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Settlement of UPS Wage and Hour Class Action Reached

When two parties agree to settle a legal dispute outside of court, it can be mutually beneficial for both parties, but they have to prove to the judge that both parties benefit equally from the agreement. One of the ways they do that is by including a complaint along with their proposed settlement agreement. The lawsuit cannot be considered settled until a court judge has issued both preliminary and final approval of the terms of the settlement agreement.

In a recent class action wage and hour lawsuit against UPS, in which 32,332 seasonal workers allege the shipping company denied them wages and rest breaks under California law, the judge presiding over the case has refused to grant preliminary approval of their settlement until the plaintiffs file an amended complaint.

The proposed class involves thousands of workers who worked for UPS for at least 20 days during the busy holiday season of November and December. The wage and hour lawsuit alleges UPS allowed its seasonal workers to take rest breaks only when they worked shifts of four hours or longer. For every day an employee misses a break, for any reason, she is entitled to one hour’s worth of wages, in addition to all wages, tips, bonuses, etc. earned that day.

According to the original complaint filed by the plaintiffs, California labor law requires employers to provide their workers with one rest break lasting at least 10 minutes for every three and a half hours of work, 20-minute breaks for shifts lasting at least six hours, and half-hour breaks for longer shifts. For every day an employee misses a break, for any reason, she is entitled to one hour’s worth of wages, in addition to all wages, tips, bonuses, etc. earned that day.

The complaint also alleged UPS shorted its seasonal workers on wages by paying them for 3.5 hours of work for a mandatory training session that lasted 4.5 hours.

The wage and hour lawsuit further alleges that UPS violated labor laws and union dues by requiring the plaintiffs to return their uniforms on their own time after the busy holiday season had ended. Because the return of the uniforms directly benefited UPS, who owned the uniforms and had provided them to the workers in order to maintain its own brand recognition, the time spent returning the uniforms is time for which UPS should have compensated its workers.

UPS and the class of plaintiffs agreed to settle the wage and hour lawsuit for $1.6 million, which should provide at least $55.42 for each proposed class member who submits a valid claim. As much as $533,333.33 will go to pay the plaintiffs’ attorneys for their fees and a maximum of $48,000 will be approved for their legal costs.

The plaintiffs filed an amended complaint along with the proposed settlement agreement, but the judge is demanding more information on the amended claims before he will grant preliminary certification. For example, he wanted to know why the complaint had been amended to include claims the lead plaintiff had alleged in a different class action lawsuit filed against UPS, as well as claims for penalties under the California’s Private Attorney General Act (PAGA). An attorney for the plaintiffs said they added the PAGA claims because they wanted to be able to pursue them if the settlement was not approved.

Once the judge attains the requested information, he will be able to determine if the terms of the settlement are truly fair to both parties. If they are, he will approve the settlement, otherwise the attorneys will have to go back to the negotiating table or prepare for trial. 

The Chicago class action and employment law attorneys at the Chicago Overtime Law Center have three decades of experience fighting to help employees who are victims of wage, overtime and tip theft by their employers. We have a team of Chicago unpaid overtime lawyers who concentrate on prosecuting state and nationwide class action lawsuits. Our attorneys work out of Chicago and Oak Brook offices and pursue claims for workers all over the Chicago area including Cicero and Evanston. We protect unpaid workers who haven’t received overtime throughout the Chicago area including in DuPage, Kendall, Lake, McHenry, Kane and Cook Counties.

Our Rockford and Schaumburg overtime and employment lawyers are intimately familiar with the issues that arise during wage claim litigation, and we know the laws that govern overtime cases well. Many employers mis-classify employees as being exempt from overtime laws and pay workers salaries instead of hourly wages in order to avoid paying them overtime. Some employers mistakenly classify employees as exempt and others intentionally do so in order to circumvent the law. In either case, workers do not receive the wages they should, and a lawsuit may be the only way to recover their earned wages.

The Chicago Overtime Law Center is based in Chicago and Oak Brook, and represents clients throughout the country who have unpaid overtime and other employment right claims.