United States District Court, D. Vermont
DOREEN FORAUER, NANCY J. BART, MICHAEL MULLADY, CANDY MANNING, JOLENE KALANQUIN, GWENDOLYN C. TAFT, COURTNEY TOWLE, CANDICE MA YETTE, ROBERT MIDDLETON, MARISSA FITZGERALD, SUSAN D. CLARK, LINDA J. KASUBA, MATTHEW MARTINDALE, MARK W. MILLER, DONNA G. PRIOLO, RONALD S. AUSTIN, JAMIE TUCKER, CAROLE KULIKOWSKI, DEVON R. AUSTIN, DEBBIE BEZIO, AMANDA PRITCHARD, CAROL JEAN PRITCHARD, LINDA STOCKER REUTHER, and DEBORAH CONNORS, Plaintiffs,
THE VERMONT COUNTRY STORE, INC., Defendant.
OPINION AND ORDER GRANTING THE STIPULATED MOTION TO APPROVE SETTLEMENT (DOC. 75; DOC. 90)
CHRISTINA REISS, Chief District Judge.
Pending before the court is a joint motion to approve a settlement agreement (the "Settlement Agreement") between Plaintiffs, who include named Plaintiff, Doreen Forauer, and twenty-three opt-in Plaintiffs, and Defendant Vermont Country Store, Inc. ("VCS"). In this collective action brought under the Fair Labor Standards Act (the "FLSA"), Plaintiffs allege that VCS required them and other similarly-situated employees to perform certain duties before, during, and after their shifts for which they were not compensated in violation of 29 U.S.C. § 206, which requires employers to pay all employees at least the minimum wage for all hours worked. VCS denies that it has violated the FLSA.
The parties have agreed to settle the pending action. Pursuant to their Settlement Agreement, VCS is to pay a lump sum of $22, 000, of which the opt-in Plaintiffs are to receive approximately $6, 060 in damages. Plaintiffs' counsel requests $11, 205.52 in fees and $4, 733.50 in costs. The Settlement Agreement also included "a general release of all claims relating in any way to [each Plaintiff's] employment at VCS." (Doc. 75-1 at 4, ¶ V.)
The court held a Fairness Hearing on December 8, 2014, at which time the court raised concerns about, inter alia, the scope of the general release in the Settlement Agreement and the failure of Plaintiffs' counsel to submit documentation to support the request for attorney's fees and costs. At the conclusion of the Fairness Hearing, the court ordered Plaintiffs' counsel to submit documentation of their attorney's fees and costs, which counsel submitted on December 10, 2014. (Doc. 88.)
On December 24, 2014, the parties submitted a joint stipulation to amend the Settlement Agreement in light of the parties' agreement to limit the release provision in the Settlement Agreement to a release of "all claims of lost wages and benefits." (Doc. 90 at 1.) The parties also submitted a draft "Release of Claims for Wages and Benefits." (Doc. 90-2.) The court granted the joint stipulation to amend the Settlement Agreement on December 30, 2014, (Doc. 92), at which time it took the matter of final approval of the Settlement Agreement under advisement.
Plaintiffs are represented by Christopher J. Larson, Esq. and Erin H. Gallivan, Esq. VCS is represented by Andrew H. Maass, Esq.
I. Factual and Procedural Background.
A. Factual Allegations Underpinning the FLSA Claims.
Plaintiffs allege VCS required both the telemarketing sales representatives and customer service representatives, who "went through the same processes before [and] after shifts, " to complete "the same pre-shift and post-shift activities" off the clock and that these employees were subject to the same policies. (Doc. 18 at 2, 6.) Specifically, Plaintiffs allege the unpaid work VCS required them to perform before their call shifts included turning on, booting up, and logging into their computers and various software programs, including a timekeeping software; reviewing emails and messages prior to the start of their shifts; and starting up VCS's website and their phones. Plaintiffs further allege the unpaid work VCS required them to perform during their breaks and at the end of their shifts included closing down the phone, website, software, and computer; documenting daily activities; and reviewing the work schedule and requesting schedule changes. For example, the named Plaintiff, Ms. Forauer, alleges that she spent between twenty to thirty minutes per shift completing work for which she was not compensated.
Plaintiffs allege that VCS knew its employees were not being compensated for this additional work and that VCS did not have a process for employees to recover wages for time spent completing this additional work. They further allege that VCS instructed its employees "to arrive before their scheduled shifts in order to perform preliminary activities in order to be ready to take calls the moment their scheduled shifts began." (Doc. 1 at 4, ¶ 16.) If employees were not ready to take calls at the minute their shifts began or at the minute their breaks ended, or if employees logged out before their shifts ended, VCS allegedly reprimanded employees. The named Plaintiff, Ms. Forauer, asserts she was personally reprimanded on this basis. In addition, VCS allegedly had "policies in place" whereby an employee's performance scores were adversely affected if an employee was not ready to take calls every minute of a scheduled shift. (Doc. 1 at 4, ¶ 16.)
