Hurricane Sandy Workers Reach $1.1M Overtime Lawsuit Settlement

A federal judge in New York issued final approval on a settlement with employees of Prosource Technologies LLC, a disaster relief company, in the amount of $1.135 million.

The overtime lawsuit settlement affects employees who were hired to perform disaster relief work following Hurricane Sandy and who alleged that they were shorted on overtime pay.

U.S. Magistrate Judge Steven I. Locke approved the unpaid overtime lawsuit settlement that resolved claims made by Prosource workers that they were wrongly classified as exempt and did not receive proper overtime wages. Case managers, paralegals and case specialists were all included in the settlement.

The allegations claimed that Prosource did not pay the plaintiffs for hours worked above 40 in a given week, they improperly paid workers on a pro-rata basis of less than 40 hours per week, and Prosource allegedly neglected to provide appropriate pay and layoff notices.

The workers who received the unpaid overtime lawsuit settlement were hired by Prosource to help with relief efforts targeted in communities that were damaged from Hurricane Sandy, Hurricane Irene and Tropical Storm Lee. They were a part of New York’s Rising Program which was established to focus on the relief efforts.

“The court concludes that the settlement agreement is fair, reasonable, and adequate, and was reached as a result of arm’s-length negotiations between experienced, capable counsel after meaningful discovery and settlement negotiations,” the judge stated.

Overtime Lawsuit Settlement Details

Twelve plaintiffs originally filed the class action lawsuit against Prosource in April 2014. Their claim consisted of a collective action, a class action, and three subclasses that asserted allegations in the unpaid overtime lawsuit.

The collective action included a claim under the Fair Labor Standards Act for themselves and others who were employed as salaried individuals since April 18, 2011. The class action claims were asserted as a New York class of plaintiffs and similarly situated individuals during the class period.

There were three subclasses included in the unpaid overtime lawsuit: 1) a wage class of New York class members who did not receive a wage notice at the beginning of their employment with Prosource, as required by state law, 2) an overtime subclass of New York workers who were classified as exempt but were not paid for overtime, and 3) a Worker Adjustment and Retraining Notification Act subclass, consisting of New York members who had their employment terminated by Prosource from May 30, 2014 and July 9, 2014.

According to the complaint, on May 20, 2014, Prosource sent a notice to all of its 132 employees that they would be laid off by May 30, 2014, giving members 10 days notice or less, an alleged violation of the federal WARN Act requiring a 60-day notice to employees and the New York WARN Act which required a 90-day advance notice.

The unpaid overtime lawsuit settlement includes $3,500 for each of the 12 named plaintiffs in the case for their role as class representatives and 30% will be used for attorneys’ fees and litigation costs and expenses.

The remaining $740,600 of the overtime lawsuit settlement will be distributed to the settlement class, with 5% allotted for the wage subclass and another 20% allowed for the WARN Act subclass.

The Class is represented by Brent E. Pelton, Taylor B. Graham and Alison G. Lobban of Pelton Graham LLC.

The Prosource Unpaid Overtime Class Action Lawsuit is Hall et al. v. Prosource Technologies LLC, Case No. 2:14-cv-02502, in the U.S. District Court for the Eastern District of New York.

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