Recently, a million dollar settlement between a class of service technicians and their employer, Benco Dental Supply, was approved by a federal judge. U.S District Judge Robert D. Mariani of the Middle District of Pennsylvania praised the work done by the class counsel, increasing the lodestar billing rate by 50%.
The class was comprised of nearly 70 technicians, who felt they were denied overtime pay under their contracts with Benco in violation of the Fair Labor Standards Act. Benco had signed Belo contracts with its technicians, whereby the employees were paid a flat amount of 60 hours per week, regardless of how many hours they actually worked.
Belo contracts, emerging out of the 1942 U.S. Supreme Court decision Walling v. A. H. Belo, are designed to govern the compensation of employees working irregular hours and provide an exception from some requirements of the FLSA.
Judge Mariani said that significant work had already been done by the class counsel and explaining Belo contracts to the court would only complicate things and extend the resolution. Thus, the settlement reached by the parties was a more favorable outcome.
According to Judge Mariani, the complex nature of Belo contracts would have exposed plaintiffs to significant risks, mainly because “the case law on them is sparse, and is therefore unclear as to Benco’s liability. By having to litigate in a legal grey area, plaintiffs would incur substantial risks, . . . of an unfavorable outcome.”
Given the uncertainty, Rowdy Meeks, the plaintiffs’ lawyer, did well to “navigate an unclear area of law to produce an award for the class that comes close to the full extent of Benco’s liability . . . .” Meeks submitted a lodestar billing rate of $625 an hour for himself and $175 an hour for his paralegal. He worked 311.7 hours and his paralegal worked 39.2 hours for a total bill of $201,672.50.
This would mean that “the settlement agreement gives counsel 1.65 times the lodestar amount.” Judge Mariani said that, “given the nature, complexity, and potential duration of this case, the court does not believe that a 1.65 multiplier is unreasonable.”