News Brief

Rocco and Kaplan Defeat Motion to Invalidate Out-of-Court Settlements in Wage-and-Hour Class Action Suit

January 25, 2019

Dean Rocco (Partner-Los Angeles) and Alex Kaplan (Associate-Los Angeles) represent a City in a collective action wherein a group of City employees are challenging its health benefit program, claiming the entire program was not bona fide given the number of employees who took cash in lieu of health benefits. They also seek unpaid overtime and related penalties claiming the City failed to include cash in lieu of payments into employees' regular rate of pay when calculating overtime. The City negotiated with attorneys for the employees' collective bargaining units and reached out-of-court settlements. The named plaintiff filed motions to invalidate those out-of-court settlements and get curative notice out to putative class members.

Under the FLSA, courts typically only recognize court-approved or Department of Labor approved settlement agreements, as employees are presumed to be at disadvantage bargaining with employers. Dean and Alex convinced the Central District Court of California to adopt their novel position, which is that it should recognize an out-of-court settlement reached between an employer and a union. They argued that the union could adequately represent the interests of its members so long as there were no miscommunications or coercive communications by the City directly to employees. The case will now proceed with approximately 9 putative class members as opposed to the nearly 280 threatened by class counsel.

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