Free Motion for Hearing or Conference - District Court of Arizona - Arizona

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ROGERS & THEOBALD, LLP 2425 East Camelback Road Phoenix, Arizona 85016 Telephone: (602) 852-5582 Telecopier: (602) 852-5570 Lydia A. Jones, 017178 JENNINGS, STROUSS & SALMON, P.L.C. The Collier Center, 11th Floor 201 E. Washington Street Phoenix, AZ 85004 Telephone: (602) 262-5911 Telecopier: (602) 495-2645 Michael O'Connor, 010399 Attorneys for Plaintiff RYLEY CARLOCK & APPLEWHITE One North Central Avenue, Suite 1200 Phoenix, Arizona 85004-4417 Telephone: 602/258-7701 Telecopier: 602/257-9582 Charles L. Chester ­ 002571 John M. Fry - 020455 Attorneys for Defendant UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA KAYE HUTTON, as an individual and a representative of a class of others similarly situated, Plaintiff, vs. BANK OF AMERICA, N.A., Defendant. No. CV2003-2262-PHX-ROS

JOINT MOTION REQUESTING PRELIMINARY APPROVAL OF PROPOSED COLLECTIVE SETTLEMENT AGREEMENT AND REQUESTING A HEARING RE: FINAL APPROVAL

PHX_DOCS-#769834.3 Case 2:03-cv-02262-ROS 5/16/07

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INTRODUCTION AND RELIEF REQUESTED Plaintiff Kaye Hutton, on behalf of herself and as a representative of the settling collective, and Defendant Bank of America respectfully request that this Court grant preliminary approval to the proposed Collective Settlement Agreement Between Plaintiffs and Defendant Bank of America (the "Collective Settlement Agreement") which resolves all disputes in this matter. Plaintiff and Defendant may be referred to herein as the Parties. As set forth in the proposed Collective Settlement Agreement (Ex. A) and proposed Order preliminarily approving proposed Collective Settlement Agreement (Ex. C), the Parties have negotiated the proposed Collective Settlement Agreement at arms length, and believe that it is a fair and reasonable resolution of a bona fide dispute and merits approval by this Court. Accordingly, the Parties request that the Court issue an Order: (1) granting preliminary approval of the attached proposed Collective Settlement Agreement (Ex. A); (2) approving the form of Notice of Pendency and Settlement of Collective Action for Unpaid Overtime Compensation (Ex. B); (3) setting a claims deadline of no more than thirty (30) days, and an objection deadline of no more than thirty (30) days; and (4) setting a hearing date for early July 2007 for the Parties Joint Motion for Final Approval of the Collective Settlement Agreement.

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 A. Joint Statement

STATEMENT OF FACTS

On October 31, 2003, Plaintiff filed a proposed collective and class action complaint in the Superior Court in the State of Arizona on behalf of herself and all others similarly situated, seeking payment of overtime wages and alleging causes of action for violation of Article 7 of Title 23 of the Arizona Revised Statutes, A.R.S. § 23-350, et seq., and the Fair Labor Standards Act ("FLSA") 29 U.S.C. § 201, et seq. The complaint alleged the existence of questions of law and fact common to the proposed collective, including (1) the exempt or non-exempt nature of their duties, (2) their entitlement to unpaid wages related to working off the clock, (3) the method of determining regular rate and overtime premium for overtime work, and (4) the entitlement to liquidated damages under the FLSA. The complaint further sought

recovery for overtime wages, liquidated damages, attorneys' fees and costs. Defendant denies all allegations in the complaint and contends that it has defenses to all claims and has acted lawfully in all respects. On November 19, 2003 Defendant removed this action to the United States District Court for the District of Arizona. On December 22, 2003, Plaintiff filed a Motion to Proceed as a Collective Action under the FLSA, and in connection with that Motion, on January 20, 2004 filed hers and three (3) additional consents to become a party and join the collective. Oral argument on Plaintiff's Motion to Proceed was held on February 3, 2004, after which

