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JUDGE SWEET

Case 1:12-cv-02470-RWS Document 1

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2470

IN THE UNITED STATES DISTRICf COURT

FOR THE SOUTHERN DISTRICT OF NEW YORK

MICHELLE GERMAN, Individually and on


Behalf of All Others Similarly Situated,
Plaintiff,

Civ. Action No.

----

-againstDELOITIE LLP, DELOITIE & TOUCHE


LLP, DELOITTE SERVICES LP and
DELOITTE CONSULTING LLP, Jointly
and Severally,
Defendants.

NATURE OF THE ACTION


1.

Plaintiff was an information technology support technician ("IT Support

Technician") and trainer for Defendants (collectively "Deloitte") in their offices in New York
County, New York. Plaintiff brings this action to recover unpaid overtime wages owed to her
pursuant to both the Fair Labor Standards Act ("FLSA"), 29 U.S.C. 201 et seq., and the New
York Labor Law ("NYLL"), 650 et seq. Plaintiff brings her FLSA claims on behalf of
herself and all other similarly situated employees of Defendants nationwide, and her NYLL
claims on behalf of herself and a Federal Rule of Civil Procedure 23 class of IT Support
Technicians working in New York.

.roRISDICTION AND VENUE


2.

This Court has subject matter jurisdiction over this matter pursuant to 28 U .S.c.

1331, 1337, and 1343, and supplemental jurisdiction over Plaintiff's state law claims

pursuant to 28 U.S.C. 1367. In addition, the Court has jurisdiction over Plaintiff's FLSA
claims pursuant to 29 U.S.C. 216(b).

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3.

Venue is proper in this district pursuant to 28 U.S.C. 1391.

4.

This Court is empowered to issue a declaratory judgment pursuant to 28 U.S.C.

2201 and 2202.

THE PARTIES
5.

Plaintiff Michelle German ("German" or "Plaintiff") was, at all relevant times,

an adult individual residing in Bergen County, New Jersey.

Throughout the relevant time

period, German worked for Defendants in their corporate offices located in New York County,
New York. German consents in writing to be a party to this action, pursuant to 29 U.S.c.
216(b) and her written consent form is attached hereto and incorporated by reference.

6.

Upon information and belief, Defendant Deloitte LLP is a Delaware corporation

licensed to conduct business in New York, with a global corporate headquarters at 1633
Broadway, New York, NY 10019.
7.

Upon information and belief, Defendant Deloitte & Touche LLP is the former

name of Deloitte LLP. Upon information and belief, through in or around 2008, Defendant
Deloitte & Touche LLP was a Delaware corporation licensed to conduct business in New
York, with a corporate headquarters at 1633 Broadway, New York, NY 10019.
8.

Upon information and belief, Defendant Deloitte Services LP is a Delaware

corporation headquartered at 4022 Sells Drive, Hermitage, TN 37076, licensed to conduct


business in New York, with a corporate office at 2 World Financial Center, New York, NY
10281.

9.

Upon information and belief, Defendant Deloitte Consulting LLP is a Delaware

corporation licensed to conduct business in New York, with a corporate headquarters at 1633
Broadway, New York, NY 10019.
2

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COLLECTIVE ACTION ALLEGATIONS

10.

Pursuant to 29 U.S.c. 206, 207 and 216(b), Plaintiff brings her First Cause of

Action as a collective action under the FLSA on behalf of all IT Support Technicians and/or
other employees performing "level II" IT support (the "Collective Action Members" or the
"Collective Action"), who are or were employed by any Defendant in the United States at any
time since April 2, 2009 and through the entry of final judgment in this case (the "Collective
Action Period").
11.

A collective action is appropriate in this circumstance because Plaintiff and the

Collective Action Members are similarly situated, in that they were all subjected to
Defendants' illegal policies of failing to pay overtime and misclassifying their IT Technicians
as "exempt", As a result of those policies, Plaintiff and the Collective Action Members did not
receive the legally required overtime premium payments for all hours worked in excess of forty
(40) per week.

CLASS ALLEGATIONS - NEW YORK LABOR LAW


12.

Pursuant to the NYLL, Plaintiff brings her Second Cause of Action under Rule

23 of the Federal Rules of Civil Procedure on behalf of herself and all IT Support Technicians
and/or other employees performing "level IT" IT support (the "Class Members" or the "Class")
who are or were employed by Defendants in New York at any time since April 2, 2006 through
the entry of final judgment in this case (the "Class Period").
13.

The Class Members are so numerous that joinder of all members is

impracticable.
14.

Although the precise number of such persons is unknown to Plaintiff, the facts

on which the calculation of that number can be based are presently within the sole contr01 of
3

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Defendants.
15.

Upon infonnation and belief, there are well in excess of forty (40) Class

Members.
16.

There are questions of law and fact common to the claims of Plaintiff and the

claims of the Class, inc1uding whether Defendants had a corporate policy of failing to pay
overtime premiums when employees worked in excess of forty (40) hours per week; and/or
corporate policy of misc1assifying IT Support Technicians as exempt from overtime.
17.

Plaintiff's claims are typical of the Class Members' claims, and Plaintiff will

fairly and adequately represent the Class. There are no conflicts between Plaintiff and the
Qass Members and Plaintiffs counsel are experienced in handling c1ass litigation.
18.

The Second Cause of Action is properly maintainable as a class action under

Federal Rule of Civil Procedure 23(b)(3). There are questions of law and fact common to the
Qass that predominate over any questions solely affecting individual Class Members,
including but not limited to:
a. whether each Defendant was an employer of the Class Members within the
meaning of the NYLL;
b. whether Defendants had a policy of failing to pay overtime for all hours worked
in excess of forty (40) per week;
c. whether Defendants had a policy of misclassifying their IT Support Technicians
as exempt from overtime.
19.

A class action is superior to other available methods for the fair and efficient

adjudication of this controversy-particularly in the context of this case where individual


plaintiffs lack the fmancial resources to vigorously prosecute a lawsuit in federal court against
4

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corporate defendants. The individual members of the class have no interest or capacity to
bring separate actions; Plaintiff is unaware of any other litigation concerning this controversy;
it is desirable to concentrate the litigation in one case; and there are no likely difficulties that
will arise in managing the class action.

STATEMENT OF FACTS
20.

