Source: https://getmansweeney.com/current-cases/sgs-north-america-inc
Timestamp: 2019-04-21 10:50:25+00:00

Document:
SGS North America, Inc., et al.
The Claims Administrator, Garden City Group, confirms that settlement checks are being mailed to settlement class member participants on December 9, 2008.
To find out more about the terms of the Settlement, as well as when individuals must have been employed by SGS in order to be a Class Member, go to www.AyersSettlement.com; or contact the Claims Administrator, The Garden City Group, Inc., by mail at Ayers/Ferry v. SGS, c/o The Garden City Group, Inc., P.O. Box 9260, Dublin, Ohio 43017-4660, or by phone at 1-866-923-0867.
The Second Circuit Court of Appeals has proposed that the oral argument of the Plaintiffs’ appeal regarding attorneys’ fees be held the week of November 2, 2009. The schedule is subject to change. An opinion is typically rendered 3 to 6 months after the oral argument, although it can take substantially longer.
GARDEN CITY GROUP DID NOT MAIL CHECKS TO THE PLAINTIFFS ON 12/8/08 AS REQUIRED BY THE COURT ORDER. Plaintiffs’ counsel received word at the end of the day that GCG would not be mailing checks out of the funds it was holding in escrow for the plaintiffs. Garden City Group has the funds and the calculations necessary to mail the payments, but it refuses to do so until SGS transfer funds for its tax liability on the payments. SGS has failed to do so. SGS has represented that it will make payments for the employer share of taxes by December 12th at the latest. Plaintiffs are today requesting the Court to take immediate action to bring SGS and Garden City Group into conformance with the prior order and make sure that the funds are mailed immediately.
On October 16, 2008, the Court issued a decision denying the Plaintiffs’ motion to reconsider its refusal to award service payments and its limited award of attorneys’ fees. Under the terms of Settlement Agreement, the Claims Administrator, Garden City Group, will have 20 days from the Settlement Effective Date to mail each class member his or her settlement payment less any applicable taxes. If no appeals are filed, the Settlement Effective Date will be November 17, 2008, and settlement payment checks will then be mailed on December 8, 2008. (If an appeal of the attorneys’ fee award is filed the Settlement Effective Date will not be affected).
To see the Court’s decision denying the motion to reconsider service payments and attorneys’ fees click here (.pdf 145KB).
On September 9, 2008, the Court issued an Order approving the settlement in part. Specifically, the Order approved the settlement payments to the class but not the service payments to the class representatives and the class members that participated in discovery. The Court also denied a significant part of the legal fees. Click here for a copy of the Order. (.pdf 845KB) We will ask the Court to reconsider its ruling with respect to the parts of the Settlement it denied and its ruling on attorneys fees.
At this point, we cannot determine when settlement payments will be made. Settlement payments are to be mailed 51 days after the Court’s final order, if there are no appeals. However, we will not have a final order until the Court rules on the motion to reconsider the September 9 Order.
We will continue to post any and all developments on this website.
The parties are waiting for the Court to issue an order regarding approval of the settlement. We have had the final fairness hearing before the Court and have submitted a proposed order approving the settlement. We hope to receive the Court’s ruling shortly, but cannot predict or guarantee when. We will post any developments as soon as they arise. If the Court approves the settlement, the judgment will not be final until the 30-day appeal period has run. The settlement agreement provides that the claims administrator will make payments to the class within 20 days after the judgment is final.
At a "final fairness hearing" on July 30, 2008, the Court took the various submissions under advisement. The Court is expected to reach a decision shortly.
On March 10, 2008, the Court preliminarily approved the Parties’ settlement agreement to resolve the claims of SGS’ Oil, Gas and Chemical, automobile, and agriculture inspectors for 7.25 million dollars in funds. Under the terms of the settlement, class members have until July 8, 2008 to (1) submit a Claim Form indicating they wish to receive a share of the Settlement proceeds; or (2) submit a Request for Exclusion Form indicating they wish to be excluded from the Settlement. Class Members who submit neither form will be bound by the Settlement but will receive no share of the Settlement proceeds. Class Members may also submit comments or objections to the settlement. Notice of the settlement will be mailed to all Class Members on April 9, 2008. Click here to view a copy of the Notice for automobile inspectors (.pdf 47KB). Click here to view a copy of the Notice for OGC inspectors (.pdf 49KB). Click here to view a copy of the Notice for agricultural inspectors (.pdf 48KB). Individual notices that are being mailed will contain specific information about the minimum amount each class ember may receive in the settlement.
