A federal judge approved a $3.6 million overtime settlement for dozens customer service representatives at Swift Transportation. The payment ends a collective action brought by the workers under the federal Fair Labor Standards Act.
Overtime and the Fair Labor Standards Act
Until the lawsuit, Swift claimed that the customer reps were salaried and exempt from overtime. Passed in 1938, the Fair Labor Standards Act requires that most workers be paid time and one half for hours worked in excess of 40 each week. Corporate lobbyists have watered down the law in years. Professionals, managers and administrative workers are now largely exempt meaning no overtime.
The case was originally brought by a single employee, Barbara Flores. She filed her overtime suit in April 2014. Swift challenged the class action and claimed that many of its customer service representatives had signed arbitration agreements in which they gave up their right to sue.
Even though the costs were far higher, Swift elected to force many of the employees into individual arbitration. After a year of aggressive defense, Swift agreed to a collective mediation on the eve of the first arbitration case. After 11 days of mediation, Swift gave in and agreed to a global resolution of all the related claims. The settlement requires the customer service reps to receive $2,345,148 in back overtime and the lawyers will receive $1,195,750. Barbara Flores, the class representative was awarded an additional $10,000 for service as the class representative.
The company also agreed to reclassify CSR’s as non exempt.
Courts are required to approve Fair Labor Standards Act settlements in collective and class action cases. Here the court considered there was a real risk that the workers might have lost or may have only been entitled to 2 years of back overtime. (The complaint sought 36 months.) Having found that the workers were walking away with 60% of the maximum possible claims, the court approved the settlement.
Apart from the excellent result, the case is important because of the arbitration waiver and how Swift was forced to the table. Employers frequently employ lawsuit and class action waivers as a way of discouraging overtime claims. It is very hard to find a lawyer willing to take a single clam. This is especially true when the waiver also says the case must be arbitrated before the American Arbitration Association. The costs of an AAA arbitration are often more than any ultimate recovery. When those costs are not spread over a large group of workers, they become prohibitive.
Congress probably didn’t anticipate lawsuit waivers when passing the FLSA during the Great Depression. They did have the foresight, however, to include an attorney’s fee provision requiring the employer to pay the worker’s legal fees if the worker prevailed.
Swift’s strategy was to force dozens of individual arbitrations when the workers decided to go forward. We believe that once Swift’s bluff was called the company realized that it could easily wind up paying millions more in legal fees.
If you have signed a “no lawsuit” or no class action waiver with your employer, don’t despair. There is safety in numbers. Often we can find other workers or force the company to negotiate on behalf of all similarly situated workers.
Interested in learning more about the FLSA, wage theft and overtime lawsuits? Give us a call. From single cases to the national class action on behalf of almost 200,000 Ubër drivers, no case is too big or too small. And we certainly aren’t intimidated by big corporations or their million dollar lawyers.
Need more information? Give us a call at (202) 800-9791. All inquiries are protected by the attorney – client privilege and kept strictly confidential.
MahanyLaw – America’s FLSA and Overtime Lawyers