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Chavez v. Excel Services Southeast, Inc.

United States District Court, D. Colorado

July 27, 2015

NANCY CHAVEZ, MARGARITA HERRERA, and ANA MARIA PEINADO-NOVOA, on behalf of themselves and all others similarly situated, Plaintiffs,
v.
EXCEL SERVICES SOUTHEAST, INC., EXCEL SERVICES NETWORK, INC., and JAMES DAVID SAXTON, Defendants.

ORDER GRANTING JOINT MOTION FOR APPROVAL OF SETTLEMENT AGREEMENT AS STIPULATED FINAL JUDGMENT

CHRISTINE M. ARGUELLO UNITED STATES DISTRICT JUDGE

In their Motion, the parties jointly request that the Court approve their settlement of this Fair Labor Standards Act (“FLSA”) Collective Action. (Doc. # 75.) The Court finds that the Settlement Agreement was negotiated at arm’s length and is a fair, equitable, and reasonable resolution of a bona fide dispute in contested litigation. Accordingly, as discussed in further detail below, the Court grants the instant Motion.

I. BACKGROUND

Plaintiffs are former employees of Defendants Excel Services Southeast and Excel Services Network (“Excel”), which operate two cleaning companies in the Denver metropolitan area. Plaintiffs were residential cleaners for Excel and allege that Excel failed to pay them requisite minimum and overtime wages over a three-year period (between December 6, 2010 and December 6, 2013). (Doc. # 1, ¶ 1.) Specifically, Plaintiffs allege that Excel’s compensation method – whereby employees received a flat percentage formula of the gross revenue billed to each cleaning client (from 16% to 25%), rather than an hourly wage – violated the FLSA in a few ways. (Id., ¶ 2.) First, this payment was not properly augmented to account for an overtime premium when Plaintiffs worked over forty hours in a single work week, nor did Excel pay supplementary wages to assure that employees were paid the minimum wage. (Id., ¶ 4.) Second, Plaintiffs were not paid for compensable time spent traveling between locations during their work day. (Id., ¶ 3.) Plaintiffs further allege that Defendants should be liable for liquidated damages for these unpaid wages. (Id., ¶ 130.)[1]See 29 U.S.C. § 216(b) (providing that “Any employer who violates the provisions of section 206 or section 207 of this title shall be liable to the employee or employees affected in the amount of their unpaid minimum wages, or their unpaid overtime compensation, as the case may be, and in an additional equal amount as liquidated damages.”)

In September of 2014, the Court granted Plaintiffs’ Motion to certify the case as a “collective action” under 29 U.S.C. § 216(b), defining the employee-class as “[a]ll current and former cleaners employed by Defendants between December 6, 2010 and December 6, 2013 who were paid a flat percentage of gross revenue and/or were not paid for time spent traveling between work sites during the work day.” (Doc. # 37.) Following this initial certification of the Plaintiff class, Plaintiffs issued notice to potential class members and eleven additional Plaintiffs opted in to the case. (Doc. ## 36, 38, 50, 53, 54, 56, 57.)

A. CALCULATION OF ESTIMATED DAMAGES: NAMED REPRESENTATIVE PLAINTIFFS

Because of Defendants’ record-keeping practices, the number of hours worked by Plaintiffs is a central point of factual dispute in this action. Specifically, Excel’s employees completed a “Daily Cleaning Sheet, ” recording the number of hours each cleaner spent at a particular location performing cleaning work. However, these Daily Cleaning Sheets did not record the time Plaintiff-employees spent traveling between work locations, nor did they account for the time spent between 7:30 AM – the time Plaintiff-employees typically reported to Excel’s office to pick up keys, supplies, and their cleaning assignments for the day – and their arrival at the first cleaning location.[2] Excel also maintained a “Weekly Pay Sheet” for its employees, which listed the clients a particular Plaintiff-employee serviced in the course of his or her work week, but did not reflect the raw number of hours he or she worked. As such, in an attempt to reconstruct the number of hours actually worked, Plaintiffs’ counsel examined the 572 available[3]“Daily Cleaning Sheets” for the three named representative Plaintiffs and added the number of hours listed on those sheets for each given work week to reflect the (partial) number of hours worked. Counsel also calculated the travel time spent by the representative Plaintiffs by using Google Maps’ estimated travel times between one customer’s billing address and the second customer’s billing address.[4] (Doc. # 75 at 6.)

