Settlement Delayed, Settlement Denied Part 2: The Truth About the Delay

Image courtesy of Renjith Krishnan/Freedigitalphotos.net

Click here for a newer update of the settlement as of June 20, 2011.


Important things you should know why there was a delay.

I have received some emails recently inquiring about why the distribution of the settlement has been delayed. For those of you who have called Rust Consulting and inquire about the cause(s) of the delay, you may be surprised that you only got little information.

But what really has happened?

Many of you are aware that the Court held a fairness hearing last January 28, 2011 where the Plaintiffs and their counsels have finally accepted the settlement offered by defendant RGIS LLC. Please refer to this previous post for a short summary of the delay. But it did not stop there. There were issues that have been raised including claimants' eligibility, among others. These issues must be addressed first before any distribution of settlement commences.

The truth is, March 25, 2011 was the court-approved date of final hearing. It was moved from January 28 to this date. That short window from January 18 until the March 25 final hearing was a period the court has allowed to settle all objections and issues related to the settlement. It was extended as per plaintiffs request. So the question now will be:

What cause(s) the delay?

First, the case of 538 unidentified opt-in members had to be determined their identities.
There were 538 individuals who submitted written opt-ins consenting to participate in the FLSA claims as party plaintiffs. However, after a thorough manual review of the thousands of opt-ins, RGIS had failed to identify their names in its employment databases and therefore did not receive the Notice of the Settlement. When RGIS had submitted the original claimants lists to Plaintiffs' lawyers and Rust Consulting on October last year, their names where not included in those lists and therefore were classified as unidentified claimants.

The cause could have been that these individuals have submitted the consent forms PRIOR to the Court-supervised notice process and therefore their names were omitted from earlier release of the settlement class members lists. Or that some of them may have obtained copies of the consent form from other legit members and mailed the completed forms thereafter. But RGIS had decided to include them as class members. The Court had granted Plaintiffs request that these opt-in members shall be given Notice of the Settlement.

Second, the case of 369 plaintiffs with "No Activity during the FLSA limitations period."
When RGIS provided plaintiffs' and Rust Consulting copies of the settlement class members list, the lists contain entries of 369 opt-ins which the defendant identifies as employees who had "no activity within the limitation period." Meaning, these 369 employees did not work or were not given work during and within the maximum FLSA cut-off dates and time payroll data had not been previously produced for these individuals. Therefore, they did not receive the Notice of the Settlement.

RGIS argues that these individuals are still members of the settlement class, but because they did not work any shifts during the maximum FLSA limitations period, they are not entitled to a monetary reward. However, both parties have agreed that they shall receive notices of the settlement but no longer entitled to a settlement award. Rust Consulting also sent out notices for these individuals and if they receive the notices by February 18, they should have sufficient time to object or request exclusion from it before the scheduled final hearing on March 25.

Third, the case where Plaintiffs' counsel had encountered difficulties in contacting each of the 25 named Plaintiffs and class representatives to obtain their declarations.
This, also caused the delay of the distribution of the settlement reward.

Therefore, the court had to wait for RGIS to finish verifying the identities of these individuals AND wait for the 907 additional opt-in members to receive their copies of the Notice of the Settlement and wait for them to give sufficient time to object or request exclusion from the settlement on or before the scheduled final approval hearing in March 25, and wait for the plaintiffs lawyers to contact the 25 named class representatives to obtain their declarations. The court expected that all these undertakings shall be settled prior to the March 25 deadline.

Now you know why the awarding of the settlement has been delayed. The next logical question will be:
What transpired at the court's final hearing on March 25? The answer is yet to be revealed by the court and the parties involved.

But one thing I am sure: The result of that March 25 final hearing determines whether we get our money on time or not. I am yet to contact Rust Consulting.

Note: The authors disclaim any legal representations of either of the parties involved. This update is for informational purpose only.

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