Deloitte FLSA Lawsuit

----

JUDGE SWEET

1 2470 IN THE UNITED STATES DISTRICf COURT

FOR THE SOUTHERN DISTRICT OF NEW YORK

MICHELLE GERMAN Individually and on Behalfof All Others Similarly Situated

Plaintiff Civ Action No

-against-

DELOITIE LLP DELOITIE amp TOUCHE LLP DELOITTE SERVICES LP and DELOITTE CONSULTING LLP Jointly and Severally

Defendants

NATURE OF THE ACTION

1 Plaintiff was an information technology support technician (IT Support

Technician) and trainer for Defendants (collectively Deloitte) in their offices in New York

County New York Plaintiff brings this action to recover unpaid overtime wages owed to her

pursuant to both the Fair Labor Standards Act (FLSA) 29 USC sect 201 et seq and the New

York Labor Law (NYLL) sect 650 et seq Plaintiff brings her FLSA claims on behalf of

herself and all other similarly situated employees of Defendants nationwide and her NYLL

claims on behalf of herself and a Federal Rule of Civil Procedure 23 class of IT Support

Technicians working in New York

roRISDICTION AND VENUE

2 This Court has subject matter jurisdiction over this matter pursuant to 28 U Sc

sectsect 1331 1337 and 1343 and supplemental jurisdiction over Plaintiffs state law claims

pursuant to 28 USC sect 1367 In addition the Court has jurisdiction over Plaintiffs FLSA

claims pursuant to 29 USC sect 216(b)

Case 112-cv-02470-RWS Document 1 Filed 040212 Page 1 of 15

3 Venue is proper in this district pursuant to 28 USC sect 1391

4 This Court is empowered to issue a declaratory judgment pursuant to 28 USC

sectsect 2201 and 2202

THE PARTIES

5 Plaintiff Michelle German (German or Plaintiff) was at all relevant times

an adult individual residing in Bergen County New Jersey Throughout the relevant time

period German worked for Defendants in their corporate offices located in New York County

New York German consents in writing to be a party to this action pursuant to 29 USc sect

216(b) and her written consent form is attached hereto and incorporated by reference

6 Upon information and belief Defendant Deloitte LLP is a Delaware corporation

licensed to conduct business in New York with a global corporate headquarters at 1633

Broadway New York NY 10019

7 Upon information and belief Defendant Deloitte amp Touche LLP is the former

name of Deloitte LLP Upon information and belief through in or around 2008 Defendant

Deloitte amp Touche LLP was a Delaware corporation licensed to conduct business in New

York with a corporate headquarters at 1633 Broadway New York NY 10019

8 Upon information and belief Defendant Deloitte Services LP is a Delaware

corporation headquartered at 4022 Sells Drive Hermitage TN 37076 licensed to conduct

business in New York with a corporate office at 2 World Financial Center New York NY

10281

9 Upon information and belief Defendant Deloitte Consulting LLP is a Delaware

corporation licensed to conduct business in New York with a corporate headquarters at 1633


2


COLLECTIVE ACTION ALLEGATIONS

10 Pursuant to 29 U Sc sectsect 206 207 and 216(b) Plaintiff brings her First Cause of

Action as a collective action under the FLSA on behalf of all IT Support Technicians andor

other employees performing level II IT support (the Collective Action Members or the

Collective Action) who are or were employed by any Defendant in the United States at any

time since April 2 2009 and through the entry of final judgment in this case (the Collective

Action Period)

11 A collective action is appropriate in this circumstance because Plaintiff and the

Collective Action Members are similarly situated in that they were all subjected to

Defendants illegal policies of failing to pay overtime and misclassifying their IT Technicians

as exempt As a result of those policies Plaintiff and the Collective Action Members did not

receive the legally required overtime premium payments for all hours worked in excess of forty

(40) per week

CLASS ALLEGATIONS - NEW YORK LABOR LAW

12 Pursuant to the NYLL Plaintiff brings her Second Cause of Action under Rule

23 of the Federal Rules of Civil Procedure on behalf of herself and all IT Support Technicians

andor other employees performing level IT IT support (the Class Members or the Class)

who are or were employed by Defendants in New York at any time since April 2 2006 through

the entry of final judgment in this case (the Class Period)

13 The Class Members are so numerous that joinder of all members is

impracticable

14 Although the precise number of such persons is unknown to Plaintiff the facts

on which the calculation of that number can be based are presently within the sole contr01 of

3


Defendants

15 Upon infonnation and belief there are well in excess of forty (40) Class

Members

16 There are questions of law and fact common to the claims of Plaintiff and the

claims of the Class inc1uding whether Defendants had a corporate policy of failing to pay

overtime premiums when employees worked in excess of forty (40) hours per week andor

corporate policy of misc1assifying IT Support Technicians as exempt from overtime

17 Plaintiffs claims are typical of the Class Members claims and Plaintiff will

fairly and adequately represent the Class There are no conflicts between Plaintiff and the

Qass Members and Plaintiffs counsel are experienced in handling c1ass litigation

18 The Second Cause of Action is properly maintainable as a class action under

Federal Rule of Civil Procedure 23(b )(3) There are questions of law and fact common to the

Qass that predominate over any questions solely affecting individual Class Members

including but not limited to

a whether each Defendant was an employer of the Class Members within the

meaning of the NYLL

b whether Defendants had a policy of failing to pay overtime for all hours worked

in excess of forty (40) per week

c whether Defendants had a policy of misclassifying their IT Support Technicians

as exempt from overtime

19 A class action is superior to other available methods for the fair and efficient

adjudication of this controversy-particularly in the context of this case where individual

plaintiffs lack the fmancial resources to vigorously prosecute a lawsuit in federal court against

4


corporate defendants The individual members of the class have no interest or capacity to

bring separate actions Plaintiff is unaware of any other litigation concerning this controversy

it is desirable to concentrate the litigation in one case and there are no likely difficulties that

will arise in managing the class action

STATEMENT OF FACTS

20 At all relevant times Defendants have been and continue to be employers

engaged in interstate commerce andor the production of goods for commerce within the

meaning of the FLSA 29 USc sectsect 206(a) and 207(a)

