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Johnson v. Reuters

United States District Court, D. Minnesota

March 19, 2019

CHRISHAWN JOHNSON and GAVIN BRANDT, individually and on behalf of all similarly situated individuals, Plaintiffs,
v.
THOMSON REUTERS, doing business as FindLaw, Defendant.

          Christopher D. Jozwiak, Scott Moriarity, and Shawn J. Wanta, BAILLON THOME JOZWIAK & WANTA LLP, for plaintiffs.

          Susan E. Ellingstad, LOCKRIDGE GRINDAL NAUEN PLLP, for defendant.

          ORDER

          Patrick J. Schiltz United States District Judge.

         Plaintiffs Chrishawn Johnson and Gavin Brandt are the named plaintiffs in this collective action under the Fair Labor Standards Act (“FLSA”). They have asked the Court to approve a settlement between plaintiffs and defendant Thomson Reuters. ECF No. 50. For the reasons that follow, the settlement is approved, and plaintiffs' claims are dismissed.

         I. BACKGROUND

         Plaintiffs are Account Managers who work or formerly worked in the FindLaw division of Thomson Reuters. ECF No. 37 at ¶ 2. FindLaw Account Managers are generally responsible for “[e]nsur[ing] client retention and satisfaction” by providing “all clients” with “first class customer care.” ECF No. 1 at ¶¶ 10(a)-(b). Account Managers are also responsible for identifying and successfully pursuing various sales opportunities; in the jargon of their workplace, they “[i]dentify and provide up-sell and cross sell lead opportunities to field partners” and “[s]ecure contract renewals for [an] assigned portfolio of customers.” Id. at ¶¶ 10(d)-(e).

         Johnson and Brandt allege that Account Managers were improperly classified as exempt from the FLSA's overtime provisions prior to January 3, 2018, and thus were not paid overtime wages, even though they “regularly worked more than 40 hours each workweek.” Id. at ¶¶ 1-2, 12, 25. Instead, Johnson and Brandt allege, Account Managers received only “a base salary, non-discretionary incentive compensation, [and] participation in an employee incentive plan” (along with other “fringe benefits”). Id. at ¶ 11.

         On January 3, 2018, Thomson Reuters reclassified the Account Manager position as non-exempt and began paying overtime wages to Account Managers. Id. at ¶ 13. Thomson Reuters also offered to pay the Account Managers back pay for any overtime worked during the two years preceding January 3, 2018. Id. at ¶ 29. Thomson Reuters calculated each Account Manager's back-pay offer by multiplying the number of overtime hours reported by the Account Manager by one-half of the Account Manager's regular rate of pay. Id.

         Johnson and Brandt brought this action on behalf of themselves and similarly situated Account Managers because they believe that Thomson Reuters's offer fails to fully compensate them for the overtime compensation that they would have earned had they not been classified as exempt. Johnson and Brandt argue that Thomson Reuters's offer is insufficient for two main reasons: First, the offer does not include liquidated damages. Second, the offer does not pay for past overtime at 1.5 times the regular rate of pay. ECF No. 1 at ¶ 30.

         The parties agreed to conditional certification of the collective (ECF Nos. 35, 37), and all potential plaintiffs received notice of this action by email (ECF No. 37 at ¶ 6). Seventeen other Account Managers opted in to the litigation, joining Johnson and Brandt as plaintiffs. ECF Nos. 6-8, 10, 12, 14-15, 23, 31, 33, 39-45. One of those Account Managers subsequently opted out. ECF No. 47. Now, after informal discovery and a full-day settlement conference with Magistrate Judge Hildy Bowbeer, the parties have reached a settlement.

         The settlement calls for Thomson Reuters to pay a total of $120, 000 in liquidated damages to the FLSA collective. ECF No. 52-1 at 7. To reach that number, the parties took the number of overtime hours that the Account Managers reported working during the period from January 1, 2016, to December 31, 2017, multiplied that number by one-half of the regular rate of pay of the Account Managers, and added an enhancement of approximately one percent. ECF No. 52 at ¶ 6; ECF No. 51 at 3. The regular rate of pay was calculated using the Account Managers' base salaries plus non-discretionary incentive payments. ECF No. 51 at 6. In exchange for this payment of liquidated damages, the opt-in plaintiffs agree to waive “any and all past claims for overtime payment [they] may or do have against Thomson Reuters that accrued before September 13, 2018.” ECF No. 52-1 at p. 8, ¶ c. The settlement also calls for each named plaintiff to receive a service award of $5, 000 and for Thomson Reuters to reimburse $95, 000 of plaintiffs' attorney's fees and costs. Id. at p. 7, ¶¶ b-c.

         II. ANALYSIS

         A. Standard of Review

         The parties have asked the Court to approve their settlement.[1] The Court thus reviews the settlement to ensure that there is a bona fide dispute under the FLSA and that the settlement “is a fair and reasonable resolution of [that] bona fide dispute.” Lynn's Food Stores, Inc. v. United States, 679 F.2d 1350, 1355 (11th Cir. 1982); see also Stainbrook v. Minn. Dep't of Pub. Safety, 239 F.Supp.3d 1123, 1126 (D. Minn. 2017).

         B. The ...


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