Gray v. The CJS Solutions Group, LLC

Background

The parties filed a joint motion asking the court to approve their settlement. The litigation involved a conditionally certified Fair Labor Standards Act (FLSA) collective consisting of people who worked for The CJS Solutions Group, LLC, doing business as The HCI Group, as At-The-Elbow Consultants, also known as Epic Activation Consultants, between August 14, 2015, and May 31, 2017, and who had not previously participated in an earlier settlement involving HCI.

The court had previously declined to approve a different settlement. The opinion states that the new settlement differed in important respects: only plaintiffs who affirmatively opted in would receive its benefits and be bound by its obligations, and the record showed arm’s-length negotiations and evidence supporting the proposed distribution of settlement proceeds. After notice was sent, 176 people out of a potential collective of more than 500 filed consents to participate.

Settlement terms

HCI agreed to settle the Gray collective’s claims for $363,600. Of that amount, $133,600 was allocated directly to the opt-in plaintiffs. Each opt-in plaintiff would receive $100 plus an “overtime hour value” for hours worked over 40 in a week. The settlement also provided a $10,000 representative award for Shana Gray, $5,000 for administrative costs, and $215,000 for plaintiffs’ attorney fees and related costs. The parties negotiated the attorney-fee amount separately from the underlying liability.

Each opt-in plaintiff would receive a check for the amount listed in the settlement agreement and would have 120 days to cash it. Those who cashed their checks agreed to release HCI and other released parties from wage-related claims, including claims under the FLSA and other local, state, or federal wage laws, arising from unpaid or inaccurately paid wages, overtime, or other monetary relief.

Court’s analysis and ruling

For an FLSA collective settlement, the court said it needed to determine whether the settlement resulted from adversarial proceedings, represented a fair compromise of a genuine wage-and-hour dispute, and was fair and reasonable to everyone affected. The court considered the stage of the litigation and discovery, counsel’s experience, the likelihood of success on the merits, possible employer overreaching, and whether the settlement resulted from arm’s-length negotiations between represented parties.

The court concluded that the settlement was a fair compromise and fair and equitable to all parties. It also found the attorney-fee and cost amount reasonable. Judge Paul A. Magnuson therefore granted the joint motion for approval of settlement; approved the settlement agreement and release, including its payments, allocation method, releases, representative award, administrator, administrative costs, notice, and distribution process; approved the $215,000 attorney-fee and related-cost payment; ordered distribution of the notice and settlement amount under the agreement; and dismissed the matter with prejudice. Judgment was ordered to be entered accordingly.