At all relevant times, Defendants have been and continue to be employers

engaged in interstate commerce and/or the production of goods for commerce within the
meaning of the FLSA, 29 U.S.c. 206(a) and 207(a).
21.

Upon information and belief, at a11 relevant times, the Defendants had gross

revenues in excess of $500,000.00.


22.

At all relevant times, Defendants employed and/or continue to employ Plaintiff

and each Collective Action Member within the meaning of the FLSA, 29 U.S.c. 203(d).
23.

At all relevant times, Defendants employed and/or continue to employ Plaintiff

and each Class Member within the meaning of the NYLL, 2 and 651.
24.
industry.

At all relevant times, Defendants have been in the professional services


According to their website http://www.deloitte.com. Defendants employ

approximately 182,000 people in more than 150 countries throughout the world delivering
services in audit, tax, consulting and financial advisory.
25.

Plaintiff German was employed by Defendants from approximately February

10,1997 through January 31, 2012 (the "German Employment Period").


26.

German was initially hired as a help-desk analyst whereby she perfonned "level

I" IT support in Defendants' office at the World Financial Center in New York City. In or
around 1998, German was transferred to Defendants' office in Parsippany, New Jersey where

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she worked as a help-desk analyst until in or around 1999. German returned to Defendants'
offices in New York in 1999, at wbich time she became an IT Support TechniCian, providing
"level II" walk-up and/or desktop support.

German was then promoted to IT Support

Technician Supervisor, in or around 2002. As a Supervisor, German oversaw the work of


approximately 7 IT Support Technicians in Defendants' offices at 1633 Broadway, New York,
NY 10019. Approximately one year later, in or around 2003, German left her position as a
Supervisor and returned to being an IT Support Technician in Defendants' offices at 2 World
Financial Center. German remained in her position as an IT Support Technician performing
"level II" IT support until her separation from Defendants in January 2012. 1 Throughout the
German Employment Period, German also participated in training Defendants' new hires
regarding, among other things, Deloitte's software, specifications and technology
requirements.
27.

Thoughout the German Employment Period, German typically worked at least

five days per week, between at least eight (8) and twelve (12) hours per day, for a total of
between forty (40) and sixty (60) hours per week, and sometimes much more.

Initially,

German was typically scheduled to work from 8:00am to 5:00pm or from 9:00am to 6:00pm,
but would often times work well beyond her scheduled shifts to complete a computer support
task. In or around 2009, Defendants implemented three separate shifts, which were, upon
information and belief, designed to provide relief to the IT Support Technicians who were
working very long hours providing IT support for the entire support day.

IT Support

Technicians including Plaintiff German and the members of the Class would thereafter rotate
every three months between the following three schedules: 9:00am to 6:00pm, 4:00pm to
1 Plaintiff German was on disability leave and unable to work for Defendants from approximately January 31,
2011 until she was terminated on January 31, 2012.

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12:00am and 12:00pm to 9:00pm. Notwithstanding the fact that German and Defendants'
other IT Support Technicians were scheduled to work these shifts, they frequently worked well
in excess of their scheduled shifts.
28.

Throughout the Gennan Employment Period, German was required to record

her hours into Defendants' "SAP" system, which would track the time that German provided
support for a particular computer. Gennan would enter her hours spent performing IT support
for Defendants' clients and would print out her time sheet each week to be approved by her
manager.

Regardless of the number of hours German spent performing IT support or

conducting trainings, as long as it was more than 40 hours German would only received her
weekly salary.
29.

IT Support Technicians, including Plaintiff German and the members of the

Class were required to work at least 40 hours each week to earn their salary. In the event that
an IT Support Technician did not work at least 40 hours in a week, Defendants required the IT
Support Technician to use personal time to bring their weekly hours to the 40 hour minimum.
For example, if an IT Support Technician had to miss a day of work, they would use 8 hours of
accrued "personal time" to ensure that their weekly hours would equal to 40 for the week's
paycheck.
30.

Throughout the German Employment Period, Gennan was paid on a salary

basis based on a 40 hour work week. When German began working for Defendants in 1997,
she earned approximately $44,000 per year. After receiving several raises throughout her time
working for Defendants, German earned approximately $74,400 in her final full-year of
employment with Defendants. Despite the fact that she typically worked in excess of 40 hours
per week, Gennan never earned wages or overtime premium compensation for the hours

Case 1:12-cv-02470-RWS Document 1

worked in excess of 40 hours in a week.

Filed 04/02/12 Page 8 of 15

Defendants' failure to pay German overtime

premiums for work performed in excess of 40 hours in a week is a corporate policy of


Defendants to classify their IT Support Technicians as "exempt" notwithstanding the fact that
these employees primarily perform "non-exempt" work for Defendants.
31.

Throughout German's time as an IT Support Technician and trainer, German

performed mainly break/fix work on the Defendants' clients' computers. Internally, the IT
Support Technicians performed "level II" IT support, based on a three level support system.
"Level I" IT support, refers to Defendants' help-desk analysts, who in or around 2006, were,
upon information and belief, moved or outsourced to India.

As a result, Defendants' IT

Support Technicians provide the first level of in-person support to Defendants' clients in
Defendants' offices in the United States. Defendants' "level II" IT support is divided into
"walk-up support" for laptops and "desktop support" for desktop computers. Defendants' IT
Support Technicians including Plaintiff German and the members of the Class rotated between
walk-up and desktop support, performing the same break/fix duties for laptops, desktops and
printers.

Defendants' "level III" IT support refers to the higher-level computer workers,

including advanced computer technicians and computer engineers.


32.

Throughout German's time as an IT Support Technician, German performed her

IT support tasks pursuant to preexisting formulas, methodologies and scripts which were
imbedded in Defendants' systems and were created by "level III" IT support professionals.
German's primary responsibilities as an IT Support Technician were "non-exempt" duties
including, among other things: replacing hardware including keyboards, mouse and monitors;
adding software; troubleshooting programs; backing up programs and client information;
deployment and computer backup imaging. When German and Defendants' other IT Support

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Technicians were presented with a computer-related issue, they first had to create a ticket for
the computer so that it can be tracked by Defendants' systems. Depending on what type of
problem the ticket was created to address, the ticket would list certain possibilities for the IT
Support Technician to test out in order to resolve the problem. If the problem was unable to be
resolved at that time, the IT Support Technician was required to research the problem in
Defendants' database which contained solutions to common computer-related problems. If the
problem was still not resolved, the IT Support Technician was required to speak with their
supervisor for additional guidance regarding possible search terms or areas of the database that
may provide the solution. In the event that the computer problem was still not fixed, the IT
Support Technician would report this to their supervisor who would direct the IT Support
Technician to send the ticket to a higher level of escalation, "level III." Throughout this entire
process, the IT Support Technician is unable to exercise independent judgment, but is instead
required to research certain computer troubleshooting possibilities in Defendants' database of
solutions or to consult with their supervisor for guidance.
33.

