Bednar v. CT Corporation, 2003 WL XXXXXXXXXXD.Minn.)
West’s Minnesota Jury
Verdict Reports
Thomas Bednar worked for CT Corporation System as a customer
specialist. CT is a nationwide legal document service company. The company
offers various services to attorneys and law firms, and has offices in several
states. There are approximately 300 customer specialists employed by CT. Until
August of 2002, the customer specialists were compensated on a salary or
“exempt” basis, and as such, were ineligible for overtime pay for any hours
worked
in excess of 40 hours per week. After August 2002, customer
service specialists were reclassified as non-exempt. In 2003, Bednar filed a
class action complaint again CT in a Minnesota federal district court, alleging
the classification of customer specialists as exempt violated the federal Fair
Labor Standards Act, 29 U.S.C. 207(a)(1) and various state wage and hour laws.
The complaint sought reimbursement for unpaid overtime, liquidated damages, and
an award of attorney’s fees and costs. The parties agreed to settle the case on
December 15, 2003 for a total payment not to exceed $2,825,000, including
attorney’s fees. Under the terms of the settlement agreement, each member of
the class who chose to participate in the settlement would receive back
overtime pay based on the actual excess hours that individual worked, in
addition to a payment of $4,066. The additional payment was deemed to cover any
potential state law violations, liquidated damages and various other damages.
1. Were you surprised that this FLSA violation happened to a
company that works in the legal industry and works with attorneys and law firms
every day?
2. Notice in this case that it was only after the defendants
figured out that they had wrongly misclassified the customer service
specialists—and, in fact, corrected the matter—that the plaintiffs discovered
the error and filed the class action to recover damages when they were
misclassified. Is that fair?
3. Notice also that what may have started as one person,
Thomas Bednar, having a single claim against the defendant turned into a
full-blown class action costing the firm $2.8 million dollars in damages alone.
Did it surprise you how much the case was settled for and how quickly it was
litigated?