Facts

This was a wage and hour class action. The complaint alleged overtime violations and maintained claims for missed meal and rest breaks.

The class action involved approximately 1,150 sales agents who worked approximately 47,300 weeks during the time period at issue.

PLAINTIFFS' CONTENTIONS:
The plaintiffs contended that Eastwood Insurance violated the overtime laws because during a certain period of time, its sales agents did not receive at least 50 percent of their wages from commission.

DEFENDANT'S CONTENTIONS:
The defendant contended that it paid all wages due, and it provided meal and rest periods as required. The defendant further contended that the sales agents were exempt from overtime under California's inside salesperson exemption because their wages were in the form of commissions.

Damages

Plaintiffs contended their claims were valued at over $54 million.

Result

Settlement of up to $1.7 million, which depends upon the extent to which eligible class members choose to participate, and which also depends upon final court approval. Of this amount, up to $1,333,335 is available for the class, which is equivalent to an average of $24 per work week for class members who filed claims (or $43 per work week according to plaintiff, depending on claim period), and $566,666 is for attorneys' fees. The Court dismissed an individual executive who was named as a defendant, and the case settled before there was any determination of the merits of the remaining claims and defenses asserted.

Other Information

The Court gave preliminary approval of the class action settlement on July 20, 2006. A final approval hearing is set for Nov. 16, 2006, which will include class counsel's request for $566,666 in attorney's fees and costs. The plaintiffs are providing the defendant with a class-wide release of all compensation-related claims, they will dismiss their action and they will be barred from asserting these claims against the defendant.