FedEx settles class action over meal breaks for $2.1 million

By Kyla Asbury | Sep 24, 2014

SANTA ANA, Calif. (Legal Newsline) - FedEx has agreed to settle a class action lawsuit for $2.1 million after class members claimed it failed to provide California employees with meal break and rest periods.

The settlement agreement provides for $2.1 million as the gross settlement amount, according to the a settlement document filed Aug. 11 in the U.S. District Court for the Central District of California.

At least 70 percent of the net settlement amount will be paid to the class members. The remainder, if any, of the net settlement amount will be paid to a cy pres beneficiary.

"There is also a non-monetary component to this settlement," the document states. "Defendant as part of the settlement has agreed to clarify its meal and rest period policies, which adds a significant value to this settlement..."

The net settlement amount is the balance of the gross settlement amount after up to $700,000 for attorneys fees; up to $40,000 for attorney expenses and costs; up to $7,500 for the enhancement award to the representative plaintiff; the employer’s payroll taxes on the settlement shares; and the first $50,000 and any amount over $65,000 for administration of the settlement.

The class is defined as all persons employed by the defendant in California in the non-exempt position of package handler at any time during the period of time from Sept. 24, 2009 to Sept. 1. The class is estimated to have 15,790 members.

The net settlement amount will be paid out to all class members who timely submit a valid claim form.

"If the class members do not collectively claim at least seventy percent (70%) of the total net settlement amount, then they shall have their shares of the net settlement amount increased in relative proportion to the ratio used to initially calculate the class members' respective claim amounts, until at least 70% of the net settlement amount is paid."

In the event the class members' claims exceed 70 percent of the net settlement amount, then the actual amount claimed will be paid to the class members. No money shall revert to the defendant from the settlement.

Each class member’s claim amount shall be determined by a point system, whereby each class member is awarded one point for each workday of active employment worked during the class period, with an additional one point for each workday a class member worked more than one shift during the workday, and an additional 10 points awarded to each terminated employee.

Each class member’s points will then be divided by the total number of points for all class members, and the resulting fraction then multiplied by the net settlement amount, according to the settlement document.

On Sept. 24, 2013, Aaron Rangel filed his class action complaint in the Superior Court of the State of California-Orange County.

On Oct. 30, the plaintiff filed his first amended complaint. On Oct. 31, FedEx filed a petition for removal and related pleadings.

The plaintiff's lawsuit is a class action brought by a former employee of FedEx Ground Package System Inc. for claims including the failure to provide meal periods, failure to provide rest breaks, failure to pay minimum wages, failure to pay overtime, failure to pay vacation wages, failure to pay regular wages, failure to pay reporting time, failure to timely pay all wages owed at the time of termination of employment, record keeping violations and unfair business practices.

On Sept. 4, U.S. District Judge David O. Carter filed an order granting preliminary approval of the class action settlement.

Rangel is represented by Peter M. Hart and Travis Hodgkins of the Law Offices of Peter M. Hart and Kenneth H. Yoon of the Law Offices of Kenneth H. Yoon.

FedEx is represented by Ernest W. Klatte III, Summer Young-Agriesti and Selwyn Chu of Klatt, Budensiek & Young-Agriesti LLP.

A final approval and fairness hearing is scheduled for Jan. 12.

U.S. District Court for the Central District of California case number: 8:13-cv-01718

From Legal Newsline: Kyla Asbury can be reached at classactions@legalnewsline.com.

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