Employment Law Daily $45M settlement of equal pay suit against Family Dollar Stores gets final approval
Monday, March 19, 2018

$45M settlement of equal pay suit against Family Dollar Stores gets final approval

By Lorene D. Park, J.D.

In a long-running and hard-fought class action claiming that Family Dollar Stores paid female store managers less than their male counterparts for the same work, a federal court in North Carolina granted final approval of a $45 million settlement agreement. The settlement includes attorneys’ fees of one-third of the common fund ($15,000,000) in addition to litigation expenses of up to $1,000,000 (Scott v. Family Dollar Stores, Inc., March 14, 2018, Cogburn, M., Jr.).

As explained by the court in its most recent opinion, these proceedings began nearly 15 years ago when 49 female Family Dollar employees filed EEOC charges alleging a pattern and practice of discrimination where a class of female store managers were paid less than men for the same job in violation of Title VII and the Equal Pay Act. Eventually a putative nationwide class action was filed and has been vigorously litigated over the last ten years, including significant motion practice, discovery, unsuccessful mediation, and a trip to the Fourth Circuit to discern the effect of the Supreme Court’s decision in Wal-Mart Stores, Inc. v. Dukes.

Programmatic and monetary relief. This, said the court, “has been a hard-fought case in which both sides worked diligently,” and only ended after a second mediation in 2017 and a “double-blind Mediator’s proposal,” which the parties subsequently accepted. From March through October the parties communicated with the mediator separately and continued to negotiate until the final details of the agreement were documented in a settlement agreement preliminarily approved by the court in November 2017. The parties have agreed to a settlement that provides comprehensive programmatic relief in addition to monetary relief in the amount of $45,000,000.

Fair, adequate, and reasonable. Now granting final approval, the court found the proposed settlement fair and reasonable to class members when balanced against the probable outcome of further litigation, liability and damages issues, and the potential appeal of any rulings. It noted that there were only 50 unrescinded objections submitted prior to the hearing, none of which stated any grounds for not approving the settlement. There was no other opposition from any settlement class member to the joint motion, nor any opposition to the plaintiffs’ motion for attorneys’ fees. The court further found that direct mail notice of the terms of the settlement was adequate and satisfied the requirements of the Due Process Clause as well as procedural rules.

Fees, costs, and service awards. The notice also specifically informed class members that appointed class counsel would request “attorneys’ fees of up to fifteen million dollars ($15,000,000) and reasonable expenses of one million dollars ($1,000,000) for investigating the facts, litigating the case on behalf of the Class for the past fifteen years, negotiating the settlement, and handling all post-settlement disputes and proceedings.” The parties stipulated to the fairness, adequacy, and reasonableness of the agreed-upon terms and the one-third common fund fee set forth in the agreement, and notice was not opposed by Family Dollar or any member of the settlement class. Based on the foregoing, the court approved the fees and costs as requested. It also approved service payments of $10,000 for each of the nine named class representatives and $5,000 for each of the other named plaintiffs.

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