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the Parties agreed to submit a joint stipulation to stay this matter to pursue mediation. By Stipulation and Court Orders, this action was stayed until December 22, 2004. During the stay, each of the Parties filed motions to lift the stay, and on June 23, 2004, Plaintiff also filed a Motion for Class Certification. On August 6, 2004, the Court denied the Parties' respective motions to lift the stay and denied Plaintiff's Motion for Class Certification without prejudice. On December 22, 2004, the Court granted Plaintiff's Motion to Proceed, and collective certification was conditionally granted, notice issued, and thirty-three (33) additional individuals opted in; for a total of thirty-seven (37), including Plaintiff (the "Opt-Ins"). On October 7, 2005, Plaintiff filed a Motion to Expand Conditional Certification of the Collective Action, seeking to extend the statute of limitations for the existing Opt-Ins from two (2) to three (3) years and seeking to expand the collective beyond the State of Arizona. On November 9, 2005, the Court made a conditional finding of

willfulness and consequently conditionally extended the statute of limitations for the Opt-Ins from two (2) to three (3) years, but declined to expand the collective beyond the State of Arizona. During 2005 and through 2006, the Parties engaged in extensive discovery, exchanging thirty-five (35) supplemental disclosure statements and over nine thousand (9,000) pages of documents. The Parties took over fifteen (15) depositions in five (5) different states, and both Parties retained and disclosed wage and hour experts in this

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action. The Parties engaged in extensive expert discovery, including exchanging expert reports, several supplemental expert reports, and conducting expert deposition discovery. The Parties also worked with the Court to resolve several discovery disputes, including a dispute relating to the discoverability of notes taken in May 2000 by now deceased attorney Barbara Davis. In June 2006, Defendant filed a Motion to Decertify the Collective, a Motion for Summary Judgment on all issues relating to liability and certain issues relating to damages. Plaintiff filed a Motion for a Final Finding of Willfulness. The Parties submitted extensive responsive and supplemental briefing, as well as Statements of Fact and supporting evidence, to the Court. Both Parties also filed motions to strike evidence proffered by the other. Specifically, Defendant filed a motion in limine to strike

Plaintiff's expert's opinions and Plaintiff filed a motion to strike an affidavit in support of any reliance of counsel/good faith evidence. On September 14, 2006, and November 2, 2006, the Court issued discovery orders regarding the discoverability of attorney Barbara Davis's notes. On November 13, 2006, Defendant appealed the discovery order of the Court and on March 19, 2007, the appeal was dismissed. By Orders dated March 29, 2007 and March 31, 2007, the Court: (i) denied in part and granted in part Defendant's Motion for Summary Judgment; (ii) denied Defendant's Motion for Decertification; (iii) denied Plaintiff's Motion for a Final

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Finding of Willfulness and ruled that such issue would proceed to the jury; and (iv) denied Defendant and Plaintiff's respective Motions to Strike as moot. On April 11, 2007, Defendant filed a Motion for Clarification, seeking clarification of portions of the Court's Orders regarding Decertification and Summary Judgment. By Court Order, Plaintiff was to respond by May 10, 2007. On April 27, 2007, the Court set a jury trial in this matter to commence on June 19, 2007. The Parties' Joint Statement of the Case and proposed Juror Questionnaires are currently due to the Court on May 16, 2007. Beginning in April 2004 and through April 2007, the Parties engaged in numerous settlement discussions, spanning five (5) mediation sessions (April 2004, August 2004, August-September 2005, May-June 2006, and January 2007-April 2007) and several intermittent private settlement discussions between the Parties. The mediation sessions were conducted by Mark Rudy, an experienced wage and hour mediator and trial attorney; Mr. Rudy has served as a mediator in employment and business-related matters for over 16 years, during which time he has mediated approximately 2,500 matters with a high degree of success. The settlement discussions and negotiations through mediation, including several mediator's proposals, have been successful and have directly led to the proposed Settlement Agreement now being submitted by the Parties to the Court for approval.

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B.

Plaintiff's Statement Regarding Settlement--Unopposed by Defendant

Although Plaintiff contends that the evidence set forth below (and previously submitted to the Court in connection with the several motions filed in this matter), supports her claim for liability and damages, Plaintiff, on behalf of herself and the OptIns, recognizes the risks associated with proceeding to trial. Accordingly Plaintiff submits to the Court that the proposed Collective Settlement Agreement is fair and reasonable. The Misclassification Claim Plaintiff contends that the evidence at trial will show that the client manager's primary duty was sales, and that it is even more evident that client managers are nonexempt sales people under the August 2004 Regulations: "[a]n employee whose primary duty is selling financial products does not qualify for the administrative exemption." 29 CFR 541.203. In addition, plaintiff's expert would testify at trial that the client

