A settlement has just been approved whereby Bank of America will pay $73 million to end a multidistrict litigation in which a class of 180,000 hourly employees accused the Company of compelling them to work off the clock. The Court approved the settlement, notwithstanding that it noted that the plaintiffs, a class of retail banking employees “faced formidable obstacles on the road to ultimate success in this litigation.” The case is entitled In re: Bank of America Wage and Hour Employment Practices Litigation and was filed in federal court in Kansas.

The employees will be paid in a proportionate manner, calculated by the numbers of hours they worked since October 2006, but each one will receive at least $20. The Court wryly noted that “plaintiffs candidly admit that while $73 million is a substantial sum, individual recoveries in this case will be relatively modest in light of the size of the class and the nature of the harm alleged.”

The settlement places closure on the class allegations that the Company adhered to a uniform, across-the-company policy that mandated that non-exempt employees perform off-the-clock. The plaintiffs charged that the Company’s restrictive labor budgets and centralized scheduling process, coupled with its pressure to manage overtime aggressively, created a companywide environment that required nonexempt employees, working in often-understaffed branches, to perform off-the-clock work. One-quarter of the settlement, i.e. $18.25 million, goes to attorneys’ fees and an award of $900,000 was given for costs and expenses

This was a settlement and yet it highlights so well the dangers involved in defending and litigating FLSA class action cases, due to the fee shifting nature of the FLSA and corresponding state statutes. I myself have settled four such cases in the last six months, just for the named/lead plaintiffs and have gotten the client out (relatively) cheaply, before the heavy hitting begins.

Discretion is often the better and cheaper part of valor, especially, as is so often the case, the employer/client is wrong, or, arguably wrong. Knowing when to fold them is as important, if not more so, than continuing to fight.