18th Annual Workplace Class Action Report - 2022 Edition

702 Annual Workplace Class Action Litigation Report: 2022 Edition (lxviii) Service Awards And Costs In Class Actions Broughton, et al. v. Payroll Made Easy, Inc. , 2021 U.S. Dist. LEXIS 139514 (M.D. Fla. July 27, 2021). Plaintiffs filed a class action alleging that Defendant’s background check as part of the employment application process violated the Fair Credit Reporting Act (“FCRA”). The parties ultimately settled the litigation and filed a motion for preliminary settlement approval and for allowance of a service award for the named Plaintiff. The Court granted the motion. The Court determined that the settlement agreement was fair and adequate. The parties agreed to a gross settlement of $220,000 to resolve the claims, of which $97,392 would be distributed to 620 class members who applied for employment between January 17, 2018 through January 17, 2020. Each class member who submitted a valid claim would receive $161.78 and class members who applied between January 17, 2015, through January 17, 2018 would receive $45.25. The settlement also allowed for up to $73,260.00 in attorneys’ fees and costs and payment to the settlement administrator of up to $20,000. The settlement agreement also allowed payment to the named Plaintiff of $5,000 as consideration for his agreement to execute a general release and a supplemental settlement agreement which would "fully and conclusively resolve and settle all matters and claims Plaintiff could assert against Defendant. Id . at *7-8. The Court found that the amounts of recovery and the provision outlining the attorneys’ fees, costs, and incentive payment were fair, adequate, and reasonable. The Court explained that pursuant to the Eleventh Circuit’s binding precedent in Johnson v. NPAS Sols. Inc ., 975 F.3d 1244 (11th Cir. 2020), which held that under U.S. Supreme Court precedent, awarding incentive awards to named Plaintiffs was unlawful. However, it distinguished the situation here, as the named Plaintiff was receiving an enhanced payment for signing a broader release. The Court also ruled that Plaintiff satisfied all of the requirements for class certification and therefore it certified the class for settlement purposes and granted preliminary settlement approval. Poblano, et al. v. Russell Cellular Inc. , 2021 U.S. Dist. LEXIS 108796 (M.D. Fla. June 10, 2021). Plaintiffs filed a collective action alleging that Defendant failed to pay overtime compensation in violation of the FLSA. The parties ultimately settled the litigation and filed a motion for preliminary settlement approval and for service awards for the two named Plaintiffs. The Court denied the motion. The Court explained that pursuant to the Eleventh Circuit’s binding precedent in Johnson v. NPAS Sols. Inc ., 975 F.3d 1244 (11th Cir. 2020), which held that under U.S. Supreme Court precedent, awarding incentive awards to named Plaintiffs was unlawful. The Court further noted that the preliminary settlement agreement lacked a severability provision. Therefore, the Court could not sever the service award request and rule on the proposed settlement agreement without it. The Court also determined that the settlement agreement failed to include information regarding where remaining settlement fund monies would revert after all potential Plaintiffs failed claims. For these reasons, the Court denied the motion for preliminary settlement approval and for a service award for the two named Plaintiffs. Wickens, et al. v. Thyssenkrupp Crankshaft Co., LLC , 2021 U.S. Dist. LEXIS 17884 (N.D. Ill. July 26, 2021). Plaintiff filed a class and collective action alleging that Defendant failed to pay overtime compensation in violation of the FLSA and the Illinois Minimum Wage Law (“IMWL”). The parties ultimately settled the litigation and the Court granted preliminary settlement approval. Following notice to class members, Plaintiff’s counsel filed a motion for final settlement approval, for an award of attorneys’ fees and costs, and for an incentive award for named Plaintiff, which the Court granted. The Court found that the notice to the settlement class was disseminated in accordance with the Court’s preliminary approval order and fulfilled the requirements of Rule 23. The Court also held that the settlement agreement was the result of arm’s-length negotiations conducted in good faith by experienced attorneys. The Court opined that class counsel and the class representative adequately represented the settlement class. Further, the Court concluded that the settlement agreement was fair, adequate, and reasonable and in the best interests of, the settlement class given of complexity, expense, and duration of the litigation and the risks involved in trial. The Court also noted that there were no objections to the settlement. The Court therefore granted final settlement approval. The Court also awarded class counsel the sum of $298,000 as a fair and reasonable attorneys’ fee, and reimbursement of costs of $804.38. In terms of the request for a service award to the named Plaintiff, the Court noted that special circumstances existed as to the cooperation and participation that the named Plaintiff made in the litigation. As a result, this justified a service award at a higher value than in typical class action lawsuits. The Court determined that case law precedent from the Eleventh Circuit – the decision in Johnson v. NPAS Solutions , 975 F.3d 1244 (11th Cir. 2020) – was inapplicable and inconsistent with pertinent Seventh Circuit case law on incentive awards. For these reasons,