In the Peterson v. ALASKA COMMUNICATIONS SYSTEMS GROUP, INC. case, Laura Peterson filed a lawsuit, on behalf of herself and similarly situated employees, against Alaska Communications Systems Group (ACS). Peterson and the other employees worked as client account managers for ACS. Peterson claimed that ACS violated the Fair Labor Standards Act (FLSA) and the Alaska Wage and Hour Act (AWHA) by misclassifying them as overtime-exempt salaried employees. This resulted in the failure to pay appropriate overtime wages. The court conditionally certified the FLSA collective action, and the class consisted of 74 members who sought compensation.
The parties reached a settlement agreement, which was fully executed in August 2021. The agreement resolved all of the class members’ claims in exchange for a non-reversionary payment of $2,087,500. Each class member received a share of the net settlement based on a system of “Salary Points” and “Commission Points” calculated from their employment records. The average pre-tax award for class members was expected to be $14,000, with the largest individual payment exceeding $60,000. They would also receive service/incentive awards of $30,000 and $15,000.
The court preliminarily approved the settlement agreement. The class counsel sought $688,875 in attorney’s fees, which represented one-third of the total settlement payment, and reimbursement for $272,654.49 of out-of-pocket costs. They have spent over 11,000 hours litigating the case over nine years. Additionally, $12,500 was sought for the settlement administrator’s costs.
Overall, the court found that the settlement agreement and related requests were fair, reasonable, and in the best interest of the class members, and approved them accordingly.
Key lessons from this case:
- Improper classification of employees as overtime-exempt can lead to legal action
- Class action lawsuits can be filed for overtime violations. This allows multiple individuals with similar claims to join together and seek relief collectively.
- In overtime lawsuits, settlement agreements typically involve employers paying monetary compensation to employees in exchange for the employees releasing their claims.
Learn more about Alaska Labor Laws through our detailed guide.
