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Litigation over pay for security checks by Amazon warehouse workers in Nevada ends for $13.5M

By Marjorie Johnson, J.D.

The highly contested case had been pending for more than 10 years, with significant adversarial motion practice and discovery, as well as trips to both the U.S. Supreme Court and the Sixth Circuit.

A federal district court in Kentucky gave final approval to a $13.5M settlement of class litigation alleging Amazon warehouse employees in Nevada were entitled to compensation for time spent during security checks. The case is part of the multidistrict litigation faced by Amazon, including a similar lawsuit brought by Pennsylvania warehouse workers who were recently handed a victory by that state’s highest court, which held that under the PMWA security screening time is compensable. The $13.5M settlement in the instant action includes individual payments averaging $642 to over 4,000 class members who submitted claims, $4.5M in attorney fees, a range of $15K to 20K in incentive payments to three named plaintiffs, and $130K to the settlement administrator (In re Amazon.com, Inc., July 22, 2021, Hale, D.).

This case, like others in the complex multidistrict litigation (MDL), involved claims that warehouse employees of Amazon and the staffing agencies it used were required to undergo security checks for which they were not compensated. The district court previously granted conditional certification for settlement purposes of a class of hourly employees who worked at Amazon warehouses at some point during a 13-plus year period beginning in October 2007. Notice was sent to over 42K class members and approximately 4,200 had responded and submitted claims.

Adequate representation, litigation. After conducting a fairness hearing, the district court determined that the proposed settlement was “fair, reasonable, and adequate” pursuant to Federal Rule of Civil Procedure 23. Significantly, the case had been litigated for more than ten years with discovery throughout, and counsel for both parties had extensive experience in similar cases. Approval of the settlement was also supported by the “relatively high response rate” of about 10 percent of class members who received notice, the minimal requests for exclusion that were received (about 0.02 percent), and the complete lack of objections to its terms.

In addition, the record demonstrated that the settlement was the result of “‘a truly adversarial bargaining’ process.” This case had been pending for over a decade, during which time there was significant adversarial motion practice and discovery. Indeed, the litigation had reached both the Supreme Court and the Sixth Circuit, having been remanded each time. Moreover, the fact the settlement was reached following mediation strongly suggested a lack of collusion.

Adequacy of relief. Finding that the agreed upon relief was adequate, the court noted that the parties had already invested significant time and money in the litigation at a significant risk. Moreover, advancing to trial would involve further risk and expense, and an uncertain outcome, for both parties. In addition, any class member who submitted a timely and complete claim form would be mailed a check in the amount of that class member’s settlement award.

The claim form was simple and straightforward and did not require any documentation from class members. Of the 42,253 notices mailed, only 820 (less than two percent) were ultimately deemed undeliverable. Slightly more than 31 percent of the net settlement fund had been claimed, with an average settlement amount of $641.73.

The court also noted that while the response rate of about 10 percent might seem low it was not atypical. Rather, “the reality is that ‘most class members will never step forward and file claims for relief in most class actions.’” Finally, the method of distribution did not appear to be in any way design to prevent class members from receiving payment.

$4.5M attorneys’ fees award. Additionally, the court approved class counsel’s request for $4.5M in fees and $143K in costs. Applying the percentage-of-the-fund method, and noting this method is “generally preferred common-fund cases,” the court found the value of the benefit to class members (averaging $642 each) to be substantial, and also noted some could receive thousands.

The court also found it significant that class counsel provided their services on a contingent basis, noting the strong public interest in rewarding attorneys who take such complex wage-and-hour cases and “achieve a result that the individual class members probably could not obtain on their own.” Class counsel also submitted documentation showing a lodestar amount of about $1.935M, with the resulting “multiplier” of 2.3 being well within the reasonable range under the circumstances. Finally, such 33-percentage fee awards are frequently approved in complex wage-and-hour cases.

Incentive awards not excessive. The incentive awards to the named plaintiffs—$20K to the original plaintiff and $15K to two who were later added to the case—were significant but not excessive per se. Each plaintiff submitted documentation of their time spent on the litigation, which included assisting class counsel, participating in mediation, and reviewing the proposed settlement. The original plaintiff also dealt with publicity and news interviews surrounding the Supreme Court’s consideration of the case, while all three assumed the risk that their participation in this lawsuit would have a negative effect on future employment opportunities, as well as potential liability for costs if the litigation were unsuccessful.

Moreover, the relief to unnamed class members will not be “perfunctory,” but based on the number of shifts they worked during the relevant time period. Thus, the payments were reasonable and supported by documentation.