Federal Court approves $42 million settlement of employee overtime pay claims
A federal district court in New York has approved a $42 million settlement of class claims against JP Morgan Chase filed by five employees seeking to recover unpaid overtime wages under the FLSA and New York state law. In granting approval to the proposed settlement, the court found that the settlement was both procedurally and substantively fair. In this regard, the court found that there was no indication that the settlement was the product of anything other than arm’s-length negotiations, and that plaintiffs’ counsel possessed the requisite experience and ability, and had engaged in sufficient discovery, to effectively represent the class’s interests. Noting that the case was complex, having been litigated for more than 10 years and involving thousands of class members and extensive discovery, the court wrote that a trial would be lengthy and complicated as well. Of the 3,800 individuals in the class who were sent notice of the settlement, only 11 opted out and just three objected.
With respect to the scope of the requested employee releases, the court noted well established Second Circuit law providing “that class action releases may include claims not presented and even those which could not have been presented as long as the released conduct arises out of the ‘identical factual predicate’ as the settled conduct.” Nevertheless, the court found that the settlement objectors were correct that settling class members generally cannot validly release other class members’ claims that they themselves do not possess, for no consideration. Citing the Second Circuit, the court wrote “[a]n advantage to the class, no matter how great, simply cannot be bought by the uncompensated sacrifice of claims of members, whether few or many, which were not within the description of claims assertable by the class.” However, the court was not persuaded by the arguments of the objectors because their assertions were not supported by the terms of the settlement. It was simply not true that the release covered claims arising out of class members’ non-exempt employment. Thus, the court rejected the objectors’ contention that the release was invalid because the named plaintiffs sought to settle claims that they did not possess, for no consideration.
(Davis v. JP Morgan Chase & Co., Case No. 01-CV-6492L (W.D.N.Y. Oct. 11, 2011)).