Overtime Pay Class Actions
Overtime pay cases are often brought as class actions. If you are thinking of bringing an overtime pay class action, you should understand what is involved. In this post I will explain some of the basics.
Why are Overtime Pay Cases Brought as Class Actions?
Most overtime pay cases are brought as class actions. Class actions are used in overtime pay cases because each employees case by itself is often too small to justify the expense of a law suit. By grouping a bunch of people with similar claims together in one case, the value can be substantial and it makes the case economically viable for the law firm. The law firms typically do not charge their clients for any of the work they do on such a class action. Instead, the law firms are paid at the end of the case out of the money obtained by settlement or verdict. The lawyers' fee is usually determined by the judge but the fees typically range from 25% to 33% of the amount recovered. The overtime pay class actions are beneficial because they provide a way for lawyers to represent large groups of people with common claims without charging them any upfront costs. Many people with overtime pay issues are unable or unwilling to pay a lawyer by the hour and the contingency class action makes it possible for people to obtain legal services.
What is Needed to Bring an Overtime Pay Class Action?
A class action cannot be filed without a class representative who has a viable claim that is similar to the claims of others working for the same company. The class representatives are the people who start the case and put their names on the law suit. In many cases, the class representatives are people who have left the company and therefore are not worried about retaliation. At the end of the case, the class representatives are often paid a bonus or bounty that can range from $5,000 to $20,000 or more in certain cases but this is just a broad estimate of payments that I have seen - payments can be lower or higher. The point is that the law rewards people who come forward as class representatives.
How Does an Overtime Pay Class Action Work?
The first step is to file the case as a class action. Even though the case is filed as a class action, it is not really deemed a class action until it is certified as a class action by the court. After the case is filed, the lawyers for the employees will try to obtain evidence from the company that can be used to convince the judge that the case should be certified as a class action. This process is often called pre certification discovery. The lawyers will want to find out how many people were denied overtime pay, how much overtime pay is owed, what job descriptions were involved and how the employees were organized at the company. This information is needed to demonstrate that the claims are similar and that it makes sense to group everyone together into one case as a class action.
Once the pre certification information is obtained, the lawyers will then file a motion to have the case certified as a class action. The company will file a brief arguing against certification. It is not uncommon for a case to settle before the judge decides the motion because the company does not want the case to be certified as a class action. If the case does not settle and the judge certifies the case as a class action, the case will then move to the next phase. During the second phase, the lawyers will be focused on obtaining evidence and figuring out how to bring a large case to trial. Often creative techniques must be developed to present evidence efficiently. If the case involves hundreds or thousands of people with very similar claims, some kind of statistical sampling is often used to prove the case and establish the amount that class members lost in unpaid overtime. Taking class actions to trial is complicated and the various techniques used are far beyond the scope of this post.
How are Overtime Pay Class Actions Resolved?
Overtime pay class actions occasionally go to trial, but most of the time they settle. Since these cases involve many people and complicated procedural issues, the cases are often resolved with the help of an experience wage and hour mediator. Mediation is a voluntary process that is nothing more than an assisted negotiation process. The mediator does not decide the case or even take sides. The mediator is a neutral and helps the parties find common ground. Usually the mediation takes place at the mediator's office and the parties are in different rooms and the mediator goes back and forth between the rooms - similar to shuttle diplomacy. Mediation sessions can take an entire day or more. I recently had a class action mediation session go from 9 a.m. to 2.a.m. and it took several more days of back and forth phone calls to finally resolve the matter. But that is typical - the cases are complex with lots of moving parts and people so it takes time and patience to resolve them.
How Long Does it Take for an Overtime Pay Class Action to be Resolved?
Most of the overtime class actions that I have handled have been resolved within a year or two. A rough average is a year but that can vary. However, if the case goes to trial, then the case will take much longer. But once the case is settled between the parties, then the settlement has to be approved by the court and that can take several more months. Most courts will hold a fairness hearing to make sure that everyone received a fair settlement and then the money has to be divided up and sent to all of the class member. All of this takes more time. So it could be 18 months to two years before you receive your unpaid overtime.
If you have questions about an overtime case, please give us a call and we will help evaluate your potential case. There is no charge or obligation.
