This was a lawsuit that was known to anyone until the class action settlement mailings came to California Retailers today. You can read the mailing here.
READ THIS CLOSELY AND CAREFULLY. Only you can decide what’s good for you.
Josh Watson, of the law firm of ARNOLD LAW FIRM wrote the following about the settlement documents that the California Retailers have reviewed. This is verbatim.
I have taken some time to review the Notice of Proposed Class Action Settlement in Fortney v Hudsloan. I have some initial thoughts to share. I will be meeting with other lawyers working on the pyramid claims, and will give further information soon. It bears some study.
Before I go on, I need to do an important lawyer thing. This is not a read and roll your eyes thing – it’s important. I can only give “legal advice” to clients. I can give “legal information” to people generally. The difference is that advice suggests what you should do, taking into account all the facts of your situation. Information just talks about a topic. If you use legal information instead of legal advice, that can be bad for you. It’s like taking Tylenol for a headache and missing the tumor because you didn’t actually see the doctor. So in what follows, it is important that you NOT take this post as customized legal advice because doing so might backfire on you. Yes, I do represent LLR consultants. However, this is not a sales pitch. It is an important thing you have to be mindful of. This is legal information only.
1) The notice indicates that there is a settlement of a California-only class action. It only affects people who were consultants in California at any time between 1-1-12 and 10-26-17.
2) The lawsuit asserted that these consultants were employees under California subject to overtime pay, sick time, reimbursement for work expenses, etc. The court did NOT rule on this topic, but the defendants settled. This part is interesting and good for us all. Remember that arbitration clause I’ve been talking about in the conference calls? Well arbitration is harder to force onto employees. This is an interesting data point in the upcoming court proceedings, but it is not conclusive because there was no court order.
3) The court gave preliminary approval for the settlement. It seems to link payment to inventory purchase levels. (I will need to take a road trip to the court to read details from the court file.)
4) The court will hold a hearing on 2/15/18 at 2 pm in Dept 1 of San Benito Superior Court. That is the final approval hearing. At the hearing, the court will determine whether this settlement is OK. There is a MORE IMPORTANT DATE BELOW.
5) On January 11, 2018, your rights (if in California) are affected, regardless of whether or not you do anything. If you do nothing, you get no money and you lose the right to sue. If you fill out the form, you get the proposed amount of money and you lose the right to sue. If you opt-out of the settlement, you get no money, but you keep the right to sue. You can also object to the settlement, which means you are telling the court you want it to disapprove the settlement and tell the lawyers to modify it. ONE WAY OR ANOTHER, YOUR RIGHTS CHANGE ON 1/11/18, SO MAKE SURE TO ACT (OR NOT) WITH INTENTION.
6) I HAVE SERIOUS CONCERNS ABOUT THIS SETTLEMENT. I applaud the actions taken by the plaintiff lawyers. Good on them for taking the case and resolving it so promptly. It looks like they are sending millions back to consultants, which is very honorable. That said, the agreement includes a release that can be construed to be very broad. The agreement releases all claims “that were pled or could have reasonably been pled in the Litigation base on the facts and claims alleged in the Complaint.” This means that if a judge in our case decides that all or part of the pyramid case “could have been pled” in this case, then the pyramid claim gets dismissed for all California clients.
There is another issue too. If you ask for your money as an employee – you get fired from LLR. So you cannot stay with LLR and still get the employee-income due to you. Hmmm…
It would be possible to modify the settlement agreement in this wage-and-hour class action to expressly exclude any claims actually raised in the pyramid cases. However, the lawyers in that case and the judge would have to sign off on the change.
At my end, I and the other class counsel have some studying to do. It is possible that we will object to the settlement, and ask that some limiting language be inserted into the agreement. I presume the plaintiff lawyers in this wage-and-hour class do not have any intention of undercutting the larger claims, but I would bet dollars to donuts that LLR would. It is in their interests to do so. So we will take a very close look and figure out how to best respond.
What should you do? That’s legal advice. What I can say is that we’ll update here, as we have been doing, on our actions. You should be mindful of this situation. Remember that doing nothing means you get no money AND lose your right to sue. (Hmm….) I suggest asking yourself before you agree to the terms whether you would be OK if the only money you got back from LLR – ever – was the amount of money they are offering.
If you want to pursue more money from LLR than is listed in your notice, then the safest bet is to opt out of the settlement, as described on page 3 (paragraph 9).