To find out more about the terms of the Settlement, as well as when individuals must have been employed by SGS in order to be a Class Member, go to http://www.AyersSettlement.com or contact the Claims Administrator, The Garden City Group, Inc., by mail at Ayers/Ferry v. SGS, c/o The Garden City Group, Inc., P.O. Box 9260, Dublin, Ohio 43017-4660, or by phone at 1-866-923-0867; or contact Class Counsel, Getman Law Firm, 9 Paradies Lane, New Paltz, New York 12561. To obtain Claim or Request for Exclusion Forms, contact The Garden City Group, Inc., by mail at Ayers/Ferry v. SGS, c/o The Garden City Group, Inc., P.O. Box 9260, Dublin, Ohio 43017-4660, or by phone at 1-866-923-0867. Claim Forms and Exclusion Forms must be submitted to Claims Administrator at Ayers/Ferry v. SGS, c/o The Garden City Group, Inc., P.O. Box 9260, Dublin, Ohio 43017-4660 no later than July 8, 2008.
4. It is very important that the Claims Administrator has your current contact information, including your current mailing address.
5. You must fill out and submit a claim form byJuly 8, 2008 to receive a share of the settlement, even if you are a Plaintiff in the Ayers v. SGS or Ferry v. SGS cases.
6. The Claims Administrator will determine the actual amount that you receive under the settlement. The value of individual claims will not be finalized until 30 days after the Court has granted final approval of the settlement.
On March 10, 2008, Judge Richard M. Berman granted "preliminary" approval to the settlement in this case. Click here to review the Preliminary Approval Order (.pdf 354KB). The Order allows the case to proceed as a class action, designates Getman Law Office as Counsel to the Class, and directs that Notice be issued to all members of the class. This Notice will be mailed by the Claims Administrator in this case within 30 days, advising each member of the class 1) what their rights are in the settlement, 2) the minimum amount that they can expect to receive under the settlement, and 3) how to participate in the settlement if they wish. A copy of the Notice will also be published on this website. At this point SGS inspectors are requested to await Notice before contacting Getman Law Office for information about the settlement. As part of the Order, Judge Berman set a final fairness hearing date of July 30, 2008 at 2:00 pm.
The trial for the Ayers v. SGS and Ferry v. SGS cases began as scheduled on October 24, 2007. With strong encouragement from Judge Berman on the first day of the trial, the parties agreed to the terms of a provisional settlement in this case, including who would be covered by the settlement, what claims would be released, and how much money SGS would pay to settle the claims. It was provisionally agreed that the case would be brought as a class action for all SGS OCG, Auto and Agriculture division inspectors who worked in applicable time periods, and that SGS would pay out 7.25 million dollars (plus interest from 12/24/07) in addition to what they had already paid to some inspectors. We are in the process of negotiating a more detailed agreement, which will specify the allocation of the settlement, the form of notice each inspector is to receive and the process leading up to the payout.
Once the full settlement agreement is negotiated, the next step in the process is that Judge Berman will review the settlement to determine if it is fair to all inspectors. To that end, he has scheduled a hearing for preliminary approval of a detailed proposed settlement agreement on January 28, 2008. At that time, the Judge may give the settlement preliminary approval, or he may reject the settlement and/or propose revisions. Preliminary approval is not the same as final approval. Final approval can only be granted after all plaintiffs and class members are given the opportunity to consider and make comments on the settlement.
Under the terms of the proposed settlement (which is not yet approved), 30 days after Judge Berman has granted preliminary approval, the claims administrator (an outside company hired to calculate and administer the class claims) will send notice to all members of the class. Notice will include details about the settlement and inform class members of their rights and options under the settlement. Class members’ rights will include the right to participate in the settlement and be paid, to opt out of the settlement, or to object to the settlement. To participate in the settlement, class members, including Plaintiffs in the Ayers and Ferry actions, will have to fill out and return the claim form.
Under the provisional settlement, class members will have roughly 60 days from the date the claims administrator mails the notice to return their claim form or exclusion form. Class members who do not do either may not receive payment, but may still be bound by the class release. After the 60-day response period has run, the parties will move the Court for final approval of the settlement. Judge Berman will consider the parties motions and any objections to the settlement before ruling on final approval.
Fifty days after the settlement receives final approval (following review by Judge Berman), the class administrator will mail each participating class member his or her share of the settlement.
In light of the many variables still existing, the attorneys are unable to inform any individual exactly how much they will receive under the agreement. The details of the settlement can only be communicated through a notice approved by the Court and sent out by the claims administrator. This process is not quick, but it is mandated by the complex interplay of federal class action rules, wage and hour laws, and the U.S. Constitution.