21 Upon information and belief at a11 relevant times the Defendants had gross

revenues in excess of $50000000

22 At all relevant times Defendants employed andor continue to employ Plaintiff

and each Collective Action Member within the meaning of the FLSA 29 USc sect 203(d)


and each Class Member within the meaning of the NYLL sectsect 2 and 651

24 At all relevant times Defendants have been in the professional services

industry According to their website httpwwwdeloittecom Defendants employ

approximately 182000 people in more than 150 countries throughout the world delivering

services in audit tax consulting and financial advisory

25 Plaintiff German was employed by Defendants from approximately February

101997 through January 31 2012 (the German Employment Period)

26 German was initially hired as a help-desk analyst whereby she perfonned level

I IT support in Defendants office at the World Financial Center in New York City In or

around 1998 German was transferred to Defendants office in Parsippany New Jersey where

5


she worked as a help-desk analyst until in or around 1999 German returned to Defendants

offices in New York in 1999 at wbich time she became an IT Support TechniCian providing

level II walk-up andor desktop support German was then promoted to IT Support

Technician Supervisor in or around 2002 As a Supervisor German oversaw the work of

approximately 7 IT Support Technicians in Defendants offices at 1633 Broadway New York

NY 10019 Approximately one year later in or around 2003 German left her position as a

Supervisor and returned to being an IT Support Technician in Defendants offices at 2 World

Financial Center German remained in her position as an IT Support Technician performing

level II IT support until her separation from Defendants in January 20121 Throughout the

German Employment Period German also participated in training Defendants new hires

regarding among other things Deloittes software specifications and technology

requirements

27 Thoughout the German Employment Period German typically worked at least

five days per week between at least eight (8) and twelve (12) hours per day for a total of

between forty (40) and sixty (60) hours per week and sometimes much more Initially

German was typically scheduled to work from 800am to 500pm or from 900am to 600pm

but would often times work well beyond her scheduled shifts to complete a computer support

task In or around 2009 Defendants implemented three separate shifts which were upon

information and belief designed to provide relief to the IT Support Technicians who were

working very long hours providing IT support for the entire support day IT Support

Technicians including Plaintiff German and the members of the Class would thereafter rotate

every three months between the following three schedules 900am to 600pm 400pm to

1 Plaintiff German was on disability leave and unable to work for Defendants from approximately January 31 2011 until she was terminated on January 31 2012

6


1200am and 1200pm to 900pm Notwithstanding the fact that German and Defendants

other IT Support Technicians were scheduled to work these shifts they frequently worked well

in excess of their scheduled shifts

28 Throughout the Gennan Employment Period German was required to record

her hours into Defendants SAP system which would track the time that German provided

support for a particular computer Gennan would enter her hours spent performing IT support

for Defendants clients and would print out her time sheet each week to be approved by her

manager Regardless of the number of hours German spent performing IT support or

conducting trainings as long as it was more than 40 hours German would only received her

weekly salary

29 IT Support Technicians including Plaintiff German and the members of the

Class were required to work at least 40 hours each week to earn their salary In the event that

an IT Support Technician did not work at least 40 hours in a week Defendants required the IT

Support Technician to use personal time to bring their weekly hours to the 40 hour minimum

For example if an IT Support Technician had to miss a day of work they would use 8 hours of

accrued personal time to ensure that their weekly hours would equal to 40 for the weeks

paycheck

30 Throughout the German Employment Period Gennan was paid on a salary

basis based on a 40 hour work week When German began working for Defendants in 1997

she earned approximately $44000 per year After receiving several raises throughout her time

working for Defendants German earned approximately $74400 in her final full-year of

employment with Defendants Despite the fact that she typically worked in excess of 40 hours

per week Gennan never earned wages or overtime premium compensation for the hours

7


worked in excess of 40 hours in a week Defendants failure to pay German overtime

premiums for work performed in excess of 40 hours in a week is a corporate policy of

Defendants to classify their IT Support Technicians as exempt notwithstanding the fact that

these employees primarily perform non-exempt work for Defendants

31 Throughout Germans time as an IT Support Technician and trainer German

performed mainly breakfix work on the Defendants clients computers Internally the IT

Support Technicians performed level II IT support based on a three level support system

Level I IT support refers to Defendants help-desk analysts who in or around 2006 were

upon information and belief moved or outsourced to India As a result Defendants IT

Support Technicians provide the first level of in-person support to Defendants clients in

Defendants offices in the United States Defendants level II IT support is divided into

walk-up support for laptops and desktop support for desktop computers Defendants IT

Support Technicians including Plaintiff German and the members of the Class rotated between

walk-up and desktop support performing the same breakfix duties for laptops desktops and

printers Defendants level III IT support refers to the higher-level computer workers

including advanced computer technicians and computer engineers

32 Throughout Germans time as an IT Support Technician German performed her

IT support tasks pursuant to preexisting formulas methodologies and scripts which were

imbedded in Defendants systems and were created by level III IT support professionals

Germans primary responsibilities as an IT Support Technician were non-exempt duties

including among other things replacing hardware including keyboards mouse and monitors

adding software troubleshooting programs backing up programs and client information

deployment and computer backup imaging When German and Defendants other IT Support

8


Technicians were presented with a computer-related issue they first had to create a ticket for

the computer so that it can be tracked by Defendants systems Depending on what type of

problem the ticket was created to address the ticket would list certain possibilities for the IT

Support Technician to test out in order to resolve the problem If the problem was unable to be

resolved at that time the IT Support Technician was required to research the problem in

Defendants database which contained solutions to common computer-related problems If the

problem was still not resolved the IT Support Technician was required to speak with their

supervisor for additional guidance regarding possible search terms or areas of the database that

may provide the solution In the event that the computer problem was still not fixed the IT

