Travel Agents' Overtime Suits Settled For $3M
NEWARK, N.J. - A New Jersey federal judge on April 8 granted final approval to a $3 million settlement for three class complaints filed by travel agents employed by the same travel agency seeking unpaid overtime (Deanna Bredbenner, et al. v. Liberty Travel, Inc., No. 09-905, Carol Connell, et al. v. Liberty Travel, Inc., et al., Nos. 09-1248, 09-4587, D. N.J.).
A group of travel agents employed by Liberty Travel Inc. and its parent company, Flight Centre USA Inc., filed a FLSA collective complaint against their employer in the U.S. District Court for the Southern District of New York, seeking unpaid overtime.
Liberty's travel agents are compensated through a mix of weekly base pay, commissions, bonuses and overtime for hours worked in excess of 40 hours per week. Employees eligible for overtime receive 1/2 of their hourly rate, based on a composite of their weekly base pay and the total number of hours worked that week. The employees complained that because the overtime rate of pay was not fixed and instead dependent on the sum total of hours accumulated each week, overtime pay progressively decreases as the number of hours spent working overtime increases.
On July 31, 2009, Judge William J. Martini conditionally certified the FLSA claim in Deanna Bredbenner's complaint as a collective action for all people employed by Liberty as a travel agent in Delaware, Maryland and New York between Aug. 13, 2006, and Sept. 1., 2008. In all, 143 people opted in to the Bredbenner action, nine opted in to the second complaint and two opted in to the Hubbs complaint.
After nearly six months of negotiations, the parties reached a global settlement in principle in July 2010 that resolved all claims in each of the pending overtime suits. Under the terms of the settlement, a common fund of $3 million will be created for settlement payments, attorney fees, service payments for class representatives, payroll taxes associated with the settlement and claims administration expenses.
The District Court preliminarily approved the settlement and certified the class in November. The Magistrate Judge certified the state and FLSA classes for the purposes of the settlement and granted final approval of the settlement agreement in its entirety.
Concerning the settlement's terms, the court stated in relevant part, "The settlement, which provides time and one half each employee's hourly rate, represents 'a reasonable compromise of disputed issues [rather] than a mere waiver of statutory rights brought about by an employer's overreaching.'" (quoting Lynn's Food Stores, Inc. v. United States (679 F.2d 1350, 1354 (11th Cir. 1982)).
(Abstract of Article from LexisNexis® Mealey's™ Litigation Report Employment Law, Vol. 7, Issue #10, May 2011).