1. It is very important that we have your current contact information, including your current mailing address.
2. You must fill out and submit a claim form within the 60-day period to receive a share of the settlement, even if you are a Plaintiff in the Ayers or Ferry cases.
3. The claims administrator will determine the actual amount that you receive under the settlement. The value of individual claims will not be finalized until 30 days after the Court has granted final approval of the settlement.
The settlement plan has not yet been provided to the Court for review. Under the terms of the tentative settlement, SGS was to have supplied payroll data to the Getman Law Office in mid-November. Unfortunately, much of that information has yet to be provided. According to SGS, the slow response relates to difficulties in obtaining all the information needed from its payroll service ADP. Plaintiffs expect to receive the necessary data within 1to 2 weeks and to have a tentative settlement to the Court within 2 weeks after the receipt.
During trial on Wednesday October 24, 2007, the parties reached a tentative settlement agreement to resolve the claims of SGS’ Oil, Gas and Chemical, automobile, and agriculture inspectors for 7.25 million dollars in funds additional to an estimated 1 million dollars already paid to some inspectors. The parties committed to presenting a settlement plan to the Court within 45 days. In the interim, SGS will be providing data on individual inspectors necessary for calculating individual claims. The specific amounts that will be due to each inspector if the settlement is approved will not be known until a formula for allocation is tentatively approved by the Court (no earlier than December 10, 2007). If the Court preliminarily approves a settlement with plan for allocation, a personal notice will be sent to each employee explaining the terms of the settlement applicable to them. Due to the procedural requirements for the Court’s and all parties’ approval, the payout to members of the class will not take place until mid-2008. Members of the class who have not provided us with their current telephone number and/or email address, should promptly provide this information using the "Information Request" form below.
Another important ruling has been issued in the consolidated Ayers and Ferry v. SGS cases. By Decision and Order dated October 10, 2007, U.S. Magistrate Judge Ronald L. Ellis struck 5 of defendants’ trial witnesses from participating in this case because the defendants failed to disclose them earlier. The witnesses are former in-house counsel Lisa Colchete, Chris Thuneman (Sr. VP or OGC), Mabel Coba (Payroll Manager), outside counsel Colin Page and Patrick McCarthy and Joseph DeBord. In addition, the Court directed defendants to immediately supply to plaintiffs documents concerning SGS’ communications with its attorneys, items that SGS failed to disclose for several years, and thereafter claimed were privileged under the attorney-client privilege doctrine.
ON 10/9/07 JUDGE BERMAN RULED THAT THE TIME AND ONE HALF METHOD OF CALCULATING BACK PAY MUST BE USED FOR ALL INSPECTORS WHO WERE NOT PAID IN COMPLIANCE WITH THE LEGAL REQUIREMENTS FOR THE FLUCTUATING WORK WEEK.
Judge Berman has set a further settlement conference before the Court for October 18, 2007, just prior to the commencement of trial which is scheduled for October 24, 2007.
This case is entering the final stages before trial. The parties are required to lay out their case for the court in what is called a Joint Pre-Trial Order on September 24th. In that document, each side identifies all the exhibits and all the testimony that it will use in its case. Judge Berman has already ruled that the plaintiffs have shown that SGS’s "Chinese Overtime" policy through April 2007 was illegal. Also, the Court ruled that the "Pay For Performance" plan was illegal too. The plaintiffs will argue some additional grounds for the illegality of the "Chinese Overtime" system, namely that salaries were set too low to guarantee the minimum wage for each hours of work. Even though the Court already addressed Chinese Overtime, this additional ground is important, should SGS appeal the decision. Plaintiffs also will expect to show the Court that the late payment of overtime prior to June 2006 was illegal. We argue that the later change SGS made shows that it was always practicable to make the timely payment. The biggest area of dispute is what method of damages the Court must use for OGC plaintiffs. Plaintiffs argue that SGS’s violation of the "fluctuating work week" requirements 29 CFR 778.114, mean that the Court must use the time and one half method. SGS argues that it must only pay back a small sum of money to bring its policies into retroactive compliance with the fluctuating work week method. SGS also argues that its violations of law were "in good faith."
Over the last month, there have been a flurry of motions on both sides, as well as numerous days of final depositions. Plaintiffs have numerous letter briefs to the court alleging that SGS has withheld information it was obligated to turn over. For example, on September 11, 2007, years after it was obligated to do so, SGS supplied a "Privilege Log" identifying 85 communications with lawyers it had concerning the FLSA. Up to that point, SGS had claimed only a few letters existed at all. Plaintiffs argue that the failure to disclose the communications requires that they be turned over.