Throughout the German Employment Period, German also conducted certain

computer-related trainings for Defendants' new hires. German and Defendants' other trainers
were required to train Defendants' new hires regarding Deloitte's software, computer
specifications and requirements, pursuant to a preexisting training skit. The training skit was
developed by the head trainers and it instructed German and the other trainers as to what to say
and how to conduct the new hire trainings. Defendants' employees at all levels of IT support
. perform trainings for Defendants' new hires.
34.

German and Defendants' other trainers performed trainings outside of their

regularly scheduled shifts, including on nights and weekends, without receiving 'any extra
9

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compensation or overtime premiums when the trainings were performed during weeks where
Defendants' trainers worked more than 40 hours.
35.

Despite the fact that she regularly worked more than forty (40) hours per week

through the German Employment Period, German was never paid at overtime rates for all
hours worked beyond forty (40).
36.

The work performed by German was performed in the normal course of

Defendants' business and was integrated into the business of Defendants.


37.

The work performed by German required little skill and no capital investment.

38.

The work performed by German did not require the exercise of independent

business judgment.
39.

Plaintiff and Defendants' other IT Support Technicians' primary job duties did

not consist of the application of systems analysis techniques and procedures, including
consulting with users, to determines hardware, software or system functional specifications.
40.

Plaintiff and Defendants' other IT Support Technicians' primary job duties did

not consist of the design, development, documentation, analysis, creation, testing or


modification of computer systems or programs, including prototypes, based on and related to
user or system design specifications.
41.

Plaintiff and Defendants' other IT Support Technicians' primary job duties did

not consist of the design, documentation, testing, creation or modification of computer


programs related to machine operating systems or a combination of the duties set forth in
Paragraphs 39 through 41.
42.

Defendants have simultaneously employed other individuals like Plaintiff

during the Class Period and Collective Action Period and continuing until today, to perform
10

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work as IT Support Technicians and other employees providing "level II" IT support. As
stated, the exact number of such individuals is presently unknown but within the sole
knowledge of Defendants and can be ascertained through appropriate discovery, and is
believed to be in excess of 40.
43.

like Plaintiff, Defendants' other employees were required to work in excess of

forty (40) hours per week, yet Defendants failed to pay these other employees overtime
compensation for hours worked in excess of forty (40) hours per week. This refusal to pay
overtime compensation for hours worked in excess of forty (40) in a given week was a
corporate policy of Defendants that applied to all of Defendants' other IT Support Technicians
and other employees providing "level II" IT support.
44.

Upon information and belief, throughout the Collective Action Period and the

Class Period, Defendants failed to maintain accurate and sufficient time records reflecting the
hours worked and payments received by Plaintiff and Defendants' other employees.

FIRST CAUSE OF ACTION


FAIR lABOR STANDARDS ACT - UNPAID OVERTIME
45.

Plaintiff, on behalf of herself and the Collective Action Members, repeats and

realleges each and every allegation of the preceding paragraphs hereof with the same force and
effect as though fully set forth herein.
46.

By failing to pay overtime at a rate not less than one and one-half times the

regular rate of pay for work performed in excess of forty (40) hours per week, Defendants have
violated and continue to violate the FLSA, 29 U.S.c. 201 et seq., including 29 U.S.C.
207(a)(I) and 215(a)(2).
47.

Defendants also violated the FLSA overtime rights of the Plaintiff and the
11

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members of the Collective Action because they did not perform duties necessary for the
executive, administrative or computer-worker exemptions to apply.
48.

The foregoing conduct, as alleged, constitutes a willful violation of the PLSA

within the meaning of 29 U.S.C. 255(a).


49.

Defendants' failure to pay overtime caused Plaintiff and the Class Members to

suffer loss of wages and interest thereon. Plaintiff and the Class Members are entitled to
recover from Defendants their unpaid overtime compensation, damages for unreasonably
delayed payment of wages, liquidated damages, reasonable attorneys' fees. and costs and
disbursements of the action pursuant to 29 U .S.C. 216(b).
SECOND CAUSE OF ACI'ION
NEW YORK LABOR LAW - UNPAID OVERTIME

50.

Plaintiff, on behalf of herself and the Class Members, repeats and realleges each

and every allegation of the preceding paragraphs hereof with the same force and effect as
though fully set forth herein.
51.

Defendants willfully violated the Class Members' rights by failing to pay

overtime compensation at a rate of not less than one and one-half times the regular rate of pay
for hours worked in excess of forty (40) per week, in violation of the NYLL and regulations
promulgated thereunder.
52.

Defendants also violated the NYLL overtime rights of the Class Members

because they did not perform duties necessary for the executive, administrative or computerworker exemptions to apply.
53.

Defendants' failure to pay overtime caused Plaintiff and the Class Members to

suffer loss of wages and interest thereon. Plaintiff and the Class Members are entitled to
12

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recover from Defendants their unpaid overtime compensation, damages for unreasonably
delayed payment of wages, liquidated damages, reasonable attorneys' fees, and costs and
disbursements of the action pursuant to NYLL 663(1) et al. and 196-d.