B. Procedural History.
After filing the pending action on December 11, 2012, Ms. Forauer, the named Plaintiff, sought conditional certification of a collective action, pursuant to 29 U.S.C. § 216(b), for "a class of all current and former Telemarketing Sales Representatives and Customer Service Representatives employed by The Vermont Country Store within three years prior to the date of the [court's] order, who worked for [The Vermont Country Store] but were not paid minimum wages for a portion of the hours worked." (Doc. 7-1 at 1.) On July 31, 2013, the court granted Ms. Forauer's motion for conditional certification of a collective action under the FLSA and conditionally certified a class of all current and former telemarketing sales representatives and customer service representatives employed by VCS within three years prior to the date of the July 31, 2013 Opinion and Order. See Forauer v. Vt. Country Store, Inc., 2013 WL 3967932, at *7 (D. Vt. July 31, 2013). During the pendency of the subsequent 60-day opt-in period, twenty-four Plaintiffs filed their consents to become a party plaintiff.
Over the course of discovery, fourteen of the opt-in Plaintiffs were deposed, and Defendant produced records concerning its timekeeping procedures and the log-in and log-out information for each opt-in Plaintiff. At the close of discovery, the parties filed a joint motion for approval of the Settlement Agreement. (Doc. 75.) On August 27, 2014, the court preliminarily granted the parties' motion for approval of the Settlement Agreement, and the court authorized notice of the Settlement Agreement to the opt-in Plaintiffs. (Doc. 77.) During the course of the notice and comment period, none of the opt-in Plaintiffs submitted objections to the Settlement Agreement.
Following the court's preliminary approval of the Settlement Agreement, Plaintiffs filed a motion to remove one opt-in Plaintiff, Mary Lou Marcell-Cameron (Doc. 80), which the court granted with the provision "that the proposed total settlement amount be reduced by the allocated settlement amount for Mary Lou Marcell-Cameron." (Doc. 84.) While VCS requested that the court also reduce the amount allocated for attorney's fees in proportion to the reduction in the number of opt-in Plaintiffs, (Doc. 82), which Plaintiffs' counsel opposed, (Doc. 83), the court reserved decision regarding whether to reduce the request for attorney's fees until after the comment period and Fairness Hearing.
At the court's Fairness Hearing, none of the opt-in Plaintiffs presented objections.
C. The Terms of the Settlement Agreement.
Under the terms of the Settlement Agreement, VCS will pay a lump sum of $22, 000 for "any and all back wages and/or overtime and any and all other damages each opt-in Plaintiff claims he/she is owed under the allegations of the Lawsuit" and "which may be owed to Plaintiffs' counsel for all attorneys fees, costs and expenses for and related to the Lawsuit." (Doc. 75-1 at 1, ¶ 1.) The amount of the lump sum payment each opt-in Plaintiff is to receive is based on an approximation of the number of minutes or hours each Plaintiff allegedly worked without pay multiplied by that Plaintiff's last rate of pay. If a Plaintiff's estimated unpaid wages is less than $100, the Plaintiff will receive in damages a payment of $100. Fifteen of the Plaintiffs are to receive $100 in damages. If a Plaintiff's estimated unpaid wages exceed $100, the Plaintiff will receive double his or her estimated unpaid wages. Nine of the Plaintiffs are to receive damages in excess of $100 based on his or her estimated unpaid wages. The Settlement Agreement states that each Plaintiff agrees "that the amount he/she will receive in settlement is fair and reasonable compensation" for the alleged back wages and other potential damages owed by VCS. (Doc. 75-1 at 3, ¶ III.) Under the terms of the Settlement Agreement, total damages to be paid to Plaintiffs amounts to $6060.98. (Doc. 75-1 at 6, Ex. A.) The remainder of the lump sum payment is to be distributed to Plaintiffs' attorneys, who request $11, 205.52 in fees and $4, 733.50 in costs. (Doc. 75-3 at 6.)
The opt-in Plaintiffs and VCS have further agreed to the following "terms and conditions": (1) that "this is a settlement of a genuine and bona fide dispute" of the claims asserted regarding federal and state "wage and hour requirements"; (2) that the settlement "has been achieved in recognition of the risks to all parties in pursuing final judgment from the court"; and (3) that the settlement "is the result of arm's length and good faith negotiations between counsel for the parties and is a voluntary and agreeable meeting of the minds of all parties." (Doc. 75-1 at 1-2, ¶ III.) The Settlement Agreement states that VCS denies any wrongdoing or liability; that the parties agree that the "settlement is over disputed claims with no party admitting liability or wrongdoing"; and that VCS "had objective evidence to dispute all claims presented in the action." (Doc. 75-1 at 1-2, ¶ III.)
The Settlement Agreement notes that it is subject to the court's approval and allows either the opt-in Plaintiffs or VCS to withdraw from the Settlement Agreement if "the terms" are "not approved by the Court to the satisfaction of [the] opt-in Plaintiffs or VCS." (Doc. 75-1 at 3-4, ¶ IV.) Moreover, if any opt-in Plaintiff is dissatisfied with the Settlement Agreement "for any reason, including but not limited to the consideration he/she is designated to receive, then VCS has the option to withdraw its participation from this settlement in full and to no longer be bound by [its] terms and conditions, " provided VCS gives written notice to Plaintiffs' ...