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A trial court approved a revised settlement agreement of a collective action by employees of the Vermont Country Store (VCS) for violations of the Fair Labor Standards Act (FLSA). The court approved the agreement after the employees and VCS narrowed the release provisions to apply to employees’ claims of lost wages and benefits.
In a collective action brought under the FLSA, Doreen Forauer and other employees of VCS alleged that the company required them and other similarly-situated employees to perform certain duties before, during, and after their shifts for which they were not paid. The FLSA requires employers to pay employees at least the minimum wage for all hours worked.
The employees alleged VCS required both the telemarketing sales representatives and customer service representatives to complete "the same pre-shift and post-shift activities" off the clock. For example, the employees claimed that VCS required them to turn on and boot up their computers and relevant software programs before their shifts. The employees also claimed that VCS knew its employees were not being compensated for this additional work and that VCS did not have a process for employees to recover wages for time spent completing this additional work.
The parties agreed to settle the suit and filed a motion to approve the settlement agreement. According to the settlement agreement, VCS will pay a lump sum of $22,000. The agreement also included "a general release of all claims relating in any way to [each Plaintiffs] employment at VCS." The court held a fairness hearing and raised concerns about the scope of the general release in the settlement agreement. The parties agreed to amend the release provision to a release of "all claims of lost wages and benefits.”
The court noted that the settlement agreement was reached as a result of a "contested litigation" to resolve bona fide disputes-both factual and legal disputes that remain unresolved. The court also stated that because the employees were represented by counsel supports a further finding that they have accepted the settlement agreement without fear of overreaching by VCS because they were able to consult with counsel throughout discovery to identify and fully understand the strengths and weaknesses of their factual and legal claims. The court, therefore, granted the motion to approve the settlement agreement as amended by the parties' joint stipulation to revise the release provision.
Forauer v. The Vermont Country Store, Inc., D. Vt., No. 5:2012cv00276 (Jan. 16, 2014).
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