PRAYER FOR RELIEF


Wherefore, Plaintiff, on behalf of herself and all other similarly situated Collective
Action Members and Class Members, respectfully requests that this Court grant the following
relief:
a. Designation of this action as a collective action on behalf of the Collective
Action Members and prompt issuance of notice pursuant to 29 U.S.c. 216(b)
to all putative Collective Action Members, apprising them of the pendency of
this action, permitting them to assert timely FLSA claims in this action by filing
individual Consents to Sue pursuant to 29 U .S.C. 216(b) and appointing
Plaintiff and her counsel to represent the Collective Action Members;
b. Certification of this action as a class action pursuant to Fed. R. Civ. P. 23(b)(3)
on behalf of the Class Members, appointing Plaintiff and her counsel to
represent the Class, and ordering appropriate monetary, equitable and injunctive
relief to remedy Defendants' violations of the NYLL;
c. An order tolling the relevant statutes of limitations;
d. An order declaring that Defendants violated the FLSA;
e. An order declaring that Defendants' violations of the FLSA were willful;
f. An order declaring that Defendants violated the NYLL;
g. An award of overtime compensation due under the FLSA and NYLL;
h. An award of liquidated and/or punitive damages as a result of the Defendants'

13

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willful failure to pay overtime compensation pursuant to 29 U.S.C. 216 and


the NYLL;
i. An injunction against the Defendants and their officers, agents, successors,

employees, representatives and any and all persons acting in concert with
Defendants, as provided by law, from engaging in each of the unlawful
practices, policies and patterns set forth herein;
j. An award of prejudgment and post-judgment interest;
k. An award of costs and expenses of this action together with reasonable
attorneys' and expert fees; and

1. Such other and further relief as this Court deems just and proper.

DEMAND FOR TRIAL BY JURY


Pursuant to Rule 38(b) of the Federal Rules of Civil Procedure, Plaintiff demands a trial
by jury on all questions of fact raised by the complaint.

Dated: New York, New York

Apri12, 2012

PELTON & ASSOCIATES PC

e ~K-

By:
Brent E. Pelton (BP 1055)
Taylor B. Graham (TG 9607)
Attorney for Plaintiffs, Individually, and
on Behalf of All Other Persons Similarly Situated
111 Broadway, Suite 901
New York, New York 10006
Telephone: (212) 385-9700
Facsimile: (212) 385-0800

14

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March 2. 2012
Page 7

CONSENT TO BECOME PARTY PWNTIFF


By my signature below, I hereby authorize the filing and prosecution of Iaims in my name and on my
behalf 10 contest Deloitte Services lP and/or its owners, offioers. subsidiaries, contractors. managers.
shareholders and/or affiliates. If appJiable. based on their failure to pay overtime wage::; as requirCild
under state and/or federal law. I authoriz.e the filing of thiS consent in the actlon(s) ohallenging such
conduct. 1authorize being named as the representative plaintiff in this. action to make decisions on behalf
of aU other plaintiffs concerning the litigation. the method and ma.nner Of conducting this litigation, the
entering of an agreement with f'laintiff's counsel concerning attorneys' fees and costs. and all Qther