Support Technician would report this to their supervisor who would direct the IT Support

Technician to send the ticket to a higher level of escalation level III Throughout this entire

process the IT Support Technician is unable to exercise independent judgment but is instead

required to research certain computer troubleshooting possibilities in Defendants database of

solutions or to consult with their supervisor for guidance

33 Throughout the German Employment Period German also conducted certain

computer-related trainings for Defendants new hires German and Defendants other trainers

were required to train Defendants new hires regarding Deloittes software computer

specifications and requirements pursuant to a preexisting training skit The training skit was

developed by the head trainers and it instructed German and the other trainers as to what to say

and how to conduct the new hire trainings Defendants employees at all levels of IT support

perform trainings for Defendants new hires

34 German and Defendants other trainers performed trainings outside of their

regularly scheduled shifts including on nights and weekends without receiving any extra

9


compensation or overtime premiums when the trainings were performed during weeks where

Defendants trainers worked more than 40 hours

35 Despite the fact that she regularly worked more than forty (40) hours per week

through the German Employment Period German was never paid at overtime rates for all

hours worked beyond forty (40)

36 The work performed by German was performed in the normal course of

Defendants business and was integrated into the business of Defendants

37 The work performed by German required little skill and no capital investment

38 The work performed by German did not require the exercise of independent

business judgment

39 Plaintiff and Defendants other IT Support Technicians primary job duties did

not consist of the application of systems analysis techniques and procedures including

consulting with users to determines hardware software or system functional specifications


not consist of the design development documentation analysis creation testing or

modification of computer systems or programs including prototypes based on and related to

user or system design specifications


not consist of the design documentation testing creation or modification of computer

programs related to machine operating systems or a combination of the duties set forth in

Paragraphs 39 through 41

42 Defendants have simultaneously employed other individuals like Plaintiff

during the Class Period and Collective Action Period and continuing until today to perform

10


work as IT Support Technicians and other employees providing level II IT support As

stated the exact number of such individuals is presently unknown but within the sole

knowledge of Defendants and can be ascertained through appropriate discovery and is

believed to be in excess of 40

43 like Plaintiff Defendants other employees were required to work in excess of

forty (40) hours per week yet Defendants failed to pay these other employees overtime

compensation for hours worked in excess of forty (40) hours per week This refusal to pay

overtime compensation for hours worked in excess of forty (40) in a given week was a

corporate policy of Defendants that applied to all of Defendants other IT Support Technicians

and other employees providing level II IT support

44 Upon information and belief throughout the Collective Action Period and the

Class Period Defendants failed to maintain accurate and sufficient time records reflecting the

hours worked and payments received by Plaintiff and Defendants other employees

FIRST CAUSE OF ACTION FAIR lABOR STANDARDS ACT - UNPAID OVERTIME

45 Plaintiff on behalf of herself and the Collective Action Members repeats and

realleges each and every allegation of the preceding paragraphs hereof with the same force and

effect as though fully set forth herein

46 By failing to pay overtime at a rate not less than one and one-half times themiddot

regular rate of pay for work performed in excess of forty (40) hours per week Defendants have

violated and continue to violate the FLSA 29 USc sectsect 201 et seq including 29 USC sectsect

207(a)(I) and 215(a)(2)

47 Defendants also violated the FLSA overtime rights of the Plaintiff and the

11


members of the Collective Action because they did not perform duties necessary for the

executive administrative or computer-worker exemptions to apply

48 The foregoing conduct as alleged constitutes a willful violation of the PLSA

within the meaning of 29 USC sect 255(a)

49 Defendants failure to pay overtime caused Plaintiff and the Class Members to

suffer loss of wages and interest thereon Plaintiff and the Class Members are entitled to

recover from Defendants their unpaid overtime compensation damages for unreasonably

delayed payment of wages liquidated damages reasonable attorneys fees and costs and

disbursements of the action pursuant to 29 U SC sect 216(b)

SECOND CAUSE OF ACIION NEW YORK LABOR LAW - UNPAID OVERTIME

50 Plaintiff on behalf of herself and the Class Members repeats and realleges each

and every allegation of the preceding paragraphs hereof with the same force and effect as

though fully set forth herein

51 Defendants willfully violated the Class Members rights by failing to pay

overtime compensation at a rate of not less than one and one-half times the regular rate of pay

for hours worked in excess of forty (40) per week in violation of the NYLL and regulations

promulgated thereunder

52 Defendants also violated the NYLL overtime rights of the Class Members

because they did not perform duties necessary for the executive administrative or computer-

worker exemptions to apply



12




disbursements of the action pursuant to NYLL sectsect 663(1) et al and 196-d

PRAYER FOR RELIEF

Wherefore Plaintiff on behalf of herself and all other similarly situated Collective

Action Members and Class Members respectfully requests that this Court grant the following

relief

a Designation of this action as a collective action on behalf of the Collective

Action Members and prompt issuance of notice pursuant to 29 USc sect 216(b)

to all putative Collective Action Members apprising them of the pendency of

this action permitting them to assert timely FLSA claims in this action by filing

individual Consents to Sue pursuant to 29 U SC sect 216(b) and appointing

Plaintiff and her counsel to represent the Collective Action Members

b Certification of this action as a class action pursuant to Fed R Civ P 23(b )(3)

on behalf of the Class Members appointing Plaintiff and her counsel to

represent the Class and ordering appropriate monetary equitable and injunctive

relief to remedy Defendants violations of the NYLL

c An order tolling the relevant statutes of limitations

d An order declaring that Defendants violated the FLSA

e An order declaring that Defendants violations of the FLSA were willful

f An order declaring that Defendants violated the NYLL

g An award of overtime compensation due under the FLSA and NYLL

h An award of liquidated andor punitive damages as a result of the Defendants

13


willful failure to pay overtime compensation pursuant to 29 USC sect 216 and

the NYLL

i An injunction against the Defendants and their officers agents successors

employees representatives and any and all persons acting in concert with

Defendants as provided by law from engaging in each of the unlawful

practices policies and patterns set forth herein

j An award of prejudgment and post-judgment interest

k An award of costs and expenses of this action together with reasonable

attorneys and expert fees and

1 Such other and further relief as this Court deems just and proper

DEMAND FOR TRIAL BY JURY

Pursuant to Rule 38(b) of the Federal Rules of Civil Procedure Plaintiff demands a trial

by jury on all questions of fact raised by the complaint

Dated New York New York Apri12 2012

PELTON amp ASSOCIATES PC

By e ~K-Brent E Pelton (BP 1055) Taylor B Graham (TG 9607) Attorney for Plaintiffs Individually and on Behalf of All Other Persons Similarly Situated 111 Broadway Suite 901 New York New York 10006 Telephone (212) 385-9700 Facsimile (212) 385-0800