manager's primary job was sales and as such they did not relate to the management policies or the business operations of the Bank in a significant way. Plaintiff further contends that the evidence at trial would show that client managers did not regularly exercise discretion and independent judgment. For example, Plaintiff contends that trial testimony would show that client managers had little control over their jobs, what they did, what they talked about, and how they conducted themselves. Plaintiff contends that client managers had no say in bank management or policies, and they officed in cubicles, often wearing headsets since they were frequently on the phone selling Bank products. This evidence notwithstanding, Plaintiff is cognizant of the risks of proceeding to trial on the misclassification claims. The settlement is fair and reasonable since it allocates recovery in the form of twelve hours per week at an overtime rate of pay of

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$55.00 per hour and assumes 42.5 work weeks per year for the Opt-Ins during the misclassification time period of 2000 through March 2003. Off the Clock Claim Plaintiff contends that the evidence at trial would demonstrate that client managers were instructed by their market managers to work off the clock. Opt-Ins would testify that they were subject to the Bank's explicit and implicit instructions to work as many hours as it took to meet the Bank's sales goals, but not to record all hours worked, including because there was insufficient money in the budget, because it would take overtime hours away from other client managers on the team, and because they should just take "comp time." In addition, Opt-Ins would testify that Bank market managers pressured client managers to work off the clock and not report overtime; this environment was created in group meetings where, for example, market managers told client managers that their (market manager's) budgets restricting the number of hours that could be reported as overtime. Further, plaintiff contends that the evidence would show the defendant was aware that the client managers were working but not recording overtime hours and that client managers were not being compensated for these hours. In any event, Plaintiff contends the same market managers who encouraged the under-reporting of hours worked signed off on the client manager time sheets thereby further encouraging off the clock work. In addition, Plaintiff contends the evidence will show there were group "reprimands" when client managers recorded all the hours they actually worked, client managers were told that if their sales were down, that was an issue, and correspondingly recording all your hours worked when you were not producing good sales results would be as well. Finally, plaintiff contends the evidence would show that given the "crazy refi" times during the relevant time period, given that client managers had well in excess of

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the targeted 350 book of clients ­ indeed some had as many as 500 ­ 800, given that the sale goals were ever increasing, and given the explicit and implicit instructions not to record overtime hours worked ­ the market managers and the Bank encouraged the client managers to work hard and meeting the sales goals ­ which of course could not be completed in 40 ­ 45 hours per week. The settlement is fair and reasonable since it allocates recovery in the form of seven hours per week at an overtime rate of pay of $55.00 per hour and assumes a 42.5 work week year for the Opt-ins during the entire time Plaintiff submits the Opt-Ins worked off the clock from March 2002 through June 2005. Damages The Court has ruled that the issue of whether the defendant acted willfully may be submitted to the jury. Plaintiff contends that the jury will likely find willfulness against the defendant, although it is cognizant of the risk that it may not. Should the jury confirm the Court's conditional finding of willfulness, then the Opt-Ins would be entitled to damages for an additional year. The Parties have consistently disagreed over whether the overtime formula for submission to the jury would be time and one half, as argued by the Plaintiff, or half time, as argued by Defendant. Plaintiff submits that the settlement is fair and

reasonable since it allocates damages over that additional year period. In addition, it is fair and reasonable since it allocates recovery under the time and one-half formula, and not the lesser calculation of half-time. And finally, it is fair and reasonable since the agreed upon $55.00 overtime rate of pay is consistent with the Opt-Ins testimony. C. Defendant's Statement Regarding Settlement--Unopposed by Plaintiff The evidence in support of the Bank's defenses and issues of proof relating to damages set forth in this section lead the Bank to believe that it would prevail at a trial

