TAMPA — After approving a $3.5 million class action settlement for an overtime pay lawsuit, a Florida federal judge approved a $1.3 million request for attorneys’ fees. The lawsuit stemmed from an August 2012 claim that Lowe’s misclassified its human resource managers as exempt from overtime under the Fair Labor Standards Act (FLSA). Lowe’s strongly denied the allegations and, at the time of the settlement, had a motion requesting decertification of the class. Once the $70,000 in costs are added into the total, the final settlement amount comes to just under $5 million.
Negotiating the Settlement
The settlement process was extensive in this case. In most cases, the parties’ counsel will conduct informal negotiations and the parties may enter into formal mediation before reaching a settlement. If no settlement can be reached the parties will go to trial. In this case the settlement process also included court supervision.
One of the reasons the process was so hard fought revolved around how many class members would be included. The court rejected a $9.5 million settlement in August which would have included nearly 3,000 class members. It also rejected a $3.4 million settlement for the current 891 class members because the members would receive only $2 million, an insufficient amount which covered just 20 percent of the claimed damages. Under the approved $3.56 million settlement, members will receive awards based on the number of weeks they worked for Lowe’s from January 2011 until the date of the settlement approval. The Florida federal judge approved the $3.56 million settlement offer nearly a week before she approved the requested attorneys’ fees and costs.
Attorneys’ Fees and Class Actions
Settlements and judgments in class actions, whether for unpaid overtime wages or for other violations of employees’ rights, usually result in awards of attorneys’ fees around 25 to 35 percent of the settlement amount. When asking for attorneys’ fees, particularly when the amount is significant, attorneys must seek court approval of those fees and provide evidence supporting the amount requested. The court in this case noted that the award was higher than typical, but after reviewing all of the facts, the court approved the amount.
Generally, class actions take longer than most lawsuits if for no other reason than the added time associated with identifying, contacting, and notifying potential class members of the lawsuit and potential settlements. Additionally, nearly all class actions are accepted and performed on a contingency basis. When a claim is pursued on a contingency basis the plaintiffs may be responsible for court costs, like filing fees or deposition fees, over the course of the case, or they may not. With class actions, court costs are usually added into the contingency plan, meaning the plaintiff or plaintiffs are only responsible for costs and attorneys’ fees if they receive a settlement.
If you believe you have an overtime claim or have received notice of an overtime settlement offer and have questions, our knowledgeable team of overtime pay lawyers can evaluate your situation and discuss your options today at (855) 754-2795 or you can complete the Free Unpaid Overtime Case Review form. If we accept your case, we will represent you under our No Fee Promise. This means there are no legal fees or costs unless you receive a settlement.