14


March 2 2012 Page 7

CONSENT TO BECOME PARTY PWNTIFF

By my signature below I hereby authorize the filing and prosecution of centIaims in my name and on my behalf 10 contest Deloitte Services lP andor its owners offioers subsidiaries contractors managers shareholders andor affiliates If appJicentable based on their failure to pay overtime wage as requirCild under state andor federal law I authorize the filing of thiS consent in the actlon(s) ohallenging such conduct 1 authorize being named as the representative plaintiff in this action to make decisions on behalf of aU other plaintiffs concerning the litigation the method and manner Of conducting this litigation the entering of an agreement with flaintiffs counsel concerning attorneys fees and costs and all Qther matters psnaining to this lawsuit

~~~Ja- utA U1aeU~ COx v-uYt~ Signature Date Printed Name

eSe r-ued (~~LYfO-)AJ--i- PAy Rlq k+) dre 3~20iJ-


Case 112-cv-02470-RWS Document 28-1 Filed 032514 Page 1 of 16

IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK

MICHELLE GERMAN Individually and on Behalf of All Others Similarly Situated

Plaintiff

-against-

DELOITTE LLP DELOITTE amp TOUCHE LLP DELOITTE SERVICES LP and DELOITTE CONSULTING LLP Jointly and Severally

Defendants

ECF Case

12 Civ 2470 (RWS)

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il~~~~~~i~lj~~~)plusmnBtthIi [PR OSED] ORDER GRANTING PLAINTIFFS MOTION FOR FINAL APPROVAL

OF CLASS SETTLEMENT AND APPROVAL OF CLASS COUNSELS FEES AND COSTS

The above-captioned matter came before the Court on Plaintiffs Motion for Final

Approval of Class Settlement and Approval of Class Counsels Fees and Costs (Motion for

Final Approval) (Docket No

I Background and Procedural History

1 The parties proposed settlement resolves all claims in the action entitled Michelle

German v Deloitte LLP et al Civil Action No 12 Civ 2470 (RWS) (the Litigation) which is

currently pending before this Court

2 The Plaintiff in this action alleges that Defendants misclassified their information

technology support technicians (IT Support Technicians) as exempt from overtime and thus

failed to pay overtime premiums for the hours that they worked over 40 in a workweek in

violation of the Fair Labor Standards Act 29 USc sectsect 201 et seq (FLSA) and the New York

Labor Law (NYLL)


----~~----------------------


3 On April 2 2012 the Named Plaintiff commenced this action as a putative class

action under Fed R eiv P 23 and as a collective action under the FLSA The Named Plaintiff

is a former IT Support Technician for Deloitte who alleged that she and Defendants other IT

Support Technicians were misclassitied as exempt from overtime and thus not compensated

when they worked more than forty hours in a given workweek Defendants filed their Answer

on May 15 2012 wherein they disputed the material allegations and denied liability (See Doc

10) Deloitte asserted among other defenses that their IT Support Technicians were exempt

from receiving overtime pay (Id)

II Overview of Investigation and Discovery

4 Plaintiffs counsel has conducted extensive investigation and prosecution of the

claims in the lawsuit including but not limited to interviewing putative class members

reviewing and analyzing time and payroll data reviewing additional documents relating to the

Plaintiff and the work of Defendants IT Support Technicians fielding questions from potential

opt-in plaintiffs preparing for and attending a full-day mediation and engaging in extensive

settlement negotiations

5 Defendants also provided Plaintiff with a comprehensive spreadsheet containing

among other information the hourly wage rates and overtime hours recorded by each of the

nationwide class members throughout the relevant time period

III Settlement Negotiations

6 Over the course of approximately twelve (12) months of litigation the parties

engaged in informal and formal settlement negotiations Soon after Defendants filed their

Answer the parties agreed to engage in informal discovery to assist with settlement negotiations

The parties exchanged analyses of payroll information and damages calculations for the putative

2


Case 1 12-cv-024 70-RWS Document 28-1 Filed 032514 Page 3 of 16

class members and engaged in numerous settlement discussions After several rounds of

settlement discussions the parties agreed to attempt to resolve the litigation through the

assistance of a private mediator To that end the parties hired Linda R Singer of JAMS to assist

the parties at a full-day mediation session which was held on April 16 2012 After a full day of

negotiations the parties were able to reach an agreement on a settlement amount and several

other key terms

7 During the next several months the parties negotiated the remaining terms of the

settlement which were memorialized in a formal Settlement Agreement and Release

(Settlement Agreement) At all times during the settlement negotiation process negotiations

were conducted at an arms-length basis

8 The Settlement Agreement creates a fund of $1 50000000 to settle the Litigation

(the Settlement Fund or the Fund) The Fund covers class members settlement awards

service payments attorneys fees and costs and administration fees and costs

IV Preliminary Approval of Settlement and Dissemination of the Notice

9 On January 16 2014 the Court preliminarily approved the parties proposed class

settlement and authorized the issuance of Notice to Class Members (See Doc 27) The Court

also approved the New York Class Notice of Proposed Settlement of Class Action Lawsuit and

Fairness Hearing and the Nationwide Class Notice of Proposed Settlement of Class Action

Lawsuit and Fairness Hearing (together the Notices) and authorized the mailing ofthe Notices

to the Class Members (See id)

10 On January 27 2014 the Notices were mailed by the Settlement Administrator

via First Class Mail to the Class Members (Behring Decl 7) There were 330 Class Members

3



on the list provided to the Settlement Administrator by Defendants thirty-nine (39) in the NY

Class and two-hundred ninety-one (291) in the Nationwide Class (ld at ~ 5)

II The Notices advised Class Members of applicable deadlines and other events

including the Final Approval Hearing and how Class Members could obtain additional

information (Id at ~ 4)

12 The response to the Notices has been overwhelmingly positive None of the Class