Using this method, Plaintiffs’ counsel estimates that named representative Plaintiff Nancy Chavez worked 269.61 hours of overtime between December 6, 2010 and December 6, 2013. Because she was paid on a piece rate rather than hourly basis, her regular rate of pay varied weekly, ranging between $7.28 per hour to $12.84 per hour. 29 C.F.R. § 788.111 (calculating the regular rate of pay of piecerate workers). As such, she claims to have lost an estimated $1, 277.64 in unpaid overtime wages over the three year period (assuming that her work day is deemed to begin at 7:30 AM). She claims an equal amount in liquidated damages under 29 U.S.C. § 216(b), for a total of $2, 555.29.

Similarly, named representative Plaintiff Herrera worked for Defendant during 141 workweeks covered by this lawsuit. Based on the methodology explained above, Plaintiffs estimate that she worked 732.96 hours of overtime between December 6, 2010 and December 6, 2013. As she was paid on a piece rate rather than hourly basis, her regular rate of pay varied weekly, ranging between $7.82 per hour to $14.40 per hour. 29 C.F.R. § 788.111 (calculating the regular rate of pay of piecerate workers). As such, she claims to have lost an estimated $3, 894.49 in unpaid overtime wages over the three year period (assuming that her work day is deemed to begin at 7:30 AM). She also claims an equal amount in liquidated damages under 29 U.S.C. § 216(b), for a total of $7, 788.98.

Lastly, named representative Plaintiff Pienado-Novoa worked for Defendant during 132 workweeks covered by this lawsuit. Based on the methodology explained above, Plaintiffs estimate that she worked 895.08 hours of overtime over the three year period between December 6, 2010 and December 6, 2013. Because she was paid on a piece rate rather than hourly basis, her regular rate of pay varied weekly, ranging between $8.24 per hour to $12.71 per hour. 29 C.F.R. § 788.111 (calculating the regular rate of pay of piecerate workers). As such, she claims to have lost an estimated $4, 382.24 in unpaid overtime wages (assuming that her work day is deemed to begin at 7:30 AM). She also claims an equal amount in liquidated damages under 29 U.S.C. § 216(b), for a total of $8, 764.49.

Plaintiffs agreed to settle their claims in exchange for 45% of their maximum possible damages (assuming a 7:30 AM start time) or for 74% of their damages (assuming the work day is deemed to begin when cleaning commenced). Accordingly, named representative Plaintiff Chavez would receive $574.94 in unpaid overtime and $574.94 in liquidated damages; Plaintiff Herrera would receive $1, 752.52 in unpaid overtime and $1, 752.52 in liquidated damages; and Plaintiff Pienado-Novoa would receive $1, 972.01 in unpaid overtime and $1, 972.01 in liquidated damages. (Doc. # 75 at 9-13.) Additionally, the Settlement Agreement provides that the named Plaintiffs will each receive an incentive award of $1, 000.00. (Doc. # 75-2 at 2.)

B. CALCULATION OF ESTIMATED DAMAGES: OPT-IN PLAINTIFFS

Pursuant to the calculations described above, Plaintiffs’ counsel determined that named representative Plaintiffs Chavez, Herrera, and Pienado-Novoa worked, on average, 4.73 hours of overtime per week and were owed, on average, $21.16 in lost overtime wages.[5] For the purposes of settlement, Plaintiffs’ counsel valued the claims of the eleven opt-in Plaintiffs by applying these weekly averages to the number of weeks each opt-in Plaintiff worked during the period covered by the lawsuit. Plaintiffs have agreed to settle their claims in exchange for 45% of their maximum possible damages (assuming a 7:30 AM start time) or for 74% of their damages (assuming the work day began when their cleaning duties actually commenced at a job site).

Accordingly, each opt-in Plaintiff would receive $9.52 for each week worked during the period covered by the lawsuit, plus an additional amount of $9.52 per week in liquidated damages, for a total of $19.04 per week. The following table summarizes each of the ...


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