Corp.,150 F.3d 1011, 1026 (9th Cir. 1998). In determining the fairness of a class ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.