SGS had asked for approximately 40 last minute all-day depositions of the opt-in plaintiffs in the Ferry case. Judge Berman allowed 6 depositions only, and limited them to 2 hours apiece. These depositions will take place on September 19 and 20 in Houston and Florham Park, NJ.
The trial commences on October 24th. We look forward to showing the full extent of SGS’s violations of law and hope to get the full measure of relief allowed by law.
The parties engaged in a formal mediation on August 2. Despite the Plaintiffs best efforts, no progress was made with respect to settling the case. The trial is scheduled to begin on October 24 of this year.
The mediation in this case has been postponed until August 2, 2007. The mediator will be Michael Young of JAMS mediation service in New York City.
Judge Berman has granted the plaintiffs request to set the case for an early a trial date. On May 14, 2007, the parties appeared before the Court and Judge Berman set trial for October 22, 2007. The Court indicated that no more than 3 days would be required for the trial. The trial will cover both the Ayers v SGS case as well as the Ferry v SGS case. Judge Berman has already ruled that the SGS fluctuating work week pay scheme violated the Fair Labor Standards Act. The plaintiffs believe that the law in this district and circuit, compels the Court to find that the plaintiffs are entitled to receive time and one half for each hour of overtime, not half-time. Defendant argues that the half time method should still be used to calculate damages. SGS lost this argument in a prior case in District Court in Florida, however. In addition to the question of which method is used to calculate damages, the trial should cover whether there are damages due for the late payment of overtime, how much is due to auto inspectors under the pay for performance plan, and whether SGS acted in "good faith" in paying as it did, thereby preventing the Court from awarding "liquidated damages" equal to the amount of back pay due to each plaintiff. The plaintiffs are very pleased that this matter is nearing closer to the entry of a final judgment. In addition, the parties will be conducting a mediation session with a private mediator in late June in an attempt to reach a settlement.
Our last update indicated that the Parties would appear before Judge Berman on March 21, 2007. SGS postponed that date. Instead, we appeared before Judge Berman on Monday, April 2, 2007. At the hearing, we addressed various issues, but most of the discussion was dedicated to the language of the notice of the opportunity to join the Ferry v. SGS case that will go to all OGC inspectors who worked for SGS in the past 3 years. Once we resolved the notice issues, SGS offered to engage a neutral, mutually acceptable mediator to help with settlement discussions. We agreed to participate in the mediation, and the Parties agreed to complete it by May 11. Judge Berman scheduled another conference for Monday, May 14.
On February 26, 2007, the Plaintiffs won a substantial victory in this case. U.S. District Judge Richard Berman issued a decision ruling that SGS’s "Chinese Overtime" method of paying OGC inspectors overtime, and its "Pay-for-Performance" method of paying Auto Inspectors overtime are impermissible violations of the Fair Labor Standards Act. The Judge did not rule on the issue of whether SGS paid inspectors overtime wages impermissibly late. That issue will be decided at trial, if necessary. The Judge denied SGS’ request to break up the class and force everyone to bring individual cases. (Although the Judge allowed the Plaintiffs to proceed as a class, he ruled that claims for overtime hours worked but not recorded cannot be part of this collective action because those claims did not involve company-wide polices. Plaintiffs who want to pursue those claims will have to do so in a separate action.) The Judge also denied all of SGS’ requests for summary judgment on individual issues. Click here to read the Decision (.pdf 1MB).
This decision significantly narrows SGS’ options, and we expect it will move the Parties much closer to a final resolution–but the case is not over. SGS’ liability is clear, but the Court did not specify how the damages are to be calculated and it did not order SGS to pay anything yet. Instead, the Court ordered the parties to "engage in good faith settlement negotiations" before March 21, 2007.
It is important to note that only those people who have joined the action will benefit from the case. OGC inspectors who are not yet part of the overtime litigation against SGS can join the Ferry v. SGS case by filling out the Consent to Sue form posted on our website. See the notes under the Ferry v. SGS case in our Current Cases section of this website.
On February 15, 2007 at 10 a.m., Judge Berman will hold oral argument on the plaintiffs’ motion for summary judgment (declaring the delayed receipt of overtime illegal, declaring the defendant’s "chinese overtime" system illegal, and declaring that the defendant illegally paid auto inspectors a lower rate for hours over 40 than for the non-overtime hours). The Court will also hear argument about the defendant’s motion for summary judgment and the motion to "decertify" the collective action. The argument is open to the public and to the plaintiffs in the case.