matters psnaining to this lawsuit.

~~~;Ja?Signature

Date

AJ--i- PAy Rlq k.+!)

d.. re....

utA U:1aeU~ COx:: v-uYt~


Printed Name

{e.Se.. r-ue.d.

(~~L:Yf\O'-)
3{~20iJ-

Case 1:12-cv-02470-RWS Document 32 Filed 04/10/14 Page 1 of 16


Filed 03/25/14 Page 1 of 16

Case 1'12-cv-02470-RWS Document 28-1

IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF NEW YORK

MICHELLE GERMAN, Individually and on


Behalf of All Others Similarly Situated,
ECF Case
Plaintiff,
-against-

12 Civ. 2470 (RWS)

DELOITTE LLP, DELOITTE & TOUCHE


LLP, DELOITTE SERVICES LP and
DELOITTE CONSULTING LLP, Jointly
and Severally,

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OSED] ORDER GRANTING PLAINTIFF'S MOTION FOR FINAL APPROVAL

OF CLASS SETTLEMENT AND APPROVAL OF CLASS COUNSEL'S FEES

AND COSTS

The above-captioned matter came before the Court on Plaintiffs Motion for Final

Approval of Class Settlement and Approval of Class Counsel's Fees and Costs ("Motion for
Final Approval") (Docket. No
I.

Background and Procedural History


1.

The parties' proposed settlement resolves all claims in the action entitled Michelle

German v. Deloitte LLP, et al., Civil Action No. 12 Civ. 2470 (RWS) (the "Litigation"), which is
currently pending before this Court.
2.

The Plaintiff in this action alleges that Defendants misclassified their information

technology support technicians ("IT Support Technicians") as exempt from overtime and thus
failed to pay overtime premiums for the hours that they worked over 40 in a workweek, in
violation of the Fair Labor Standards Act, 29 U.S.c. 201 et seq. ("FLSA") and the New York
Labor Law ("NYLL").

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Case 1:12-cv-02470-RWS Document 28-1

3.

Filed 03/25/14 Page 2 of 16

On April 2, 2012, the Named Plaintiff commenced this action as a putative class

action under Fed. R. eiv. P. 23 and as a collective action under the FLSA. The Named Plaintiff
is a former IT Support Technician for Deloitte who alleged that she and Defendants' other IT
Support Technicians were misclassitied as exempt from overtime and thus not compensated
when they worked more than forty hours in a given workweek. Defendants filed their Answer
on May 15, 2012, wherein they disputed the material allegations and denied liability. (See Doc.
10.) Deloitte asserted, among other defenses, that their IT Support Technicians were "exempt"
from receiving overtime pay. (Id.)

II.

Overview of Investigation and Discovery


4.

Plaintiffs counsel has conducted extensive investigation and prosecution of the

claims in the lawsuit, including, but not limited to, interviewing putative class members,
reviewing and analyzing time and payroll data, reviewing additional documents relating to the
Plaintiff and the work of Defendants' IT Support Technicians, fielding questions from potential
opt-in plaintiffs, preparing for and attending a full-day mediation, and engaging in extensive
settlement negotiations.
5.

Defendants also provided Plaintiff with a comprehensive spreadsheet containing,

among other information, the hourly wage rates and overtime hours recorded by each of the
nationwide class members throughout the relevant time period.

III.

Settlement Negotiations
6.

Over the course of approximately twelve (12) months of litigation, the parties

engaged in informal and formal settlement negotiations.

Soon after Defendants filed their

Answer, the parties agreed to engage in informal discovery to assist with settlement negotiations.
The parties exchanged analyses of payroll information and damages calculations for the putative

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Case 1: 12-cv-02470-RWS Document 28-1

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class members and engaged in numerous settlement discussions.

After several rounds of

settlement discussions, the parties agreed to attempt to resolve the litigation through the
assistance of a private mediator. To that end, the parties hired Linda R. Singer of JAMS to assist
the parties at a full-day mediation session, which was held on April 16, 2012. After a full day of
negotiations, the parties were able to reach an agreement on a settlement amount and several
other key terms.
7.

During the next several months, the parties negotiated the remaining terms of the

settlement, which were memorialized in a formal Settlement Agreement and Release


("Settlement Agreement"). At all times during the settlement negotiation process, negotiations
were conducted at an arm's-length basis.
8.

The Settlement Agreement creates a fund of $1 ,500,000.00 to settle the Litigation

(the "Settlement Fund" or the "Fund"). The Fund covers class members' settlement awards,
service payments, attorneys' fees and costs, and administration fees and costs.

IV.

Preliminary Approval of Settlement and Dissemination of the Notice


9.

On January 16, 2014, the Court preliminarily approved the parties' proposed class

settlement and authorized the issuance of Notice to Class Members (See Doc. 27). The Court
also approved the New York Class Notice of Proposed Settlement of Class Action Lawsuit and
Fairness Hearing, and the Nationwide Class Notice of Proposed Settlement of Class Action
Lawsuit and Fairness Hearing (together, the "Notices") and authorized the mailing ofthe Notices
to the Class Members. (See id.)
10.

On January 27, 2014, the Notices were mailed by the Settlement Administrator

via First Class Mail to the Class Members. (Behring Decl. , 7.) There were 330 Class Members

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Case 1:12-cv-02470-RWS Document 28-1

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on the list provided to the Settlement Administrator by Defendants, thirty-nine (39) in the NY
Class and two-hundred ninety-one (291) in the Nationwide Class. (ld. at ~ 5.)

II.

The Notices advised Class Members of applicable deadlines and other events,

including the Final Approval Hearing, and how Class Members could obtain additional
information. (Id. at
12.

4.)

The response to the Notices has been overwhelmingly positive. None of the Class

Members submitted a Request for Exclusion and no Class Member objected to the Settlement.

(ld. at ~~ 9, 10.)
V.

Contributions of the Named Plaintiff


13.

The Named Plaintiff was integral in initiating this class action and made

significant contributions to the prosecution of the litigation. (Pelton Dec!.

7.) The Named

Plaintiff served the class by providing detailed factual information regarding her job duties and
hours worked, and the job duties and hours worked of the class members, assisting with the
preparation of the complaint, helping to prepare and execute a declaration, preparing for and
attending a full-day mediation, and assuming the burden associated with being a named plaintiff
and assisting with litigation. (ld. at ~ 9.)
14.

Although depositions were not conducted, the Named Plaintiff was ready to sit for

a deposition and to provide information to support her anticipated FLSA collective action and
Rule 23 class action motions.
15.

In addition, the Named Plaintiff assumed other professional risks and burdens.

16.

Without the effort of the Named Plaintiff, this case on behalf of the Class would

not have been brought, and this settlement would not have been achieved. Service Awards of
this type are commonly awarded in complex wage and hour litigation. (ld. at ~ 13.)

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VI.

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Final Approval of Class Settlement


17.

On March 25, 2014, the Named Plaintiff filed her Motion for Final Approval of

