In February 2007, fifteen current and former employees of SimplexGrinnell LP, who performed electrical and sprinkler work, including installation, maintenance, inspection, testing, repairs, and replacement of fire alarms and security systems on various public works projects throughout New York, filed this class action lawsuit in the Supreme Court of the State of New York, Kings County. They claimed that SimplexGrinnell failed to pay its employees in accordance with the Prevailing Wage Act, New York Labor Law § 220. Pursuant to the Prevailing Wage Act, New York Labor Law § 220, public works contracts -- i.e., contracts with state or local governmental agencies to perform construction, maintenance and repair of public buildings -- which provide that all laborers will be paid prevailing wages.
The plaintiffs filed the case in state court, but on March 7, 2007, SimplexGrinnell moved the case to the U.S. District Court for the Eastern District of New York, Brooklyn Division. Chief Magistrate Steven M. Gold was assigned to the case.
In 2008, the plaintiffs filed a First Amended Complaint adding further specification to claim relating to sprinkler and suppression work, and added a named plaintiff.
After nearly three years of discovery, the plaintiffs filed motions for class certification and summary judgment on March 18, 2010. The plaintiffs sought certification of a class defined as follows: "[A]ll laborers, workmen and mechanics who furnished labor to SimplexGrinnell on non-federal public works projects in the State of New York at any time from February 6, 2001[, or from July 14, 2001 for sprinkler work] until the final judgment in this matter, and who . . . have not been paid prevailing wages and benefits as required by law." The plaintiffs sought summary judgment for the class and damages in the total sum of $16 million. On March 25, 2010, the defendant filed a cross-motion for summary judgment.
On June 21, 2011, in a published Memorandum & Order, the Court granted the plaintiffs' motion for class certification. 796 F.Supp.2d 346. The Court expressly held that the Supreme Court's recent decision in Wal-Mart v. Dukes
did not warrant a different result. The court also granted the defendant's motion for summary judgment with respect to fire alarm testing and inspection work and plaintiffs' fifth cause of action. The Court denied the plaintiffs' motion for summary judgment.
The defendants filed a motion for reconsideration or a second motion for summary judgment, but that motion was denied on October 4, 2011. Shortly thereafter, the parties agreed to engage in private mediation through November 15, 2011 and to suspend the litigation schedule during that time. Over the next few months, even after the November deadline, the parties continued to work on a settlement and reported regularly to the Court on their progress.
On June 29, 2012, the parties filed a Joint Stipulation and Agreement Regarding Class Action Settlement of Claims Other Than "Testing and Inspection Claims." The Agreement set the settlement amount at $5,525,000 and the amount of the employer's share of payroll taxes to be paid on the settlement shares. The Agreement also allowed for deductions from the settlement amount with court approval for fees and other expenses. The Agreement provided that each class member, excluding the eighteen individuals who previously opted out of the class, receive a share of the settlement proceeds based on the conclusions of David L. Crawford's Expert Report allocating damages. A settlement administrator was to notify all class members of this settlement agreement. Shortly thereafter, the Clerk issued a judgment explaining that the settlement had been accepted.
As it states in its title, the settlement did not cover the testing and inspection claims, and on December 7, 2012, the plaintiffs appealed the District Court's grant of summary judgment on those claims. In a December 4, 2014 Opinion, the Court of Appeals vacated the June 21 memorandum and order in part and remanded the case. 773 F.3d 394. The Court certified two questions on this appeal: (1) “whether a court should give deference not only to an agency’s substantive interpretation of a statute arising from an unrelated proceeding but also to its decision to enforce that interpretation only prospectively”; and (2) “whether contracts committing parties to pay prevailing wages pursuant to section 220 of the New York Labor Law (‘NYLL’) need to specify—when the scope of the statute’s coverage is unclear to the parties—what particular work the prevailing wages will be paid for."
The Court of Appeals answered the first question narrowly, holding that it "will not give the agency more deference than it claims for itself" and based on the fact that the agency had renounced any claim to deference in this litigation, the agency's decision to construe section 220 to cover testing and inspection work only prospectively deserved no deference. As to the second question, the Court of Appeals held that "[a]n agreement to comply with a statute is an agreement to comply with it as correctly interpreted, whether or not the interpretation was known to the parties at the time of the contracting." 21 N.E.3d 237 (N.Y. 2014)
Back in the Second Circuit, based on these answers, the district court's decision granting the defendant's motion to dismiss the plaintiffs' claims relating to testing and inspection work were vacated and the case was remanded to District Court.
Following this decision, the parties reported that they again intended to pursue private mediation. They were ordered to submit a joint report on the status of their efforts to reach a settlement by April 1, 2015, or promptly upon the completion of mediation, whichever came first. The parties finally reached a settlement on February 27, 2015, which was formally approved by the Court on April 24, 2015. This Agreement included a provision providing that the defendant would make changes to its payment practices and, to the extent it has not paid prevailing wages to its workers for testing and inspection work, would commence paying such wages to all its workers for all testing and inspection work done on fire alarms or sprinkler systems in NY on "public works." This change was to be implemented within 15 days of the primary approval of this agreement, and payment to be made retroactive to May 1, 2015, for all testing and inspection work not paid from that date to the implementation of this agreement.
The settlement amount was set at $9,500,000, plus the amount of the employer's share of the payroll taxes, and allowed for deductions from the settlement amount for fees and other expenses. A settlement administrator was to notify all class members of this settlement agreement.
On April 29, 2016, the plaintiffs filed a motion to extend the time allowed to locate class members with uncashed settlement checks--there were 59 such class members, who had failed to cash checks totaling $176,000. Because the settlement agreement explicitly provided that any unclaimed money would revert to the defendant, the Magistrate Judge Gold denied this motion on June 17, 2016. The case is closed. Xin Chen - 07/31/2011
Saeeda Joseph-Charles - 12/29/2016