CINCINNATI (Legal Newsline) – The U.S. Court of Appeals for the Sixth Circuit has declined to dissolve a class action settlement regarding alleged violations of the Kentucky Wage and Hour Act.
Whitlock, David Skyrm, James Middleton and Kristin Moore, who were former
employees of Fourth Street Live, an entertainment area located in downtown
Louisville, filed a suit in Kentucky state court in 2010 against the defendants
FSL Management LLC, Entertainment Concepts Investors LLC and Cordish
Operating Ventures, LLC alleging “violations of the Kentucky Wage and Hour Act,
KRS § 337.385 for their policies regarding
off-the-clock work and mandatory tip-pooling,” court documents said.
The plaintiffs’ class
certification motion was granted by the court, then the defendants requested interlocutory appellate
review. This review was denied, along with their motion to reconsider. After
that, settlement discussions took place and the parties eventually reached
agreement on the financial terms.
About a year later, the parties finally agreed
on the non-monetary terms and the parties filed a joint status report informing
the court that they settled and that formal settlement documents would soon
follow, Jeremy Gilman, partner at Benesch Law, said in a blog post.
Gilman said the defendants then moved the district
court to decertify the class centered on the intervening Kentucky appellate
decision, which was then subject to a request for discretionary review at the
Kentucky Supreme Court. The district court then ruled to not decertify the
The Sixth Circuit said in court documents
that the lower court found that “regardless of the present meaning of” the
Kentucky Wage and Hour Act, it was “bound to maintain class certification and
enforce the settlement agreement as a binding contract under Kentucky law.” The
defendants then appealed to the Sixth Circuit.
“The appellants have failed
to make any argument explaining why the prohibition against class-action
litigation in KRS § 337.385(2) disturbs any of the class-certification
requirements set forth in Rule 23(a) or (b),” court documents said. “In fact,
the appellants seem to hope that this court will fill in the gaps on their
court declined to undo a settlement to which defendants had voluntarily agreed,”
Gilman told Legal Newsline.
The court of appeals affirmed and “conclude[d]
that a post-settlement change in the law does not alter the binding nature of
the parties’ settlement agreement, nor does it violate Rule 23 of the Federal
Rules of Civil Procedure or the Rules Enabling Act,” court documents said.
may [now] seek panel hearing and en banc review of the decision at the 6th
Circuit and, if unsuccessful, review by the United States Supreme Court,”
“The Sixth Circuit’s decision seems to have
been impacted by timing factors: the intervening Kentucky appellate
decision upon which defendants based their decertification motion was rendered
three weeks before the parties informed the trial court that they
had agreed to settle the case,” Gilman said.
“It remains for speculation
whether the outcome would have differed had the Kentucky court issued its
ruling three weeks after they had agreed to settle.”