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on the merits. However, the Bank recognizes the risks associated with proceeding to trial. Thus, the proposed settlement agreement is fair and reasonable. Defendant contends that the Opt-Ins were and are properly classified as exempt administrative employees under the FLSA. Defendant also contends that when the OptIns were overtime eligible, they were paid for all hours Defendant knew or should have known they worked. The Misclassification Claim Defendant has the burden of proving by a preponderance of the evidence that the Opt-Ins qualified for the administrative exemption from overtime pay. An employee is an exempt administrative employee if the employee: (1) is compensated on a salary basis of not less than $455 per week; (2) has as a primary duty the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer's customers; and (3) whose primary duty includes the exercise of discretion and independent judgment with respect to matters of significance. 29 C.F.R. § 541.200. Because summary judgment has been entered in favor of Defendant on the salary element of the test for the administrative exemption, and the Opt-Ins performed office or non-manual work, Defendant must only prove that each Opt-In's primary duty consisted of: (1) performance of work directly related to the management or general business operations of the employer or the employer's customers; and (2) exercise of discretion and independent judgment with respect to matters of significance. Work that is directly related to the management of general business operations of the employer is defined as "work directly related to assisting with the running or servicing of the business, as distinguished, for example from working on a

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manufacturing production line or selling a product in a retail or service establishment." 29 C.F.R. § 541.201(a); In re Farmers Ins. Exchange, 481 F.3d 1119, 1127 (9th Cir. 2007). The exercise of discretion and independent judgment involves the comparison and evaluation of possible courses of conduct, and acting or making a decision after the various possibilities have been considered. 29 C.F.R. § 541.202(a). Discretion and independent judgment do not necessarily imply that the decisions made by the employee have a finality that goes with unlimited authority and complete absence of review. 29 C.F.R. §§ 541.202(c) and (e); In re Farmers Ins. Exchange, 481 F.3d at 1130. Defendant contends that employees in the financial services industry are ordinarily considered to meet the duties requirements for the administrative exemption if their duties include work such as collecting and analyzing information regarding the customer's income, assets, investments or debts; determining which financial products best meet the customer's needs and financial circumstances; advising the customer regarding the advantages and disadvantages of different financial products; and marketing, servicing or promoting the employer's financial products. See 29 C.F.R § 541.203(b). Defendant contends that the Opt-Ins deposed testified that they did all of these things. Defendant recognizes that an employee whose primary duty is selling financial products does not qualify for the administrative exemption. Id. Defendant

contends, however, the Client Managers' primary duty was relationship building. Defendant contends that if the employee is her clients' primary contact with the defendant, the administrative exemption applies. Mathews v. Professional Golfers' Ass'n., 2001 WL 1336334 (S.D. Fla. Sept. 14, 2001) ("When a plaintiff is the primary contact with the employer's customers, . . . the exemption applies."); Orphanos v. Charles Indus., 1996 WL 437380 (N.D. Ill. July 29, 1996) (plaintiff who was often

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customers' sole source of advice was exempt). Defendant contends the Opt-Ins deposed testified that they were. Defendant contends that the Code of Federal Regulations and recent Department of Labor Opinion Letters provide that servicing existing customers, promoting the employer's financial products, and advising customers on the appropriate financial product to fit their financial needs are duties directly related to the management or general business operations of their employer or their employer's customers, and performance of those duties requires the exercise of discretion and independent judgment. 69 Fed. Reg. 22122, 22,146; DOL Wage & Hour Div. Op. Ltr. FLSA200631, 2006 WL 2792445, at p. 4 (Sept. 8, 2006); In Re Farmers Ins. Exchange, 481 F.3d at 1128-29. Defendant contends that the Opt-ins deposed testified that they did these acts. Because of the skills required to perform this job, Client Managers receive a high salary, plus the potential for a large incentive bonus, that Defendant contends today often results in annual compensation over $100,000. The Off-the-Clock Claim To establish a claim for working off the clock, an employee who has signed a time sheet as an accurate representation of all time worked must prove with definite and certain evidence that (1) she actually worked overtime, (2) the amount of overtime worked (by justifiable and reasonable inference), and (3) the employer had actual or constructive knowledge of the overtime worked. Slattery v. HCA Wesley Rehabilitation Hosp., Inc., 83 F.Supp.2d 1224, 1230 (D. Kan. 2000). The timesheets filled out and signed by the Opt-Ins specifically state, "I understand that I am responsible for accurately reporting all time worked, including any overtime, and that my failure to do