Members submitted a Request for Exclusion and no Class Member objected to the Settlement

(ld at ~~ 9 10)

V Contributions of the Named Plaintiff

13 The Named Plaintiff was integral in initiating this class action and made

significant contributions to the prosecution of the litigation (Pelton Dec ~ 7) The Named

Plaintiff served the class by providing detailed factual information regarding her job duties and

hours worked and the job duties and hours worked of the class members assisting with the

preparation of the complaint helping to prepare and execute a declaration preparing for and

attending a full-day mediation and assuming the burden associated with being a named plaintiff

and assisting with litigation (ld at ~ 9)

14 Although depositions were not conducted the Named Plaintiff was ready to sit for

a deposition and to provide information to support her anticipated FLSA collective action and

Rule 23 class action motions

15 In addition the Named Plaintiff assumed other professional risks and burdens

16 Without the effort of the Named Plaintiff this case on behalf of the Class would

not have been brought and this settlement would not have been achieved Service Awards of

this type are commonly awarded in complex wage and hour litigation (ld at ~ 13)

4


Case 1 12-cv-02470-RWS Document 28-1 Filed 032514 Page 5 of 16

VI Final Approval of Class Settlement

17 On March 25 2014 the Named Plaintiff filed her Motion for Final Approval of

Class Settlement and Approval of Class Counsels Fees and Costs (Motion for Final

Approval) The Court held a fairness hearing on April 9 2014 Having considered the Motion

for Final Approval the supporting declarations the arguments presented at the fairness hearing

and the complete record in this matter for good cause shown the Court (i) grants final approval

of the settlement memorialized in the Settlement Agreement attached to the Pelton Decl as

Exhibit A (ii) approves the service payment to the Named Plaintiff (iii) approves an award of

attorneys fees and reimbursement of litigation expenses in the amount of $45000000 (30 of

the Settlement Fund) and (iv) approves payment to the Settlement Administrator of $4000000

from the Settlement Fund for their costs associated with administration of the settlement

18 Under Fed R Civ P 23(e) to grant final approval of a Settlement the Court

must determine whether the Proposed Settlement is fair reasonable and adequate In re Am

Intl Grp Inc Sec Litig 04 CIV 8141 DAB 2013 WL 1499412 (SDNY Apr 11 2013)

Fairness is determined upon review of both the terms of the settlement agreement and the

negotiating process that led to such agreement Frank v Eastman Kodak Co 228 FRD 174

184 (WDNY 2005) Courts examine procedural and substantive fairness in light of the strong

judicial policy favoring settlements of class action suits Massiah v MetroPlus Health Plan

Inc No ll-cv-05669 (BMC) 2012 WL 5874655 2 (EDNY Nov 20 2012) (Cogan J)

citing Wal-Mart Stores Inc v Visa USA Inc 396 F3d 96 116 (2d Cir 2005) A

presumption of fairness adequacy and reasonableness may attach to a class settlement reached

Unless otherwise indicated all Exhibits referred to in this Order are Exhibits to the Pelton Decl

5



in arms length negotiations between experienced capable counsel after meaningful discovery

Wal- Mart Stores 396 F3d at 116 (internal quotations omitted)

19 If the settlement was achieved through experienced counsels arms-length

negotiations [a]bsent fraud or collusion [courts] should be hesitant to substitute [their]

judgment for that of the parties who negotiated the settlement Massiah 2012 WL 5874655 at

2 citing In re Top Tankers Inc Sec Litig 06 Civ 13761 (CM) 2008 WL 2944620 at 3

(SDNY July 31 2008)(same) In evaluating the settlement the Court should keep in mind the

unique ability of class and defense counsel to assess the potential risks and rewards of litigation

a presumption of fairness adequacy and reasonableness may attach to a class settlement reached

in arms-length negotiations between experienced capable counsel after meaningful discovery

Id citing Clark v Ecolab Inc Nos 07 Civ 8623 04 Civ 4488 06 Civ 5672 2010 WL

1948198 at 4 (SDNY May 112010) The Court gives weight to the parties judgment that

the settlement is fair and reasonable Id (citations omitted)

A Procedural Fairness

20 It is clear from the history of the case that the parties reached this settlement only

after engaging in extensive investigation and informal discovery which allowed each side to

assess the potential risks of continued litigation and robust settlement discussions including a

full-day mediation under the direction of an experienced class action mediator Linda Singer of

JAMS The settlement was reached as a result of arms-length negotiations between

experienced capable counsel after meaningful exchange of information and discovery

B Substantive Fairness

21 In evaluating a class action settlement courts in the Second Circuit generally

consider the nine factors set forth in City ofDetroit v Grinnell Corp 495 F2d 448 463 (2d Cir

6



1974) The Grinnell factors are (I) the complexity expense and likely duration of the litigation

(2) the reaction of the class to the settlement (3) the stage of the proceedings and the amount of

discovery completed (4) the risks of establishing liability (5) the risks of establishing damages

(6) the risks of maintaining the class action through the trial (7) the ability of the defendants to

withstand a greater judgment (8) the range of reasonableness of the settlement fund in light of

the best possible recover and (9) the range ofreasonableness of the settlement fund to a possible

recovery in light of all the attendant risks of litigation Grinnell 495 F2d at 463 Because the

standard for approval of an FLSA settlement is lower than for a Rule 23 settlement Massiah

2012 WL 5874655 at 5 satisfaction of the Grinnell factor analysis will necessarily satisfy the

standards of approval of the FLSA settlement All of the Grinnell factors weigh in favor of

granting final approval of the Settlement Agreement

22 Litigation through trial would be complex expensive and long Therefore the

first Grinnell factor weighs in favor of final approval

23 The response to the settlement has been positive All of the Class Members have

