NEW YORK — Citigroup Inc. and a group of its home lending specialists recently filed a joint motion requesting preliminary court approval of a $4.7 million settlement. Both parties believe the settlement will resolve the home lending specialists’ putative class action overtime claim. The home lending specialists claimed Citigroup misclassified the employees as exempt from overtime pay under the Fair Labor Standards Act (FLSA) and New York state wage laws.
The Claim’s Path
The home lending specialists filed their initial claim in April 2011. One month later, the company sought to compel arbitration of the claim based on the signed arbitration agreements of the two named plaintiffs, Nichol Bodden and Tara Raniere. The agreements the two employees signed contained a class waiver, which not only required the parties to arbitrate any claims that arose against the company, but also required them to arbitrate their claims individually. If the court granted Citigroup’s request, the employees would not be able to continue with their putative class action.
In November 2011, the district court judge denied Citigroup’s motion ruling that collective action rights under the FLSA could not be waived through an arbitration agreement. However, the Second Circuit Court of Appeals reversed the decision in August 2013. The reversal, if it was allowed to stand, would have terminated the class.
The home lending specialists appealed the Second Circuit’s decision and the parties began negotiating a potential settlement. The parties notified the court, before the appeal could be heard, that they were tentatively reaching an agreement through their settlement discussions. The settlement is intended to resolve the claims of close to 840 class members. Of the $4.7 million settlement, Citigroup has agreed that $4.65 million will go toward resolving the employees’ claims, including their attorneys’ fees and expenses.
Reaching Settlement
The majority of the wage and overtime claims filed in state and federal courts reach a settlement before making it to trial and those that do go to trial will often result in a settlement before the court can impose one. When deciding to settle, how much to settle for, and finally reaching a settlement, there are many factors that need consideration. Factors such as the evidence for and against employees’ claims, each party’s willingness to negotiate, and the potential cost of proceeding with litigation can affect the bargaining power and potential awards in a settlement situation. However, even with these factors in mind, both parties must come to fair and reasonable terms of settlement or the court will reject the offer, before the rest of the class member are given the opportunity to see it, which could result in drawing out the litigation.
Whether you are contemplating an overtime claim or have received notice of an overtime settlement offer, our experienced team of overtime pay lawyers can evaluate your situation and discuss your options today at (855) 754-2795 or you can complete the Free Unpaid Overtime Case Review form. If we accept your case, we will represent you under our No Fee Promise. This means there are no legal fees or costs unless you receive a settlement.