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so may result in disciplinary action. I certify that the above is an accurate record of time worked during this period." An employer is relieved of liability if it took reasonable steps to prevent employees from working unrecorded overtime, but an employee worked unrecorded time nonetheless. Pforr v. Food Lion, 851 F.2d 106, 109 (4th Cir. 1988); In Re Food Lion Effective Sched. Litig., 861 F. Supp. 1263,1272-77 (E.D. N.C. 1994). Defendant contends that the evidence at trial would demonstrate that effective March 1, 2002, Client Managers were reclassified as over time eligible. Defendant contends that the evidence will demonstrate that briefings were held, and talking points and tips were distributed to ensure implementation of the reclassification. These talking points and tips clearly state that "[w]hen a position is classified as overtime eligible (non-exempt), all associates in that position are required to be paid overtime pay for time worked over the state or federal requirement." The Overtime-Eligibility Guide for Associates notes (a) "accurate reporting of hours worked is required," and (b) "double-check all information on the timesheet to make sure it is accurate." Defendant would present evidence that Market Managers held meetings in each market to instruct Client Managers on how to complete time cards and keep track of their hours of work. Defendant would also present evidence that Bank executives met with Market Managers and stressed with them the need to ensure that Client Managers

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were preparing their timesheets accurately and were being appropriately compensated for all hours worked. The Bank would also present evidence that many Opt-Ins recorded a great deal of overtime, with no apparent pattern, and would also present evidence that Market Managers never told Opt-Ins that they should not record all time worked, and that no one was ever refused a request to work overtime. Proof of Overtime Wages Allegedly Due Defendant contends that difficulties in proof of overtime allegedly owed also confronts the Opt-Ins. Client Managers were given ten holidays, one month of vacation, and sick time each year. Defendant contends that Opt-Ins did not work more than 38 full weeks a year. If a jury should find that the Opt Ins were misclassified, the calculation of wages becomes an issue. Defendant contends that the evidence will show the Client Managers were paid a fixed salary on the 15th and last day of each month, regardless of whether they worked more or less than 40 hours per week during the payroll period. Therefore, Defendant contends the overtime calculation for the period of misclassification would be limited to ½ hour for each hour worked over forty in a given week. See 29 C.F.R. § 778.114. Similarly, if a jury should conclude that Defendant knew or should have known that certain Opt-Ins were not recording all hours worked, a damages "mini-trial" will be required for each such Opt-In. Defendant contends that each Opt-In that the jury finds did not record all overtime must, for each pay period during the overtime-eligible time frame, prove with reasonably certainty the number hours he or she did not record, after taking into account the varying number of hours in each pay period that each Opt-In did record (and was paid for).

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No court or administrative agency has ever found that Defendant misclassified Client Managers. Defendant believes the Client Manager job as designed, recruited for and trained for is exempt And that a finding of willfulness clearly is not warranted in this action. Defendant believes alleged evidence to the contrary is inadmissible. In light of the foregoing, Defendant believes in good faith that the proposed collective settlement agreement is a fair, reasonable, and efficient settlement of the OptIns' claims. MEMORANDUM OF POINTS AND AUTHORITIES A. Approval of Settlement & Notice to the Collective in FLSA Actions

The proper procedure for obtaining court approval of the settlement and compromise of FLSA overtime private litigation claims in a collective action is for the parties to present to the Court a proposed settlement, first for preliminary approval, then (after a notice of the settlement preliminarily approved by the Court is sent to the collective) for final approval. Once preliminary approval is granted, the Court entertains the Parties' Motion for Final Approval, along with Collective Counsel's Application for Attorneys Fees and Costs. See generally Yue Zhou et al v. Wang's Restaurant, 2006 U.S. Dist. LEXIS 84397 (N.D. CA 2006). In order to grant approval of a proposed settlement agreement of overtime claims under the FLSA, the court must review the settlement for fairness. See Yue Zhou et al v. Wang's Restaurant, 2006 U.S. Dist. LEXIS 84397 (N.D. CA 2006) (citations omitted). In reviewing the fairness of such a settlement, a court must determine whether the settlement is a "fair and reasonable resolution of a bona fide dispute." Id. at *5 (citing Lynn's Food Stores, Inc., 679 F. 2d 1350, 1355 (11th Cir. 1982). Fairness hearings are not normally evidentiary hearings. Id. at *7, n.4 ("Hearings on the fairness of FLSA settlements normally should not need to be evidentiary hearings.")