The Court has now consolidated the Ferry v. SGS case with the earlier filed Ayers v. SGS case. The plaintiffs in Ayers v. SGS have already made a motion to have the Court declare that SGS’s pay practices are unlawful as to OGC inspectors. The plaintiffs there have briefed the argument that SGS’s half-time pay scheme violates the law and that employees are owed back pay at the time plus one-half rate (and then doubled to pay employees "liquidated damages" under the law). Both sides have agreed that the Court’s ruling on the legality of the defendants’ pay scheme will also apply equally to this action. The plaintiffs believe that this will result in a quicker determination of this case.
Plaintiffs have moved the Court to declare the private settlement agreements arranged by SGS’s attorneys to be null and void. Click on this link to the Brief (.pdf 103KB) in order to review the filing. This brief demonstrates that Courts, from the Supreme Court on down, have routinely found that private waivers of FLSA rights cannot be enforced. After the motion was made, at a scheduling conference before Judge Kent of the Southern District of Texas, the Judge transferred this case to the Southern District of New York, due to its similarity to existing litigation there. That New York litigation is Ayers v. SGS, which is also brought by the Getman Law Office. For information on that case, see the Current Cases section of this website.
Plaintiffs have moved the Court for permission to send notice to all OGC inspectors to allow them to join this litigation. Click on the link to see the Plaintiffs Collective Action Brief (.pdf 109KB). The plaintiffs ask the Court to authorize notice, give the inspectors the opportunity to join this case, and to advise OGC inspectors that any settlement agreements SGS may have had them sign outside this litigation are null and void.
Additional OGC inspectors continue to join this litigation. At present there are a total of 22 plaintiffs who are bringing this litigation.
Inspectors who accepted a settlement from SGS are able to join this litigation through the filing of a "Consent To Sue" form, available above. Print out the form, fill it out completely, and fax, mail, or email the form to Getman Law Office. Defendant SGS is expected to argue that the signing of a waiver is effective, however the Supreme Court of the United States and more than 50 years of jurisprudence suggest otherwise. Individuals who accepted a private settlement from SGS’s lawyers are still protected from retaliation for filing a claim in this case, under the anti-retaliation protections of the Fair Labor Standards Act, 29 U.S.C. section 215(a)(3)and other provisions of the FLSA which provide for double damages for any such retaliatory act.
SGS appears to be trying to obtain a quick settlement from inspectors at far less than the true value of the claims. We are concerned that SGS may be offering this settlement now because of 2 pending lawsuits (Ayers v. SGS for 208 inspectors and Ferry v. SGS for 5 inspectors) brought by this office to collect the actual value of the overtime and liquidated damages that are due to inspectors. The period to join the Ayers case has passed, but OGC inspectors are able to join the Ferry v. SGS case and are actively doing so.
Getman Law Office believe that SGS is offering these settlements to prevent the thousands of current and former inspectors from filing suit because it knows it would likely have to pay much more in a lawsuit than it will if inspectors are fully informed about the value of their claim. We believe that SGS is hoping to obtain settlements without fully revealing the full information about the back wages and liquidated damages that OGC inspectors are due and therefore to trick them into giving up their overtime claims for much much less than they are worth. We urge inspectors to carefully consider SGS’s motivations in offering this settlement and to carefully consider the possible effects of settling claims at this point. We believe that accepting such a settlement without consulting an attorney about the value of an inspector’s claim could be a mistake.
OGC inspectors should know that a federal court in Florida and a jury already determined that SGS’ "Chinese Overtime" violated federal law. Ferrer v. SGS North America, 8:04CIV916 (MD Florida, Tampa Div). In that case, a jury awarded an OGC inspector more than 126,000 dollars in back overtime pay and liquidated damages for work for SGS. The case was afterwards settled by a secret settlement, which may have been greater or lower than the amount awarded by a jury. Likewise, any other inspector’s claim may be higher or lower than what was awarded in Ferrer v. SGS.
The U.S. Supreme Court has held that a "private" waiver of rights under the FLSA cannot be valid. Nevertheless, SGS is expected to argue that a "settlement" waiver is valid and acceptance of such a settlement may complicate bringing overtime claims to Court for their full value.
Any inspector who has questions about whether to take the settlement should contact Getman Law Office and speak with paralegals Janice Pickering or Carolyn Mow. All calls to this office are protected by attorney-client privilege and cannot be disclosed to SGS. SGS is prohibited from engaging in any form of retaliation against any employee who does not take the offered settlement or who brings their overtime claims in Court.
Click here to review the Complaint in this case (.pdf 239KB).

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