Class Settlement and Approval of Class Counsel's Fees and Costs ("Motion for Final
Approval"). The Court held a fairness hearing on April 9, 2014. Having considered the Motion
for Final Approval, the supporting declarations, the arguments presented at the fairness hearing,
and the complete record in this matter, for good cause shown, the Court (i) grants final approval
of the settlement memorialized in the Settlement Agreement, attached to the Pelton Decl. as
Exhibit A;' (ii) approves the service payment to the Named Plaintiff; (iii) approves an award of
attorneys' fees and reimbursement of litigation expenses in the amount of $450,000.00 (30% of
the Settlement Fund); and (iv) approves payment to the Settlement Administrator of $40,000.00
from the Settlement Fund for their costs associated with administration of the settlement.
18.

Under Fed. R. Civ. P. 23(e), to grant final approval of a Settlement, the Court

must determine whether the Proposed Settlement is "fair, reasonable and adequate." In re Am.

Int'l Grp., Inc. Sec. Litig., 04 CIV. 8141 DAB, 2013 WL 1499412 (S.D.N.Y. Apr. 11, 2013).
"Fairness is determined upon review of both the terms of the settlement agreement and the
negotiating process that led to such agreement." Frank v. Eastman Kodak Co., 228 F.R.D. 174,
184 (W.D.N.Y. 2005). Courts examine procedural and substantive fairness in light of the "strong
judicial policy favoring settlements" of class action suits. Massiah v. MetroPlus Health Plan,

Inc., No. ll-cv-05669 (BMC), 2012 WL 5874655, *2 (E.D.N.Y. Nov. 20, 2012) (Cogan, J.)
citing Wal-Mart Stores, Inc. v. Visa U.S.A. Inc., 396 F.3d 96, 116 (2d Cir. 2005). "A
presumption of fairness, adequacy, and reasonableness may attach to a class settlement reached

, Unless otherwise indicated, all Exhibits referred to in this Order are Exhibits to the Pelton Decl.

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in arm's length negotiations between experienced, capable counsel after meaningful discovery."

Wal- Mart Stores, 396 F.3d at 116 (internal quotations omitted).


19.

If the settlement was achieved through experienced counsels' arm's-length

negotiations, '[a]bsent fraud or collusion, [courts] should be hesitant to substitute [their]


judgment for that of the parties who negotiated the settlement." Massiah, 2012 WL 5874655, at
*2, citing In re Top Tankers, Inc. Sec. Litig., 06 Civ. 13761 (CM), 2008 WL 2944620, at *3
(S.D.N.Y. July 31, 2008)(same); "In evaluating the settlement, the Court should keep in mind the
unique ability of class and defense counsel to assess the potential risks and rewards of litigation;
a presumption of fairness, adequacy and reasonableness may attach to a class settlement reached
in arms-length negotiations between experienced, capable counsel after meaningful discovery."

Id., citing Clark v. Ecolab Inc ., Nos. 07 Civ. 8623, 04 Civ. 4488, 06 Civ. 5672, 2010 WL
1948198, at *4 (S.D.N.Y. May 11,2010). "The Court gives weight to the parties' judgment that
the settlement is fair and reasonable." Id. (citations omitted).

A.

Procedural Fairness

20.

It is clear from the history of the case that the parties reached this settlement only

after engaging in extensive investigation and informal discovery which allowed each side to
assess the potential risks of continued litigation, and robust settlement discussions, including a
full-day mediation under the direction of an experienced class action mediator, Linda Singer of
JAMS.

The settlement was reached as a result of arm's-length negotiations between

experienced, capable counsel after meaningful exchange of information and discovery.


B.

Substantive Fairness

21.

In evaluating a class action settlement, courts in the Second Circuit generally

consider the nine factors set forth in City ofDetroit v. Grinnell Corp., 495 F.2d 448, 463 (2d Cir.

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1974). The Grinnell factors are (I) the complexity, expense and likely duration of the litigation;
(2) the reaction of the class to the settlement; (3) the stage of the proceedings and the amount of
discovery completed; (4) the risks of establishing liability; (5) the risks of establishing damages;
(6) the risks of maintaining the class action through the trial; (7) the ability of the defendants to
withstand a greater judgment; (8) the range of reasonableness of the settlement fund in light of
the best possible recover; and (9) the range ofreasonableness of the settlement fund to a possible
recovery in light of all the attendant risks of litigation. Grinnell, 495 F.2d at 463. Because "the
standard for approval of an FLSA settlement is lower than for a Rule 23 settlement," Massiah,
2012 WL 5874655 at *5, satisfaction of the Grinnell factor analysis will, necessarily, satisfy the
standards of approval of the FLSA settlement. All of the Grinnell factors weigh in favor of
granting final approval of the Settlement Agreement.
22.

Litigation through trial would be complex, expensive, and long. Therefore, the

first Grinnell factor weighs in favor of final approval.


23.

The response to the settlement has been positive. All of the Class Members have

remained in the settlement (Behring Decl.

9) and no Class Member has objected to the

settlement terms. (Id. at ~ 10.) "The fact that the vast majority of class members neither objected
nor opted out is a strong indication" of fairness. Wright v. Stern, 553 F. Supp. 2d 337, 344-45
(S.D.N.Y.2008) (approving settlement where 13 out of 3,500 class members objected and 3
opted out); see also Willix v. Healthfirst, Inc., No. 07 Civ. 1143, 2011 WL 754862, at *4
(E.D.N.Y. Feb. 18,2011) (approving settlement where only 7 of2,025 class member submitted
timely objections and only 2 requested exclusion). Thus, this factor weighs strongly in favor of
approval.

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The parties have completed enough discovery to recommend settlement. The proper question is
"whether counsel had an adequate appreciation of the merits of the case before negotiating."

Warfarin, 391 F.3d at 537. "The pretrial negotiations and discovery must be sufficiently
adversarial that they are not designed to justify a settlement ... [but] an aggressive effort to
ferret out facts helpful to the prosecution of the suit." In re Austrian, 80 F. Supp. 2d at 176
(internal quotations omitted). The parties' discovery here meets this standard. Class Counsel
interviewed several current and former employees of Deloitte to gather information relevant to
the claims in the litigation; obtained, reviewed, and analyzed a comprehensive spreadsheet of
employment data for all of Defendants' IT Support Technicians throughout the United States.
(Pelton Dec!.

14).

Plaintiffs also reviewed hundreds of pages of hard-copy documents from

Plaintiff German and other current and former employees including, but not limited to, time and
payroll records, employee personnel files, e-mail correspondence, and employee lists. (Id.)
24.

The risk of establishing liability and damages further weighs in favor of final

approval. A trial on the merits would involve risks because Plaintiffs would have to defeat
Defendants' arguments that the Plaintiffs were exempt from overtime. Specifically, Defendants
would argue that the FLSA and NYLL overtime requirements do not apply to the class members
because they are employees employed in positions that are exempt, including the administrative
and computer employee exemptions (pursuant to 29 U.S.C. 213(a)). Furthermore, Plaintiff
would have to prove that these claims are appropriate for class certification under Rule 23 and
