Judge Approves $7.5M Holiday Retirement Settlement in Overtime Lawsuit

A federal judge in the state of California has granted final approval to a $7.5 million settlement of a 2012 class action lawsuit under the Fair Labor Standards Act alleging that senior living operator Holiday Retirement failed to accurately pay community managers and co-managers for all hours worked. 

Holiday Retirement, the largest independent living provider in the country, is owned by investment management firm Fortress Investment Group LLC (NYSE:FIG) and agreed to settle the suit earlier in 2013, with the Honorable Dolly M. Gee, United States District Judge in the Central District of California, granting preliminary approval of the class action settlement on June 14.

The final approval, granted during a Nov. 1 hearing, was delayed due to an extended Notice Response Deadline to ensure all potential plaintiffs could participate in the settlement if they wanted to do so, court filings indicate. 

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The suit was filed Sept. 26, 2012 against Harvest Management, dba Holiday, by plaintiff Sallie Cwik on behalf of herself and others she believed had encountered similar situations. Cwik alleged Holiday failed to accurately record and pay for all hours worked by the company’s community managers and co-managers.

“The suit addresses the very long working hours, and the fact that the managers really are not managers since they have virtually no power over their property, therefore they are not exempt [from overtime pay provisions under the FLSA],” Cwik told SHN in an email. 

While Holiday has agreed to pay up to a total of $7.5 million to settle the suit, including all alleged unpaid wages, penalties, interest, costs, and attorneys’ fees, it denies the allegations and has not admitted any liability or other wrongdoings through the settlement. 

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“Holiday has reviewed the claims in this lawsuit in detail, and it has denied any wrongdoing or liability in this matter and maintains that it compensated its employees fairly and lawfully,” says a court document containing the proposed settlement to class members, filed in April 2013. “Specifically, Holiday contends that the Managers in question were properly classified as salaried managerial employees.”

Despite believing that it has “ample legal and factual grounds” for defending and defeating the claim, Holiday said in a case document that it chose to enter a settlement agreement with the plaintiff and resolve the suit in order to avoid further litigation-related expenses. 

Out of the 3,384 class members who were sent notices of the proposed settlement, 2,359 have submitted timely claim forms, representing around 70% of the class. While some class members have disputed their calculated settlement amount, none have objected to the settlement, and it is expected the final response rate will be higher, according to court documents detailing the response as of Oct. 11, 2013.

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“The unusually high response rate and the complete lack of objections together indicate that the Class Members overwhelmingly support the Settlement and strongly favor its approval,” said plaintiff attorney David Medby in a declaration filed Oct. 18 in support of the joint motion for final approval of the collective action settlement. 

Holiday declined to provide any statement regarding the settlement. 

Written by Alyssa Gerace

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