A federal judge has granted final approval of a $7.8 million settlement agreement in two overtime pay class action lawsuits against Avis Budget Car Rental LLC.
In September 2015, U.S. District Judge Sandra L. Townes deferred approval of the class action settlement, saying she wanted more detail about how the funds would be apportioned.
The Avis class action lawsuit was reassigned to U.S. District Judge Eric N. Vitaliano, who referred the proposed settlement to Magistrate Judge Steven M. Gold to recommend changes.
Judge Vitaliano signed off on the agreement after adopting changes recommended by Magistrate Judge Gold in March 2016. The final class action lawsuit settlement allots $2.5 million to plaintiffs’ counsel, instead of the $2.6 million originally requested. Judge Vitaliano also trimmed the incentive awards for the three named plaintiffs from $15,000 each to $5,000 each.
Also in September 2015, Judge Townes denied Avis’s request to make the terms of the settlement unavailable on the federal court documents website.
Resolving Overtime Pay Claims Under the FLSA
Both actions had been brought by groups of Avis shift managers, alleging the company had shorted them overtime pay by misclassifying them as being exempt from protections under the Fair Labor Standards Act, or FLSA.
The managers sought compensation for unpaid overtime for all hours worked over 40 per week.
The first of these two wage and hour actions was filed in a New York federal court in May 2008. Plaintiffs there alleged Avis were owed unpaid overtime due to the company’s systematic failure to pay them correctly.
After the collective was finally certified in 2010, about 200 other plaintiffs opted in to the lawsuit.
Based on depositions, Avis tried to have the collective decertified in 2013. The company argued that the shift managers weren’t all in the same alleged situation and therefore did not have the unity of interest required to maintain the action as a collective.
Magistrate Judge Gold denied Avis’s requests in 2015, however, citing evidence in the same depositions that showed a “substantial similarity” among the different shift managers, since Avis’s policy towards them appeared consistent throughout the U.S.
The second Avis overtime pay collective action began in 2011 in a federal court in New Jersey. Those plaintiffs alleged Avis misclassified the managers as supervisory personnel who would not be eligible for overtime pay.
The New Jersey case was transferred to New York in June 2015 so that settlement negotiations for both cases could be handled together.
A collective action is a procedural device used to bring an FLSA wage and hour claim on behalf of a large number of claimants. Collective actions are similar to class actions, which are often used to bring large products liability lawsuits.
The main difference is that in an FLSA collective action, prospective plaintiffs must affirmatively opt in to participate. If they do not opt in to the collective, they will not be represented by it.
The two Avis overtime pay lawsuits are filed under case numbers 1:08-CV-02113 and 1:15-CV-03618 in the U.S. District Court for the Eastern District of New York.
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