collective treatment under 29 U .S.C. 216(b), which Defendants would strongly oppose. Even if
such a class was certified, Plaintiff would have to establish that the class and collective actions
should remain certified for trial. "Litigation inherently involves risks." Massiah, 2012 WL

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5874655 at *4. The settlement alleviates this uncertainty. See In re Ira Haupt & Co., 304 F.
Supp. 917, 934 (S.D.N.Y. 1969).
25.

The risk of maintaining the class status through trial is also present. The Court has

not yet conditionally certified the FLSA collective action or certified the Rule 23 state law class,
and the parties anticipate that such determinations would be reached only after further discovery
and intense, exhaustive briefing by both parties. In arguing against collective action certification,
Defendants will likely argue that Plaintiff was not similarly situated to other IT Support
Employees working in the office that she worked in New York, let alone offices throughout the
United States. In arguing against class certification, Defendants will likely argue that the number
and variety of individualized questions, the IT Support Technicians' job duties, the number of
hours worked, the types of locations where they performed different tasks, and other similar
questions preclude class certification. If Plaintiffs ultimately prevail in obtaining conditional
certification ofthe FLSA collective action or Rule 23 class certification, Defendants would likely
move to de-certify the collective action and seek permission to file an interlocutory appeal under
Federal Rule of Civil Procedure 23(f).

Settlement eliminates the risk, expense, and delay

inherent in this process. Massiah, 2012 WL 5874655, at *5.


26.

Defendants' ability to withstand a greater judgment is not currently at issue. Even

if the Defendants can withstand a greater judgment, a "defendant's ability to withstand a greater
judgment, standing alone, does not suggest that the settlement is unfair." Frank, 228 F.R.D. at
186 (quoting In re Austrian, 80 F. Supp. 2d at 178 n.9). This factor does not hinder granting
final approval.
27.

The substantial amount of the settlement weighs strongly in favor of final

approval. "The determination whether a settlement is reasonable does not involve the use of a

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'mathematical equation yielding a particularized sum.' Frank, 228 F.R.D. at 186 (W.D.N.Y.

2005) citing In re Austrian and German Bank Holocaust Litig., 80 F. Supp. 2d at 178 and In re
Michael Milken and Assocs. Sec. Litig., 150 F.R-D. 57,66 (S.D.N.Y. 1993). '''Instead, "there is a
range of reasonableness with respect to a settlement-a range which recognizes the uncertainties
of law and fact in any particular case and the concomitant risks and costs necessarily inherent in
taking any litigation to completion.'" Moreover, when a 'settlement assures immediate payment
of substantial amounts to class members, even if it means sacrificing "speculative payment of a
hypothetically larger amount years down the road,'" settlement is reasonable under this factor."

Massiah, 2012 WL 5874655 at *5 (citations omitted). The eighth and ninth Grinnell factors favor
final approval.

VII.

Approval of the FLSA Settlement


28.

The Court hereby approves the FLSA settlement.

29.

Because "the standard for approval of an FLSA settlement is lower than for a

Rule 23 settlement," Massiah, 2012 WL 5874655, at *5, satisfaction of the Grinnell factor
analysis will, necessarily, satisfy the standards of approval ofthe FLSA settlement.
30.

Courts approve FLSA settlements when they are reached as a result of contested

litigation to resolve bone fide disputes. See Diaz v. E. Locating Servo Inc., No. 10 Civ. 4082,
2010 WL 5507912, at *6 (S.D.N.Y. Nov. 29, 2010); deMunecas v. Bold Food, LLC, No. 09 Civ.
440,2010 WL 3322580, at *7 (S.D.NY. Aug. 23, 2010). Typically, courts regard the adversarial
nature of a litigated FLSA case to be an adequate indicator of the fairness of the settlement.

Lynn's Food Stores, Inc. v. Us., 679 F.2d 1350 at 1353-54 (11th Cir.1982). If the proposed
settlement reflects a reasonable compromise over contested issues, the Court should approve the
settlement. Id at 1354; Diaz, 2010 WL 5507912, at *6; deMunecas, 2010 WL 3322580, at *7.

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31.

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The Court finds that the FLSA settlement was the result of contested litigation

and arm's-length negotiation, and that the settlement terms are fair and appropriate.
VIII. Dissemination of Notice
32.

Pursuant to the Preliminary Approval Order, Notice was sent by first-class mail to

each identified class member at his or her last known address (with re-mailing of returned
Notices). (Behring Dec!. " 7,8.) The Court finds that the Notices fairly and adequately advised
Class Members of the terms of the settlement, as well as the right of Class Members to opt out of
the class, to object to the settlement, and to appear at the fairness hearing conducted April 9,
2014. Class Members were provided the best notice practicable under the circumstances. The

Court further finds that the Notices and distribution of such Notices comported with all
constitutional requirements, including those of due process.
XI.

Award of Fees and Costs to Class Counsel and Award of Service Award to Named
Plaintiff
33.

Class Counsel did substantial work identifying, investigating, prosecuting, and

settling the Named Plaintiff's and the Class Members' claims.


34.

Class Counsel have substantial experience prosecuting and settling employment

class actions, including wage and hour class actions, and are well-versed in wage-and-hour law
and in class action law.
35.

The work that Class Counsel have performed in litigating and settling this case

demonstrates their commitment to the Class and to representing the Class's interests.
36.

The Court hereby awards Class Counsel $450,000.00 in attorneys' fees and

expenses, or thirty percent (30%) of the fund.


37.

The Court finds that the amount of fees requested is fair and reasonable using the

"percentage-of-recovery" method, which is consistent with the "trend in this Circuit." See
II

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McDaniel v. Cty. O/Schenectady, 595 FJd 411,417 (2d Cir. 2010); Wal-Mart Stores, Inc. v.
Visa U.S.A., Inc., 396 F.3d 96, 121 (2d Cir.2005); Sewell v. Bovis Lend Lease, Inc., No. 09 Civ.
6548, 2012 WL 1320124, at *13 (S.D.N.Y. Apr. 16, 2012) (following percentage-of-the-fund
method); Willix, 2011 WL 754862, at *6 (same); Diaz, 2010 WL 5507912, at *7-8; Clark, 2010
WL 1948198 at *8-9 (same); Reyes v. Buddha-Bar NYC, No. 08 Civ. 2494, 2009 WL 5841177,
at *4 (S.D.N.Y. May 28, 2009) (same); Strougo ex reI. Brazilian Equity Fund, Inc. v. Bassini,
258 F. Supp. 2d 254, 261-62 (S.D.N.Y. 2003) (collecting cases adopting the percentage-of-the
fund method); In re NASDAQ Market-Makers Antitrust Litig., 187 F.R.D. 465, 483-85 (S.D.N.Y.
1998) (same).
38.

In wage-and-hour class action lawsuits, public policy favors a common fund

attorneys' fee award. See Toure v. Amerigroup Corp., 10 Civ. 5391,2012 WL 3240461, at *5
(E.D.N.Y. Aug. 6, 2012); Sewell, 2012 WL 1320124 at *13; Willix, 2011 WL 754862 at *6.
Where relatively small claims can only be prosecuted through aggregate litigation, "private
attorneys genera]" play an important role. Deposit Guar. Nat'l Bank v. Roper, 445 U.S. 326,
338-39 (1980). Attorneys who fill the private attorney general role must be adequately
