Fix Secured Settlement Approval for Agilysys

(CN) - Tech firm Agilysys is closer to settling overtime claims after a federal judge ordered workers to drop a purported California class from their lawsuit.

Terrell Jones and five co-plaintiffs sued the Georgia-based company in San Jose, Calif., in July 2012.

The "installation specialists" claimed Agilysis misclassified them as exempt employees from 2009 to 2013 so that it could avoid paying them overtime wages as required by state and federal laws.

In their 2012 amended complaint, the sextet alleged violations of the Fair Labor Standard Act (FLSA), on behalf of a nationwide class, and violations of California Labor Code, on behalf of a California class.

Mediation led the parties to settle state and federal claims. The terms called for Agilysis to pay a gross settlement amount of about $1.5 million, which included attorneys' fees of no more than $375,000, about $25,000 in litigation costs, class-representative payments of up to $5,000 for each named plaintiff, $16,500 in administration expenses to Rust Consulting Inc., and a $25,000 Private Attorney General Act payment to the Labor and Workforce Development Agency.

An estimated 131 total current and former employees qualified for a share. Of this group, 117 are or were employed outside of California, and 14 are or were employed in the Golden State.

U.S. District Judge Saundra Brown Armstrong refused to grant the deal preliminary approval in August 2012, finding the plaintiffs sufficiently established a basis for conditional certification of a non-California class, but failed to satisfy the numerosity requirement for certification of a California class.

"In the instant case, plaintiffs have adequately demonstrated that the potential collective action members were subject to the same policy that resulted in Agilysis' failure to pay them wages to which they were lawfully entitled under the FLSA," the eight-page ruling stated.

"Given the small number of individuals for whom class certification is being sought, the court finds that plaintiffs' request to certify a California class must be rejected due to their failure to satisfy the numerosity requirement," she added.

"In sum, the court finds that plaintiffs have failed to carry their burden of demonstrating that conditional certification of a California class is appropriate in this case. Although the court has determined that conditional certification of the non-California FLSA class is warranted, the court cannot preliminarily approve the settlement because it is dependent upon approval of the California class as well."

The parties in turn amended the settlement to include only a single, nationwide class. Financial terms remained the same.

Armstrong granted the amended agreement preliminary approval and conditionally certified the nationwide class last week.

"Based on the record presented, the court finds the proposed settlement constitutes a fair and reasonable resolution of a bona fide dispute," Armstrong wrote. "The settlement resulted from arms-length, non-collusive negotiations overseen by a neutral mediator after the parties had exchanged a substantial amount of documents and information."

An estimated 127 class members stand to receive $79.98, before taxes, for each week worked during the class period, Armstrong said. Each employee who worked the entire period stands to receive a gross amount of approximately $15,287.61.

"In view of defendants' continuing denial of liability and assertion that it would have vigorously defended the action had plaintiffs litigated further, the court finds that the settlement represents a reasonable result, particularly in light of the risks and delay inherent in further prosecution of the action," Armstrong added.

Agilysys specializes in property, document and workforce management software.

A final approval hearing is slated for May 20.

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