I have blogged so many times about Assistant Manager class actions. I never seem to get tired of it because there is a never-ending “supply” of them. Guess what. Another one. A group of employees working for AC Moore, an arts, crafts and floral merchandise retailer, has petitioned a federal judge to approve an almost three-million dollar settlement that settles claims that they have been misclassified as exempt executive employees. The case is entitled Rossmeisl et al. v. A.C. Moore Arts & Crafts Inc., and was filed in federal court in the District of Massachusetts.
The plaintiffs asked for the court approval a bare two months after they filed their collective action. Their theory was that they were misclassified as exempt. They argued equally hard that the settlement should be approved because it was the right thing to do. They stated that “the settlement was the result of extensive pre-suit investigation, discovery and substantial arm’s-length negotiations. Recognizing the uncertain legal and factual issues involved, the parties reached the settlement pending before the court after private mediation before an experienced mediator.”
The lawyers for the plaintiffs advised the employer that they were alleging that the assistant general managers were misclassified as exempt in January 2016. The parties then entered into pre-litigation discussions to ascertain if a settlement was possible. The Complaint was nevertheless filed on February 8. The court papers then capture the essence of why this settlement should be approved.
The court papers advised the Judge that “the settlement, which followed a thorough investigation and mediation with a former federal magistrate judge, Hon. Diane Welsh, satisfies the criteria for approval of a Fair Labor Standards Act collective action settlement because it resolves a bona-fide dispute, was reached after in-depth investigation and review of significant documentary evidence and payroll data, was the result of arm’s-length settlement negotiations assisted by a private mediator and between experienced counsel and provides good value to the workers it will benefit.”
This is an interesting tactic employed by the lawyers for the plaintiffs. Avoid litigation, but still get a nice settlement. It might also be better for an employer but there might be, I fear, too ready a desire to settle at such an early stage, just to avoid the (rapidly) escalating legal fees associated with defending such a case. Naturally, the merits, good or bad, dictate the employer’s strategic decision.