Vecchio v. Quest Diagnostics Inc.

Background

Maria Vecchio sued Quest Diagnostics, Inc., ExamOne World Wide, Inc., and ExamOne LLC, alleging that the defendants failed to pay minimum and overtime wages as required by the Fair Labor Standards Act (FLSA) and the New York Labor Law (NYLL). The first action was filed in 2016. The state-law claims were dismissed without prejudice in 2017, and Vecchio later filed those claims in a separate New York state-court action that the defendants removed to federal court. The two cases were treated as related.

In 2018, the court conditionally certified an FLSA collective consisting of mobile examiners who had been designated as independent contractors or employees during the relevant period. Approximately 2,700 people opted into that collective. In September 2020, the court later decertified the collective, dismissed Vecchio’s minimum-wage claims with prejudice, dismissed the overtime claims of 32 specified opt-in plaintiffs, and dismissed the remaining opt-in plaintiffs’ claims without prejudice.

The parties later reached a proposed settlement covering both cases. The court denied the parties’ original motion without prejudice in August 2022 because, among other things, the proposed documents did not properly require written consent to join the FLSA collective, contemplated evaluating fairness before collective members opted in, contained inconsistent notice provisions and deadlines, included actions that were premature at the preliminary-approval stage, and used an incorrect settlement-payment formula.

Conditional Certification

Vecchio’s amended settlement class and FLSA collective consisted of all people who contracted or otherwise arranged with a defendant or related or affiliated entity to perform services as a mobile examiner in New York at any time between June 29, 2010, and the date of the preliminary-approval order. The defendants no longer opposed certification for settlement purposes.

For the Rule 23 class, the court found that the requirements of numerosity, commonality, typicality, and adequate representation were met. The court noted that there were approximately 2,700 class members and that the proposed claims involved common issues concerning allegedly unpaid minimum and overtime wages. It also found that common factual allegations and legal theories predominated and that a class action was superior to individual litigation. Because certification was sought only to facilitate settlement, the court did not address manageability. The court therefore granted conditional certification of the settlement class under Rule 23.

For the FLSA collective, the court applied the first step of the two-step certification process. That step requires a modest factual showing that the named plaintiff and potential opt-in plaintiffs were victims of a common policy or plan that violated the law. Based on its class-certification analysis, the court found that Vecchio had shown that she was similarly situated to the proposed collective members and granted conditional certification of the FLSA collective for settlement purposes.

Settlement Agreement

The court conducted only a preliminary review of the proposed settlement. Preliminary approval requires an initial evaluation of whether the settlement appears to fall within the range of possible approval; it is not final approval of the settlement.

The court found that the amended settlement documents corrected some earlier problems but left several unresolved issues:

- Section 4.6(b) improperly suggested that cashing a settlement check alone would cause a person to join the FLSA collective and release FLSA claims. The agreement had to make clear that a claimant must file written consent with the court to opt into the collective and release those claims. - The agreement still appeared to permit a fairness hearing before the deadline for collective members to opt in. The parties had to provide that no fairness hearing or final settlement approval would occur until that deadline expired. - The opt-out deadlines in the amended settlement agreement and proposed notice were inconsistent and had to be made consistent. - The amended proposed order still included language dismissing both cases with prejudice, which the court found premature at the preliminary-approval stage. That language had to be deleted.

Because these issues remained unresolved, the court denied preliminary approval of the amended settlement agreement without prejudice.

Disposition

The court’s final disposition was: (1) the motion to conditionally certify the settlement class and FLSA collective was GRANTED; and (2) the motion for conditional approval of the amended settlement agreement was DENIED without prejudice. The parties were instructed to file a further revised settlement reflecting the court’s directions by April 14, 2023. The opinion did not grant final approval of the settlement or dismiss the two cases.