NY Judge Rejects Lowe’s Wage and Hour Settlement

A federal judge in New York recently rejected a proposed $4.5 million settlement offer to end a set of collective allegations from Lowe’s employees. The Lowe’s class action lawsuit alleges that the company failed to pay human resources managers overtime. While the judge thought the deal from the plaintiffs showed chutzpah, he found that overall the deal wasn’t fair or reasonable.

U.S. District Judge Jeremiah J. McCarthy denied the motion to approve a $3 million fund for the Class, and also rejected a $1.5 million fund to settle the plaintiffs’ attorneys fees. Judge McCarthy stated that the settlement terms contradicted the objective of the Lowe’s wage and hour lawsuit, and that the deal was not sufficient to support the entirety of the Class Members that would be paid.

When the class action settlement was first proposed on April 23, the plaintiffs’ attorney stated that he believed he was entitled to the full $1.5 million in fees, even if only one human resource manager chose to settle. Judge McCarthy denied this, stating that the deal would pay the attorney and not the actual plaintiffs.

Overview of Wage and Hour Allegations

The Lowe’s wage and hour class action lawsuit alleges that the home improvement chain and its executives systematically tried to misclassify human resources managers as exempt employees, disqualifying them from overtime payments despite the managers having worked more than 40 hours each week.

Lead plaintiffs Cynthia Augustyniak, Denise Giambrone, and Julie Glover allege that Lowe’s gave them positions with the title of ‘manager,’ despite the fact that their duties did not actually entail any managerial responsibilities. The plaintiffs claim that they had no hiring or firing power. The plaintiffs further allege that because of their managerial title, they were forced to work more than 40 hours a week without overtime pay.

Under the proposed deal, Lowe’s would pay up to $3 million for the Class of plaintiffs and $1.5 million in attorneys’ fees. Because the number of plaintiffs has increased since the wage and hour lawsuit was filed, the proposed $3 million settlement is now insufficient.

In an interesting twist, Judge McCarthy found that the parties were piggybacking on an earlier wage and hour lawsuit against Lowe’s that has already been settled. Additionally, the judge questioned the relevance of the lead plaintiffs’ FLSA allegations and found that the settlement opt-out option left limited avenues of legal recourse for plaintiffs who would choose an individual legal pursuit, ultimately leaving them “twisting in the wind.”

The Lowe’s Wage and Hour Class Action Lawsuit is Case No. 1:14-cv-00488, in the U.S. District Court for the Western District of New York.

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