compensated for their efforts. If not, wage and hour abuses would go without remedy because
attorneys would be unwilling to take on the risk. Goldberger v. Integrated Res. Inc., 209 FJd 43,
51 (2d Cir. 2000) (commending the general "sentiment in favor of providing lawyers with
sufficient incentive to bring common fund cases that serve the public interest"). Adequate
compensation for attorneys who protect wage and hour rights furthers the remedial purposes of
the FLSA and the NYLL. Sewell, 2012 WL 1320124, at *13; Willix, 2011 WL 754862, at *6;

deMunecas, 2010 WL 3322580, at *8; see also Khait v. Whirlpool Corp., No. 06 Civ. 6381, 2010
WL 2025106, at *8 (E.D.N.Y. Jan. 20, 20 I 0) ("Adequate compensation for attorneys who

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protect wage and hour rights furthers the remedial purposes of the FLSA and NYLL.");

eposit,445 U.S. at 338-39.


39.

Class Counsel's request for thirty percent (30%) of the fund is reasonable and

"consistent with the norms of class litigation in this circuit." See, e.g., Willix, 2011 WL 754862,
at *6-7 (awarding class counsel one-third of $7,675,000 settlement fund in FLSA and NYLL
wage and hour action); Toure, 2012 WL 3240461, at *5 (awarding one-third of $4,450,000 in
wage and hour misclassification case). Courts in this Circuit have routinely granted requests for
one-third or more of the fund in cases with settlement funds similar to or substantially larger than
this one. See, e.g., Clark, 2010 WL 1948198 at *8-9 (awarding class counsel 33% of$6 million
settlement fund in FLSA and multi-state wage and hour case); Khatt, 2010 WL 2025106 at *8-9
(awarding class counsel 33% of$9.25 million settlement fund in FLSA and multi-state wage and
hour case); Westerfield v. Wash. Mut. Bank, Nos. 06 Civ. 2817, 08 Civ. 0287, 2009 WL
5841129, at *4-5 (E.D.N.Y. Oct. 8, 2009) (awarding 30% of $38 million fund in nationwide
overtime suit); Mohney v. Shelly's Prime Steak, No. 06 Civ. 4270, 2009 WL 5851465, at *5
(S.D.N.Y. Mar. 31, 2009) (awarding 33% of $3,265,000 fund in FLSA and NYLL tip
misappropriation case); Stefaniak v. HSBC Bank USA, No. 05 Civ. 720, 2008 WL 7630102, at *3
(W.D.N.Y. June 28, 2008) (awarding 33% of$2.9 million settlement). A fee of23% of the fund
is reasonable and "consistent with the norms of class litigation in this circuit." Willix, 2011 WL
754862 at *7 (internal quotation marks omitted).
40.

Class Counsel Class Counsel risked time and effort and advanced costs and

expenses, with no ultimate guarantee of compensation. A percentage-of-recovery fee award of


thirty percent (30%) is consistent with the Second Circuit's decision in Arbor Hill Concerned

Citizens Neighborhood Association v. County of Albany, 493 FJd 110, 111-12 (2d Cir. 2007),

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amended on other grounds by 522 FJd 182 (2d Cir. 2008), where the Court held that a

"presumptively reasonable fee" takes into account what a "reasonable, paying client" would pay.
While Arbor Hill is not controlling here because it does not address a common fund fee petition,
it supports a thirty percent (30%) recovery in a case like this one where Class Counsel's fee
entitlement is entirely contingent upon success. Toure, 2012 WL 3240461 at *6; Willix, 2011
WL 754862 at *7; Diaz, 2010 WL 5507912 at *7; Clark, 2010 WL 1948198 at *9.
41.

All of the factors in Goldberger v. Integrated Res. Inc., 209 F.3d 43, 50 (2d Cir.

2000) weigh in favor of a fee award ofthirty percent (30%) ofthe fund.
42.

The Court also awards Class Counsel reimbursement of their litigation expenses

in the amount of $7,329.00, which is included as a portion of the thirty percent (30%) of the fund
awarded to Class Counsel.
43.

The attorneys' fees awarded and expenses reimbursed, totaling thirty percent

(30%) ofthe settlement fund shall be paid from the settlement.


44.

The Court finds reasonable a service award to the Named Plaintiff in the amount

of $10,000.00. This amount shall be paid from the settlement. Such service awards are common
in class action cases and are important to compensate plaintiffs for the time and effort expended
in assisting the prosecution of the litigation, the risks incurred by becoming and continuing as a
litigant, and any other burdens sustained by plaintiffs. See Toure, 2012 WL 3240461 at * 5
(E.D.N.Y. Aug. 6, 2012) (approving service awards of $10,000 and $5,000); Sewell, 2012 WL
1320124 at *14-15 (finding reasonable and approving service awards of$15,000 and $10,000 in
wage and hour action); Reyes, 2011 WL 4599822 at *9 (approving service awards of$15,000 to
three class representatives and $5,000 to fourth class representative in restaurant case
challenging tip and minimum wage policies); Willix, 2011 WL 754862 at *7 (approving service

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awards of $30,000, $15,000, and $7,500); Torres2010 WL 5507892 at *8 (finding reasonable


service awards of $15,000 to each of 15 named plaintiffs); Khait, 2010 WL 2025106 at *9
(approving service awards of$15,000 and $10,000, respectively, in wage and hour class action);

see also Roberts v. Texaco, Inc., 979 F. Supp. 185, 200-01 (S.D.N.Y. 1997) ("The guiding
standard in determining an incentive award is broadly stated as being the existence of special
circumstances including the personal risk (if any) incurred by the plaintiff-applicant in becoming
and continuing as a litigant, the time and effort expended by that plaintiff in assisting in the
prosecution of the litigation or in bringing to bear added value (e.g., factual expertise), any other
burdens sustained by that plaintiff in lending himself or herself to the prosecution of the claims,
and, of course, the ultimate recovery.").

X.

Conclusion and Dismissal


45.

The parties shall proceed with the administration of the settlement in accordance

with the terms of the Settlement Agreement.


46.

The entire case is dismissed on the merits and with prejudice, with each side to

bear its own attorneys' fees and costs except as set forth in the Settlement Agreement. This Final
Order and Judgment shall bind, and have res judicata effect with respect to all FLSA Collective
Action Members, and all Rule 23 Class Members who have not opted out of the applicable
classes.
47.

The Court approves the release of the released claims, which shall be binding on

the Class Members who have not opted out ofthe class.
48.

Neither this Order, Settlement Agreement, nor any other documents or

information relating to the settlement of this action shall constitute, be construed to be, or be
admissible in any proceeding as evidence (a) that any group of similarly situated or other

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employees exists to maintain a collective action under the FLSA, or a class action under Rule 23
of the Federal Rules of Civil Procedure or comparable state law or rules, (b) that any party has
prevailed in this case, or (c) that the Defendants or others have engaged in any wrongdoing.
49.

Without affecting the finality of this Final Order, the Court will retain jurisdiction

over the case following the entry of the Judgment and Dismissal until 30 days after the end of the
time for class members to cash their settlement check has expired, as defined in the Settlement
Agreement. The parties shall abide by all terms of the Settlement Agreement and this Order.
50.

This document shall constitute a judgment for purposes of Rule 58 of the Federal

Rules of Civil Procedure.

It is so ORDERED this

;aday of April, 2014

E't6I~~~

bert W. Sweet
United States District Judge

16