$6M PG&E Wage Deal Leaves Judge Suspicious

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Preliminary approval was granted for a $6 million settlement struck between Pacific Gas & Electric Co. and company employees alleging their paychecks were shorted, but U.S. Magistrate Judge Erica P. Grosjean is wary as it appears that the union is hiding something. After giving an early sign-off to the proposed agreement, the judge ruled that the International Brotherhood of Electrical Workers Local 1245 must disclose how much they are paying into the settlement prior to it being finalized. PG&E call center employees allege that the union does not fairly represent them as members.

The judge noted that the hardest part of the workers’ unopposed motion for approval of the deal method of notification to employees about amounts PG&E and the IBEW would each pay into the fund. The judge brought notice to the fact that the union was the only party that objected to the contribution disclosure. The union’s desire to keep their contribution amount undisclosed greatly troubled the judge. Judge Grosjean stated that without disclosure workers would assume payment came from PG&E.

The judge didn’t see any legitimate reason for delaying disclosure of the amount paid until after the settlement is finalized. It gave the impression that the union the information could affect the workers’ decision to accept the settlement’s terms. The judge also stated that the situation left the impression that the union may plan to bury the information eventually disclosed in annual financial reports where workers would not notice or pay attention to the information.

The lawsuit was originally filed in July 2015, alleging:

·       PG&E violated California’s labor law.

·       PG&E failed to pay all wages owed.

·       PG&E falsely advertised wages on a website for a customer service position.

·       PG&E had a consistent policy and practice of failing to abide by the IBEW’s collective bargaining agreement.

The proposed settlement would apply to workers hired for the call center from January 2022 through June of 2015 with a minimum of 18 months of clerical job experience and who were affected by the alleged violations. It is alleged that 175 workers would receive close to $20,000 each because their work experience qualifies them for a higher wage rate. Other workers would receive $250.

If you have questions about California labor law violations or if you need assistance with wage and hour violations, please get in touch with one of the experienced California employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP.

Excessive Investment Fees Result in Agreed Upon $14M Settlement from Fujitsu

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In order to end a proposed class action close to $150 million, Fujitsu agreed to pay a $14 million settlement. The proposed class action alleged that the company paid more in investment fees for retirement funds than necessary affecting close to 23,000 current and former employees.

Workers hope the judge approves the deal that would be worth about $600 for each class member. They argue that it is a favorable comparison to other settlements in ERISA (Employee Retirement Income Security Act) suits regarding excessive fees. The settlement amount proposed is about 1% of the plan’s total value according to the class.

The workers’ unopposed motion for preliminary settlement approval urged the judge to approve the settlement stating that the amount was impressive in aggregate, when considered on a per-capita basis, and when viewed as a percentage of the plan’s assets. It compares favorably to other recent 401(k) settlements by all measures.

Workers originally sued Fujitsu in June 2016 alleging that the company mismanaged the employee retirement plan. Claims insisted that Fujitsu bought more expensive classes of funds than was necessary, deprived workers of returns, failed to monitor record keeping/administrative fees paid, and kept investments in plan offerings that were far too expensive.

Fujitsu first attempted to argue for dismissal claiming that the workers’ claims were based on “hindsight” and that the fees were appropriate and in line with those approved by the court in other suits. Their motion to dismiss was denied in April, but the judge did “leave open the possibility” that the arguments could win at summary judgment or trial. He also noted that some of the workers’ claims could be time-barred.

In September, the parties involved agreed on a draft deal after mediation efforts to reach a resolution. The draft deal was recently finalized and the workers now seek approval.

Approval of the settlement would mean that participants in the class (employees participating in the Fujitsu 401(k) plan between June 2010 and September 2017 would receive payment. The class includes 22,705 members. Close to a quarter of the settlement amount will likely go towards attorney fees and costs.

If you have questions about ERISA or your rights in regard to your employer provided 401(k) accounts, please get in touch with an experienced California employment law attorney at Blumenthal Nordrehaug Bhowmik De Blouw LLP.