remained in the settlement (Behring Decl ~ 9) and no Class Member has objected to the

settlement terms (Id at ~ 10) The fact that the vast majority of class members neither objected

nor opted out is a strong indication of fairness Wright v Stern 553 F Supp 2d 337 344-45

(SDNY2008) (approving settlement where 13 out of 3500 class members objected and 3

opted out) see also Willix v Healthfirst Inc No 07 Civ 1143 2011 WL 754862 at 4

(EDNY Feb 182011) (approving settlement where only 7 of2025 class member submitted

timely objections and only 2 requested exclusion) Thus this factor weighs strongly in favor of

approval

7



The parties have completed enough discovery to recommend settlement The proper question is

whether counsel had an adequate appreciation of the merits of the case before negotiating

Warfarin 391 F3d at 537 The pretrial negotiations and discovery must be sufficiently

adversarial that they are not designed to justify a settlement [but] an aggressive effort to

ferret out facts helpful to the prosecution of the suit In re Austrian 80 F Supp 2d at 176

(internal quotations omitted) The parties discovery here meets this standard Class Counsel

interviewed several current and former employees of Deloitte to gather information relevant to

the claims in the litigation obtained reviewed and analyzed a comprehensive spreadsheet of

employment data for all of Defendants IT Support Technicians throughout the United States

(Pelton Dec ~ 14) Plaintiffs also reviewed hundreds of pages of hard-copy documents from

Plaintiff German and other current and former employees including but not limited to time and

payroll records employee personnel files e-mail correspondence and employee lists (Id)

24 The risk of establishing liability and damages further weighs in favor of final

approval A trial on the merits would involve risks because Plaintiffs would have to defeat

Defendants arguments that the Plaintiffs were exempt from overtime Specifically Defendants

would argue that the FLSA and NYLL overtime requirements do not apply to the class members

because they are employees employed in positions that are exempt including the administrative

and computer employee exemptions (pursuant to 29 USC sect 213(a)) Furthermore Plaintiff

would have to prove that these claims are appropriate for class certification under Rule 23 and

collective treatment under 29 U SC sect 216(b) which Defendants would strongly oppose Even if

such a class was certified Plaintiff would have to establish that the class and collective actions

should remain certified for trial Litigation inherently involves risks Massiah 2012 WL

8



5874655 at 4 The settlement alleviates this uncertainty See In re Ira Haupt amp Co 304 F

Supp 917 934 (SDNY 1969)

25 The risk of maintaining the class status through trial is also present The Court has

not yet conditionally certified the FLSA collective action or certified the Rule 23 state law class

and the parties anticipate that such determinations would be reached only after further discovery

and intense exhaustive briefing by both parties In arguing against collective action certification

Defendants will likely argue that Plaintiff was not similarly situated to other IT Support

Employees working in the office that she worked in New York let alone offices throughout the

United States In arguing against class certification Defendants will likely argue that the number

and variety of individualized questions the IT Support Technicians job duties the number of

hours worked the types of locations where they performed different tasks and other similar

questions preclude class certification If Plaintiffs ultimately prevail in obtaining conditional

certification ofthe FLSA collective action or Rule 23 class certification Defendants would likely

move to de-certify the collective action and seek permission to file an interlocutory appeal under

Federal Rule of Civil Procedure 23(f) Settlement eliminates the risk expense and delay

inherent in this process Massiah 2012 WL 5874655 at 5

26 Defendants ability to withstand a greater judgment is not currently at issue Even

if the Defendants can withstand a greater judgment a defendants ability to withstand a greater

judgment standing alone does not suggest that the settlement is unfair Frank 228 FRD at

186 (quoting In re Austrian 80 F Supp 2d at 178 n9) This factor does not hinder granting

final approval

27 The substantial amount of the settlement weighs strongly in favor of final

approval The determination whether a settlement is reasonable does not involve the use of a

9



mathematical equation yielding a particularized sum Frank 228 FRD at 186 (WDNY

2005) citing In re Austrian and German Bank Holocaust Litig 80 F Supp 2d at 178 and In re

Michael Milken and Assocs Sec Litig 150 FR-D 5766 (SDNY 1993) Instead there is a

range of reasonableness with respect to a settlement-a range which recognizes the uncertainties

of law and fact in any particular case and the concomitant risks and costs necessarily inherent in

taking any litigation to completion Moreover when a settlement assures immediate payment

of substantial amounts to class members even if it means sacrificing speculative payment of a

hypothetically larger amount years down the road settlement is reasonable under this factor

Massiah 2012 WL 5874655 at 5 (citations omitted) The eighth and ninth Grinnell factors favor

final approval

VII Approval of the FLSA Settlement

28 The Court hereby approves the FLSA settlement

29 Because the standard for approval of an FLSA settlement is lower than for a

Rule 23 settlement Massiah 2012 WL 5874655 at 5 satisfaction of the Grinnell factor

analysis will necessarily satisfy the standards of approval ofthe FLSA settlement

30 Courts approve FLSA settlements when they are reached as a result of contested

litigation to resolve bone fide disputes See Diaz v E Locating Servo Inc No 10 Civ 4082

2010 WL 5507912 at 6 (SDNY Nov 29 2010) deMunecas v Bold Food LLC No 09 Civ

4402010 WL 3322580 at 7 (SDNY Aug 23 2010) Typically courts regard the adversarial

nature of a litigated FLSA case to be an adequate indicator of the fairness of the settlement

Lynns Food Stores Inc v Us 679 F2d 1350 at 1353-54 (11th Cir1982) If the proposed

settlement reflects a reasonable compromise over contested issues the Court should approve the

