Fastenal Settlement of Overtime Case Accepted

SAN FRANCISCO (CN) - A federal judge signed off on a settlement for three disgruntled Fastenal employees after the parties assuaged her concerns about the fairness of the deal.

Kristopher Deane, Michael Romano and Lisa Johnson sued Fastenal - which employs more than 10,000 at 2,600 locations nationwide - in 2010, claiming the fastener distributor intentionally misclassifies employees as exempt to avoid paying overtime.

After U.S. District Judge Yvonne Gonzalez Rogers conditionally certified the suit as a class action in 2011 - and decertified it in 2012 - the parties agreed to release future claims in exchange for an undisclosed sum and a confidentiality provision.

But in a tentative November 2013 ruling, Rogers said the small amount of information provided to her about the terms of the highly confidential settlement made it impossible for her to approve.

Rogers took issue with the lack of evidence that the settlement amount adequately compensated the employees for overtime and lost meal and rest breaks. The judge also noted that federal courts do not look well upon resolutions of federal labor actions containing confidentiality clauses because they contravene legislative intent.

Fastenal and the employees quickly took Rogers up on her offer to clarify the agreement. That filing omits specific dollar amounts but acknowledges that Fastenal would aggregate the employees' lost wages and divide payment equally between them.

Given the wide variety of executive tasks that employees perform, any number of exemptions could apply that would have undermined the employees' claims, Fastenal said.

"In fact, had plaintiffs chosen to pursue their claims, they would be taking a substantial risk of recovering nothing at all," the clarification stated. "Worse, they could have been responsible for Fastenal's fees and costs, an outcome which would have been financially devastating."

Attorneys for the employees also endorsed the settlement as fair and reasonable, leading the judge to approve it last week.

Hannah Salassi of the firm Scott Cole & Associates in Oakland, Calif., represented the employees. Fastenal was represented by A. Craig Cleland, Evan Moses and Erica Rocush from Ogletree Deakins.

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