There is a newer update of the case as of June 20, 2011:
When RGIS offered the $27Million settlement, the company thought that it is in the best interest for both parties. RGIS denies any liability and states that it is entering into the agreement to avoid incurring further litigation costs. I think this is the right thing to do in a defendant's point of view. When a settlement is being offered, both parties can avoid very expensive litigation costs, save precious time, etc. The litigation cost is a major aspect that influences a settlement.
In many settlement cases, the offending party is in the position to offer the settlement, not necessarily because it is in the best interest of both parties but because it is strategically advantageous to the offending party especially when after weighing the evidence, previous court rulings, and the existence of a previous ruling that would point a favorable to judgement to the offended party.
Let me elaborate my point here:
The RGIS lawsuit was resolved partially in favor of the plaintiffs, more than a year ago by the district court (Wren v. RGIS Inventory Specialists, No. C-06-05778, 2009 WL 2612307, (N.D. Cal. Aug. 24, 2009)). In its 2009 opinion, the district court held that RGIS' policy of not paying the plaintiffs for time donning inventory equipment at the start of the workday violated the FLSA. The plaintiffs’ donning of audit machines, handheld scanners and related equipment at the start of the workday “is an activity ‘performed pursuant to RGIS’ mandate, for RGIS’ benefit as an employer,’” The court then quoted the Alvarez v. I.B.P., Inc., 339 F.3d 894 (9th Cir. 2003) Supreme Court decision, and the donning time was “‘integral and indispensable’” to the RGIS hourly employees' principal activity of conducting physical inventories.
Furthermore, the court ruled that the RGIS’ policy of not compensating RGIS hourly employees for time spent waiting between their donning of the equipment and the beginning of their inventory-related work violated the FLSA because such time is compensable under the “continuous workday” rule. The continuous workday rule is the time that follows an employee’s performance of a principal activity at the start of the workday -- in this case, the donning of inventory equipment -- is compensable under the FLSA (see Alvarez v. I.B.P., Inc., 546 U.S. 21 (2005)).
Based on the opinion of the court, there is an FLSA violation. The court seemed to favor the offended party ( in this case, the RGIS hourly employees). So the natural recourse for the offending party (in this case, RGIS) IS to offer a settlement. That is a good legal move. But there is one question that needs to be settled:
Was the offer from RGIS a reasonable for the Plaintiff?
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| Image: renjith krishnan / FreeDigitalPhotos.net |
Was the number just magically pop out from nothing and became the basis for compensation? Or did it based on some mathematically feasible formula? Of course there is a basis for coming up such a number. In one side, settlement is computed based on the number of shifts an employee works for the employer, and the frequency of time that lapsed for donning an equipment (which may include wearing the Audit/RM machine, connecting scanner, testing just to make sure the equipment work, changing batteries if necessary, wearing belt bags, pocketing yellow tags, etc.) The other side, settlement may also had been determined based on the gravity of, or the extent of "pain" incurred by RGIS hourly employees. RGIS thought that $27 Million offer is reasonable enough to cover both donning time and employees' grief.
But, what exactly is a reasonable settlement? How do we differentiate between a reasonable, an excessive, or a ridiculous settlement? One might argue that being reasonable means being fair to the offended party. I assume that RGIS was simply negotiating the settlement using a bottom up strategy while the Plainitffs' attorneys are fighting the settlement from the maximum vantage point. I said this because it is a well known fact that most settlement amounts would be slightly lower and cheaper in comparison to the grant ruled by the court. Now, if we use this as a rule of thumb, then chances are, RGIS settlement offer is relatively lower than what should have been reasonable for the Plaintiffs.
And that is the reason why there will be another court hearing on January 2011 to give enough time for possible objections from the Plaintiff before the judge will sign the settlement. If there is no objection on the settlement as currently offered by RGIS on or before the next scheduled hearing on January 2011, then the offer IS reasonable. Judge Spero shall sign the final approval of the settlement on the date specified.