settlement Id at 1354 Diaz 2010 WL 5507912 at 6 deMunecas 2010 WL 3322580 at 7

10


Case 112-cv-02470-RWS Document 28-1 Filed 032514 Page 11 of16

31 The Court finds that the FLSA settlement was the result of contested litigation

and arms-length negotiation and that the settlement terms are fair and appropriate

VIII Dissemination of Notice

32 Pursuant to the Preliminary Approval Order Notice was sent by first-class mail to

each identified class member at his or her last known address (with re-mailing of returned

Notices) (Behring Dec 78) The Court finds that the Notices fairly and adequately advised

Class Members of the terms of the settlement as well as the right of Class Members to opt out of

the class to object to the settlement and to appear at the fairness hearing conducted April 9

2014 Class Members were provided the best notice practicable under the circumstances The

Court further finds that the Notices and distribution of such Notices comported with all

constitutional requirements including those of due process

XI Award of Fees and Costs to Class Counsel and Award of Service Award to Named Plaintiff

33 Class Counsel did substantial work identifying investigating prosecuting and

settling the Named Plaintiffs and the Class Members claims

34 Class Counsel have substantial experience prosecuting and settling employment

class actions including wage and hour class actions and are well-versed in wage-and-hour law

and in class action law

35 The work that Class Counsel have performed in litigating and settling this case

demonstrates their commitment to the Class and to representing the Classs interests

36 The Court hereby awards Class Counsel $45000000 in attorneys fees and

expenses or thirty percent (30) of the fund

37 The Court finds that the amount of fees requested is fair and reasonable using the

percentage-of-recovery method which is consistent with the trend in this Circuit See

II



McDaniel v Cty OSchenectady 595 FJd 411417 (2d Cir 2010) Wal-Mart Stores Inc v

Visa USA Inc 396 F3d 96 121 (2d Cir2005) Sewell v Bovis Lend Lease Inc No 09 Civ

6548 2012 WL 1320124 at 13 (SDNY Apr 16 2012) (following percentage-of-the-fund

method) Willix 2011 WL 754862 at 6 (same) Diaz 2010 WL 5507912 at 7-8 Clark 2010

WL 1948198 at 8-9 (same) Reyes v Buddha-Bar NYC No 08 Civ 2494 2009 WL 5841177

at 4 (SDNY May 28 2009) (same) Strougo ex reI Brazilian Equity Fund Inc v Bassini

258 F Supp 2d 254 261-62 (SDNY 2003) (collecting cases adopting the percentage-of-theshy

fund method) In re NASDAQ Market-Makers Antitrust Litig 187 FRD 465 483-85 (SDNY

1998) (same)

38 In wage-and-hour class action lawsuits public policy favors a common fund

attorneys fee award See Toure v Amerigroup Corp 10 Civ 53912012 WL 3240461 at 5

(EDNY Aug 6 2012) Sewell 2012 WL 1320124 at 13 Willix 2011 WL 754862 at 6

Where relatively small claims can only be prosecuted through aggregate litigation private

attorneys genera] play an important role Deposit Guar Natl Bank v Roper 445 US 326

338-39 (1980) Attorneys who fill the private attorney general role must be adequately

compensated for their efforts If not wage and hour abuses would go without remedy because

attorneys would be unwilling to take on the risk Goldberger v Integrated Res Inc 209 FJd 43

51 (2d Cir 2000) (commending the general sentiment in favor of providing lawyers with

sufficient incentive to bring common fund cases that serve the public interest) Adequate

compensation for attorneys who protect wage and hour rights furthers the remedial purposes of

the FLSA and the NYLL Sewell 2012 WL 1320124 at 13 Willix 2011 WL 754862 at 6

deMunecas 2010 WL 3322580 at 8 see also Khait v Whirlpool Corp No 06 Civ 6381 2010

WL 2025106 at 8 (EDNY Jan 20 20 I 0) (Adequate compensation for attorneys who

12



protect wage and hour rights furthers the remedial purposes of the FLSA and NYLL)

eposit445 US at 338-39

39 Class Counsels request for thirty percent (30) of the fund is reasonable and

consistent with the norms of class litigation in this circuit See eg Willix 2011 WL 754862

at 6-7 (awarding class counsel one-third of $7675000 settlement fund in FLSA and NYLL

wage and hour action) Toure 2012 WL 3240461 at 5 (awarding one-third of $4450000 in

wage and hour misclassification case) Courts in this Circuit have routinely granted requests for

one-third or more of the fund in cases with settlement funds similar to or substantially larger than

this one See eg Clark 2010 WL 1948198 at 8-9 (awarding class counsel 33 of$6 million

settlement fund in FLSA and multi-state wage and hour case) Khatt 2010 WL 2025106 at 8-9

(awarding class counsel 33 of$925 million settlement fund in FLSA and multi-state wage and

hour case) Westerfield v Wash Mut Bank Nos 06 Civ 2817 08 Civ 0287 2009 WL

5841129 at 4-5 (EDNY Oct 8 2009) (awarding 30 of $38 million fund in nationwide

overtime suit) Mohney v Shellys Prime Steak No 06 Civ 4270 2009 WL 5851465 at 5

(SDNY Mar 31 2009) (awarding 33 of $3265000 fund in FLSA and NYLL tip

misappropriation case) Stefaniak v HSBC Bank USA No 05 Civ 720 2008 WL 7630102 at 3

(WDNY June 28 2008) (awarding 33 of$29 million settlement) A fee of23 of the fund

is reasonable and consistent with the norms of class litigation in this circuit Willix 2011 WL

754862 at 7 (internal quotation marks omitted)

40 Class Counsel Class Counsel risked time and effort and advanced costs and

expenses with no ultimate guarantee of compensation A percentage-of-recovery fee award of

thirty percent (30) is consistent with the Second Circuits decision in Arbor Hill Concerned

Citizens Neighborhood Association v County ofAlbany 493 FJd 110 111-12 (2d Cir 2007)

13



amended on other grounds by 522 FJd 182 (2d Cir 2008) where the Court held that a

presumptively reasonable fee takes into account what a reasonable paying client would pay

While Arbor Hill is not controlling here because it does not address a common fund fee petition

it supports a thirty percent (30) recovery in a case like this one where Class Counsels fee

entitlement is entirely contingent upon success Toure 2012 WL 3240461 at 6 Willix 2011

WL 754862 at 7 Diaz 2010 WL 5507912 at 7 Clark 2010 WL 1948198 at 9

41 All of the factors in Goldberger v Integrated Res Inc 209 F3d 43 50 (2d Cir

2000) weigh in favor of a fee award ofthirty percent (30) ofthe fund

