Published on:

Named Class Action Plaintiffs Denied Incentive Award Even Though Overtime Claims Settle for $3.7 Million

When a class of plaintiffs wins their class action lawsuit against their defendant, or the case settles outside of court, it is common practice for the named plaintiffs to receive at least a few thousand dollars each, in addition to their share of the award or settlement amount. This extra share is known as an incentive award and is meant to encourage potential plaintiffs to file class action lawsuits against large defendants, which tend to be large corporations that have much more leverage than the plaintiffs, both in business and in the courts.

But a Florida judge recently refused the incentive awards for the six named plaintiffs who filed a class action overtime lawsuit against their former employer, Hartford Fire Insurance Co. Despite the fact that he approved the rest of the $3.7 million to settle the legal dispute, U.S. District Judge Roy B. Dalton said the plaintiffs had not submitted sufficient evidence to show that the named plaintiffs had significantly contributed to the case or taken any serious risks.

Of course, risk is always involved anytime anyone files a lawsuit, despite corporate claims that class actions unfairly benefit plaintiffs because the vast majority of them settle outside of court. Although many class action lawsuits do settle before reaching the trial stage, there is never a guarantee that the parties involved will be able to reach an agreement before going to trial, and once a case does go to trial, no one can ever predict with perfect accuracy which side a jury will favor.

Despite the loss of their incentive awards, the judge’s approval of the rest of the settlement agreement is undoubtedly a victory for the six named plaintiffs, as well as the 43 class members they were representing.

The lawsuit was filed over allegations that the claims analysts working for Hartford regularly worked more than forty hours a week, but Hartford allegedly refused to pay them the proper overtime compensation for those extra hours. Under the federal Fair Labor Standards Act (FLSA), overtime is defined as any time spent working after eight hours a day or forty hours a week. The FLSA also requires employers to pay all their hourly, nonexempt workers one and one-half times their normal hourly rate for all overtime worked.

The FLSA does allow certain classes of employees to be held exempt from the overtime requirement, but it is very specific about the requirements employees need to meet in order to be legally exempt from overtime wages. Despite the clear guidelines provided by the FLSA, misclassifying employees in order to avoid paying them overtime has become all too common in corporate America.

Whether Hartford’s claims analysts met the qualifications for the overtime exemption will never be settled for sure because both parties have chosen to settle the case rather than argue their points before a jury.

Of the $3.7 million Judge Dalton approved, $1 million will go to pay the plaintiffs’ attorneys’ fees and legal costs and approximately $27,000 will cover litigation costs, leaving about $2.65 million in actual compensation to the plaintiffs for their alleged unpaid overtime. The amount each individual plaintiff will receive will vary depending on each plaintiff’s situation, but most of them are set to receive at least $20,000 each.

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 Hoffman Estates and Schaumburg We protect unpaid workers who haven’t received overtime throughout the Chicago area including in DuPage, Kendall, Lake, McHenry, Kane and Cook Counties.

Our North Chicago and Gurnee 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.