United States District Court, D. New Jersey
CRONIN & MUSTO, Patrick T. Cronin, Esq., Haddonfield, New Jersey, BERKOWITZ & ASSOCIATES, PC, Steven A. Berkowitz, Esq., Marlton, New Jersey, Counsel for Plaintiffs.
LITTLER MENDELSON, P.C., Michael T. Grosso, Esq., Alison Andolena, Esq., Amber M. Spataro, Esq., Newark, New Jersey, Counsel for Defendants.
JOSEPH E. IRENAS, Senior District Judge.
This is a collective and class action case arising under Fair Labor Standards Act ("FLSA"), 29 U.S.C. §§ 201-19, and the New Jersey Wage and Hour Law ("NJWHL"), N.J.S.A. 34:11-56a. The Plaintiffs assert that Defendants failed to adequately pay Plaintiffs a portion of their wages starting in early 2011. (Compl. ¶ 215)
Presently before the Court is the parties' joint motion for provisional certification of the settlement class, and preliminary approval of the collective and class action settlement agreement. For the reasons stated below, provisional certification and preliminary approval will be granted.
I. Factual Background
First Student Management LLC and First Student, Inc. (collectively, "First Student" or "Defendants"), provide bus service to various schools in the Southern New Jersey area and offer charter services throughout the region. Defendants employ bus drivers and aides, who are responsible for transporting students to local municipal schools and extracurricular activities. The Plaintiffs in this matter are comprised of drivers and aides from Lawnside, Berlin, Delran, Cologne, Chatham and Burlington yards in New Jersey. (Compl. ¶ 214)
Beginning in March 2011, Plaintiffs contend that Defendants failed to pay straight time and overtime wages. (Compl. ¶ 224) Specifically, Plaintiffs assert that various tasks, such as pre-trip inspections, occurring before the initiation of the Zonar system,  were not properly compensated. (Compl. ¶ 247-62) Similarly, upon returning from their bus route and disengaging the Zonar system, Plaintiffs allege they were not compensated properly for post-trip inspections and other post-trip tasks. (Id.)
Plaintiffs filed their original complaint in this Court on March 21, 2013. (Dkt. No. 1) In the following months, additional individuals filed Consent to Join Forms, and an Amended Complaint was filed on July 18, 2013. (Dkt. No. 38)
II. Proposed Settlement Agreement
Following extensive negotiations, the parties come before the Court with a proposed settlement agreement for preliminary approval. The proposed settlement agreement is the product of three full days of in-person mediation with Hon. Joel B. Rosen, U.S.M.J. (Ret.), between February and April 2014. (Br. in Supp. at 2-3) According to the parties, the settlement is a result of substantial discovery on both sides, and the product of several months of adversarial negotiations. (Id.)
The proposed settlement agreement provides that First Student will pay a maximum of $1.6 million to settle this action. (Id.) Half of the amount will be considered unpaid wages, and the other half considered damages. (Id.) The settlement will be administered as a common fund paid through a third-party settlement claims administrator, and the administrator will calculate individual settlement awards subject to a proposed formula described infra. (Id.) As the parties confirmed at the joint motion hearing, the costs of the administrator, as well as the mediation sessions with Judge Rosen, will be borne by the Defendants and will not be subtracted from the maximum settlement amount. (Id.)
The parties estimate that approximately 1, 455 drivers and aides at the six facilities identified will be eligible for settlement awards as part of the NJWHL action and FLSA collective action class. (Id.) These class members will receive notice of the suit and settlement via registered mail. (Id.) Each class member who returns a claim form and does not opt-out of the settlement will receive payment based on the formula explained below. (Br. in Supp.4) These proposed forms are included as Exhibit C in the parties' joint motion for settlement approval.
Plaintiffs' counsel seeks a fee award of $462, 000,  covering all legal fees and expenses, which the Defendants do not oppose. (Br. in Supp. at 4) The legal fees and costs will be subtracted from the $1.6 million settlement fund before calculation of individual settlement awards. (Id.) As Plaintiffs' counsel confirmed at the motion hearing, no additional funds will be taken out of the settlement fund for any subsequent legal fees or costs.
To calculate an individual Plaintiff's settlement award, the claim administrator will use a formula that begins with the maximum settlement amount ($1.6 million). (Id.) The administrator will subtract the Plaintiffs' attorneys' fees and costs ($462, 000), and then subtract the Defendants' estimated portion of taxes on the wage half of the settlement. (Id.) The new estimated revised maximum gross settlement amount will then be divided by the total workdays worked by all members of the class. The result of this division is an estimated dollar amount to be allocated for each workday. (Ex. A) The administrator will then calculate the final award to each class member by multiplying the dollar amount for each workday times the number of workdays that each class member actually worked (indicated on the claim forms that class members submit to the administrator). (Id.)
III. Legal Analysis
The Plaintiffs pursue four claims against Defendants. Count 1 seeks recovery under the Fair Labor Standards Act ("FLSA"), 29 U.S.C. §§ 201-19, for a failure to pay straight time wages. (Compl. ¶ 239) Count 2 seeks recovery for overtime wages, also under FLSA. (Id.) The Plaintiffs seek this recovery as part of a collective action, pursuant to § 216(b). (Compl. ¶ 240) Count 3 seeks recovery of straight time wages under the New Jersey Wage and Hour Law ("NJWHL"), N.J.S.A. 34:11-56a, and Count 4 seeks recovery of overtime wages under the NJWHL. (Compl. ¶ 242) The Plaintiffs seek class action certification pursuant to Federal Rule of Civil Procedure Rule 23 for Counts 3 & 4. (Compl. ¶ 243)
The parties now seek certification of both the class and FLSA collective action, and request this Court's preliminary approval of their proposed settlement.
A. Collective Action Certification
Under the FLSA, § 216(b) allows an employee to bring suit against his employer "for and on behalf of himself or themselves and other employees similarly situated." This provision enables a named plaintiff to represent a class of similarly situated employees in a "collective action, " similar to class actions governed under Rule 23. Id . Unlike class action suits, any employee wishing to join a FLSA collective action must file a written consent to join in the action and be bound by the collective action judgment. Id.
The typical FLSA certification process occurs in two stages: a preliminary certification at the outset of a case, and a final certification at the close of discovery. Camesi v. Univ. of Pittsburgh Med. Ctr., 724 F.3d 239, 242-43 (3d Cir. 2013); Zavala v. Wal-Mart Stores, Inc., 691 F.3d 527, 535-37 (3d Cir. 2012). Preliminary certification imposes a "fairly lenient standard" to demonstrate that the proposed opt-in plaintiffs are similarly situated. Zavala, 691 F.3d at 536 n.4. On final certification, courts determine whether the plaintiff and opt-in plaintiffs are similarly situated by considering all relevant circumstances, including but not limited to:
[W]hether the plaintiffs are employed in the same corporate department, division, and location; whether they advance similar claims; whether they seek substantially the same form of relief; and whether they have similar salaries and circumstances of employment. Plaintiffs may also be found dissimilar based on the existence of individualized defenses.... This list is not exhaustive, and many relevant factors have been identified. See 45C AM. JUR. 2D Job Discrimination § 2184 (listing 14 ...