42 The Court also awards Class Counsel reimbursement of their litigation expenses

in the amount of $732900 which is included as a portion of the thirty percent (30) of the fund

awarded to Class Counsel

43 The attorneys fees awarded and expenses reimbursed totaling thirty percent

(30) ofthe settlement fund shall be paid from the settlement

44 The Court finds reasonable a service award to the Named Plaintiff in the amount

of $1000000 This amount shall be paid from the settlement Such service awards are common

in class action cases and are important to compensate plaintiffs for the time and effort expended

in assisting the prosecution of the litigation the risks incurred by becoming and continuing as a

litigant and any other burdens sustained by plaintiffs See Toure 2012 WL 3240461 at 5

(EDNY Aug 6 2012) (approving service awards of $10000 and $5000) Sewell 2012 WL

1320124 at 14-15 (finding reasonable and approving service awards of$15000 and $10000 in

wage and hour action) Reyes 2011 WL 4599822 at 9 (approving service awards of$15000 to

three class representatives and $5000 to fourth class representative in restaurant case

challenging tip and minimum wage policies) Willix 2011 WL 754862 at 7 (approving service

14



awards of $30000 $15000 and $7500) Torres2010 WL 5507892 at 8 (finding reasonable

service awards of $15000 to each of 15 named plaintiffs) Khait 2010 WL 2025106 at 9

(approving service awards of$15000 and $10000 respectively in wage and hour class action)

see also Roberts v Texaco Inc 979 F Supp 185 200-01 (SDNY 1997) (The guiding

standard in determining an incentive award is broadly stated as being the existence of special

circumstances including the personal risk (if any) incurred by the plaintiff-applicant in becoming

and continuing as a litigant the time and effort expended by that plaintiff in assisting in the

prosecution of the litigation or in bringing to bear added value (eg factual expertise) any other

burdens sustained by that plaintiff in lending himself or herself to the prosecution of the claims

and of course the ultimate recovery)

X Conclusion and Dismissal

45 The parties shall proceed with the administration of the settlement in accordance

with the terms of the Settlement Agreement

46 The entire case is dismissed on the merits and with prejudice with each side to

bear its own attorneys fees and costs except as set forth in the Settlement Agreement This Final

Order and Judgment shall bind and have res judicata effect with respect to all FLSA Collective

Action Members and all Rule 23 Class Members who have not opted out of the applicable

classes

47 The Court approves the release of the released claims which shall be binding on

the Class Members who have not opted out ofthe class

48 Neither this Order Settlement Agreement nor any other documents or

information relating to the settlement of this action shall constitute be construed to be or be

admissible in any proceeding as evidence (a) that any group of similarly situated or other

15



employees exists to maintain a collective action under the FLSA or a class action under Rule 23

of the Federal Rules of Civil Procedure or comparable state law or rules (b) that any party has

prevailed in this case or (c) that the Defendants or others have engaged in any wrongdoing

49 Without affecting the finality of this Final Order the Court will retain jurisdiction

over the case following the entry of the Judgment and Dismissal until 30 days after the end of the

time for class members to cash their settlement check has expired as defined in the Settlement

Agreement The parties shall abide by all terms of the Settlement Agreement and this Order

50 This document shall constitute a judgment for purposes of Rule 58 of the Federal

Rules of Civil Procedure

a-It is so ORDERED this L day of April 2014

Et6I~~~ bert W Sweet United States District Judge

16


3 Venue is proper in this district pursuant to 28 USC sect 1391

4 This Court is empowered to issue a declaratory judgment pursuant to 28 USC

sectsect 2201 and 2202

THE PARTIES

5 Plaintiff Michelle German (German or Plaintiff) was at all relevant times

an adult individual residing in Bergen County New Jersey Throughout the relevant time

period German worked for Defendants in their corporate offices located in New York County

New York German consents in writing to be a party to this action pursuant to 29 USc sect

216(b) and her written consent form is attached hereto and incorporated by reference

6 Upon information and belief Defendant Deloitte LLP is a Delaware corporation

licensed to conduct business in New York with a global corporate headquarters at 1633


7 Upon information and belief Defendant Deloitte amp Touche LLP is the former

name of Deloitte LLP Upon information and belief through in or around 2008 Defendant

Deloitte amp Touche LLP was a Delaware corporation licensed to conduct business in New

York with a corporate headquarters at 1633 Broadway New York NY 10019

8 Upon information and belief Defendant Deloitte Services LP is a Delaware

corporation headquartered at 4022 Sells Drive Hermitage TN 37076 licensed to conduct

business in New York with a corporate office at 2 World Financial Center New York NY

10281

9 Upon information and belief Defendant Deloitte Consulting LLP is a Delaware

corporation licensed to conduct business in New York with a corporate headquarters at 1633


2








Action Period)






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meaning of the NYLL








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Supp 917 934 (SDNY 1969)



















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Supp 917 934 (SDNY 1969)



















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Supp 917 934 (SDNY 1969)



















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Supp 917 934 (SDNY 1969)



















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Supp 917 934 (SDNY 1969)



















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Supp 917 934 (SDNY 1969)



















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final approval














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16




















classes






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16














16


Documents

Deloitte FLSA Lawsuit