However, if majority of the class and/or Plaintiff's attorney object to the amount of settlement, then final approval of the settlement may be delayed.
Supreme Court ruling on IPB v. ALVAREZ:
- IPB, INC. v. ALVAREZ, individually and on behalf of all others similarly situated, et al.
- IPB, Inc. v. Alvarez opinion of the court
The preceded data are for informational purposes only. No warranty or fitness is implied. It does not solicit, constitute, endorse, or construed to have legal basis, implications, weigh, or merit to a particular case, or any case in dispute.
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BEING A EMPLOYEE OF RGIS FOR MORE THAN 3 1/2 YEARS AND ALSO DISCHARGED WRONGFULLY, I HAVE SEEN ALOT OF THING DONE THE WRONG WAY. ALTOGETHER I HAVE WORKED IN INVENTORY FOR 9 YEARS, WORKING FOR WIS AND ANOTHER SMALLER COMPANY ALSO. I WORKED AS A AUDITOR AND AS A TEAM LEADER. I WAS TOLD TO KEEP THE AUDITORS AS LITTLE TIME AS POSSIBLE AND TO FINISH UP MYSELF WITH ONE OTHER PERSON. I TRULY UNDERSTAND THE WAY IT ALL WORKS AND LET ME TELL YOU, THE AUDITORS WOULD REALLY BE BLOWN AWAY IF THEY ONLY KNEW THE AMOUNT THEY GET PAID FOR EACH AUDITOR AND WHAT THEY PAID THEM. THE PROFIT MARGIN IN OUTSTANDING.
ReplyDeleteI MYSELF, AS MOST OF US DO, NEED THE MONEY ASAP HOWEVER I WOULD LOVE TO SEE THEM TAKE THIS ONE ALL THE WAY. RGIS CAN SURELY AFFORD IT.
RGIS now is a billion-dollar company and expanding. The settlement amount is just a small fraction if we compare it with the company's earnings each year. It won't definitely hurt the company. But that's beside the point. The idea is: there is an FLSA violation even if RGIS has denied it on the contrary. And as such, responsible for its employees' compensation.
ReplyDeleteI AGREE MOST OF THE COMMENTS FROM EVERYBODY HERE. And I hope that RGIS will change for the better. Otherwise, such a practice will only invite more lawsuit to come. And the company wouldn't want to get into legal dispute again and spend millions of dollars.
I also hope that the final approval shall proceed on January as scheduled.
RGIS has for many years predicated its business model on exploiting its own work force and in finding creative ways to deny its own employees adequate compensation for their work. This trend was only accentuated by its recent acquisition by the Blackstone Group, which has created an illusion of improved profitability by slashing wages, benefits and compensation, and by reducing local office spaces, preparatory to taking the company public and paying itself a handsome management and consulting fee out of the proceeds of the IPO. That is a substantial part of why RGIS settled the lawsuit, as the IPO could not proceed while the potential expenses of the class action was still pending. Look for RGIS to go public in the next year, load up on debt, and then file for Bankruptcy in another 2-3 years.
ReplyDeleteI worked for rgis for almost 12 years, and when my mom passed away a year ago, I called the office from the hospital to ask them if they would get someone to cover the 6 stores I was scheduled for, because my mom had just passed away and they said they would. About 5 to 6 weeks later, I received a termination letter stating I was terminated because I failed to show up to the stores I was scheduled for. I was shocked. I looked in the hand book and it states that a person has up to 12 weeks off for personal matters. Maybe they did me a favor letting me go, because I wasn't happy working there the last 2 years. I think Everything changed for the worst instead of for the better.
ReplyDelete@anonymous, I hope to hell you fought them on that!
ReplyDeleteHas anyone heard anything about when ex employees would be getting their checks?
ReplyDeleteI was not aware that there was a lawsuit no one told me. How do I get my share of the settlement since I've worked for them since
ReplyDelete1993? I am still employed there but no one told me anything. Can you let me know what I need to do?