T.J. Maxx, Marshalls Owners Settle OT Claims for $4.75M

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By Kevin McGowan

Oct. 4 — The related companies that own Marshalls, T.J. Maxx and Home Goods agreed to pay $4.75 million to settle a lawsuit alleging they wrongly denied overtime pay to employees being trained as assistant store managers ( Roberts v. TJX Cos. , 2016 BL 330030, D. Mass., No. 13-13142, 9/30/16 ).

The partial settlement doesn’t resolve the employees’ additional claim that while working as assistant store managers, they were wrongly classified as exempt from overtime, a federal district court in Massachusetts said.

That issue remains to be litigated, an attorney representing the workers told Bloomberg BNA Oct. 4.

The settlement, which the court approved Sept. 30, covers 4,018 former and current employees who were denied overtime pay during company training for assistant store manager jobs. Their claims arose during various training periods between December 2007 and October 2014.

TJX Cos. Inc. and its three affiliated companies agreed to put $4.75 million into a global settlement fund to pay the claims of eligible class members.

“The parties believe they have reached a fair and reasonable settlement of the disputed claims,” a TJX spokeswoman in Framingham, Mass., said in an Oct. 4 e-mail to Bloomberg BNA.

Companies Will Pay Reduced Amount

The companies’ ultimate payout will be less than the settlement's face amount.

After the court in 2015 gave its preliminary approval, notices were sent to potential class members with a deadline for submitting claims. Only 1,567 of the potential class members, or 39 percent of the total, responded with claims on the settlement fund.

That means the companies will pay a total of about $2.9 million, which includes attorneys’ fees for class counsel, $72,000 in settlement administration costs, $35,750 in service payments to the named plaintiffs and about $1.2 million to the class members who submitted claims, the court said.

Each class member who submitted a claim will be paid about $166 for each week spent in the assistant manager training program, Judge Allison D. Burroughs said.

Any funds left over from the $4.75 million will be returned to TJX Cos. and its related companies.

Attorneys’ Fees Approved

The lawyers who represented the class asked the court to award approximately $1.58 million in attorneys’ fees, that is, 33.3 percent of the $4.75 million settlement fund.

The court expressed reservations about approving the fee request because given the “unimpressive” percentage of class members who filed claims, the lawyers would recover more than the affected workers.

Granting the attorneys’ request would mean class counsel would receive 33.3 percent of the settlement fund while only 26 percent of that fund “will end up in class members’ pockets,” Burroughs wrote.

In addition, about 39 percent of the settlement fund will go back to TJX Cos. and the other defendants, the court said.

“Arguably, the fee award in this case is closer to a 50/50 split between class counsel and the class members, rather than the one-third requested by counsel,” Burroughs wrote.

In future cases, the court will consider the percentage of potential class members who submit claims as one factor in deciding how much the plaintiffs’ attorneys should recover from the settlement fund, Burroughs said.

But it would be unfair to “penalize” the plaintiffs’ lawyers in this case by tying their fee to the class members’ claim rate when the court never before announced such a test, the court said.

An award of 33.3 percent in attorneys’ fees, “while certainly generous,” isn’t unreasonable because of the “positive results” the lawyers obtained for the class and their “actual time and efforts” spent on the case, the court said.

Hepworth Gershbaum & Roth PLLC, Burr & Smith LLP, Klafter Olsen & Lesser LLP and Valli Kane & Vagnini LLP represented the workers. Littler Mendelson P.C., Seyfarth Shaw LLP and Choate Hall & Stewart LLP represented TJX Cos. and its corporate affiliates.

To contact the reporter on this story: Kevin McGowan in Washington at kmcgowan@bna.com

To contact the editor responsible for this story: Peggy Aulino at maulino@bna.com

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