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"If a settlement in an employee FLSA suit does reflect a reasonable compromise over issues, such as FLSA coverage or computation of back wages, that are actually in dispute[,] ... the district court [may] approve the settlement in order to promote the policy of encouraging settlement of litigation." Id. at *5 (quoting Lynn's Food Stores, Inc., 679 F. 2d at 1355). In determining whether a settlement of FLSA overtime claims is a "fair and reasonable" resolution, courts adopt the factors used in approving the settlement of Federal Rules of Civil Procedure, Rule 23 class actions. Dail v. George A. Arab, 391 F. Supp. 2d 1142 (USDC Mid. Dist. Fla 2005). Those factors are: (1) the complexity, continued expense, and likely duration of the litigation; (2) the stage of the proceedings and the amount of discovery completed; (3) the probability of plaintiff's success on the merits; (4) the range of possible recovery; (5) the opinions of the counsel; and (6) that the Settlement is not the product of any fraud or collusion. Id. at 145-1146 (citing Leverso v. SouthTrust Bank of Ala., Nat. Assoc., 18 F.3d 1527, 1531 n.6 (11th Cir. 1994)). When considering these factors, the Court should keep in mind the "strong presumption" in favor of finding a settlement fair. Id at 1146 (citing Cotton v. Hinton, 559 F.2d 1326, 1331 (5th Cir.1977)). In addition, under Rule 23, the notice of the preliminary settlement to the collective, here the Notice of Pendency and Settlement (Ex. B), is reviewed by the Court to ensure that it is reasonably calculated to apprise the collective of the terms of the settlement and the opportunity to present objections. See generally F.R.C.P, Rule 23(e); Mendoza v. United States, 623 F.2d 1338, 1351 (9th Cir. 1980) (citation for cert denied sub. nom. omitted). Here, and as further discussed below, the Parties jointly submit to the Court that the standard for preliminary approval of the proposed Collective Settlement Agreement

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(Ex. A) and for preliminary approval of the proposed Notice of Pendency and Settlement of Collective Action for Unpaid Overtime Compensation (Ex. B) is met in this case. B. The Proposed Collective Settlement Agreement is Fair and Reasonable The Parties agree and jointly submit to this Court that the proposed Collective Settlement Agreement is a fair and reasonable resolution of the claims under the Fair Labor and Standards Act of 1938, as amended, 29 U.S.C. § 201 et. seq. (and Ms. Hutton's state law claim). That is, they agree that the proposed Collective Settlement Agreement is fair and reasonable because of: (1) the complexity, continued expense for both parties, and likely duration of the trial court proceedings and potential appeals; (2) the stage of the proceedings (having now completed discovery and dispositive motion practice, and trial to begin June 19, 2007) and the vast amount of formal and informal written and deposition discovery as described in detail on page 4 supra, completed over a nearly two (2) year period; (3) the probability of plaintiff's success on the merits and of defendant's defenses; (4) the range of possible recovery (including those ranges proposed confidentially in mediator Mark Rudy's recent proposals); and (5) the opinions of all counsel that the Collective Settlement Agreement is fair and reasonable. Undersigned counsel, by their signatures on this Joint Motion, represent and warrant to

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this Court that the proposed Collective Settlement Agreement is not the product of any fraud or collusion. In addition, where as here, the settlement involved arm's length bargaining (including with the assistance of an experienced mediator), there was sufficient and comprehensive discovery and investigation of the issues, counsel for the collective class and for the defendant are experienced, and the number of potential objectors is likely to be de minimis -- if any are submitted at all -- then there is an initial presumption of fairness and this Court should grant preliminary approval of the proposed Collective Settlement Agreement. See 4 Albe Conte & Herbert B. Newberg, Newberg on Class Actions, Section 11.41 at 93 (4th ed. 2002). Moreover, the proposed Collective Settlement Agreement provides for substantial guaranteed monetary relief to compensate the Opt-Ins who submit a valid release. After payment of the Collective representative's incentive award of $75,000.00, payment of Attorneys' Fees in the amount of $732,600.00, plus an additional $300,000.00 that does not pass through the settling collective as attorneys' fees, payment of actual Attorney Costs in the amount of $135,000.00, and payment of the Claims Administrator's Costs not to exceed $6,250, a Net Settlement Amount of $1,251,150.00 will be distributed to the 37 Opt-Ins as back overtime wages. The Net Settlement Amount shall be distributed according to a standard formula for each Opt-In and across a nearly five-year work period. Specifically, the following formulae shall be used to distribute the Net Settlement Amount of up to $1,251,150.00:

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$55.00 for each overtime hour calculated as follows: (a) twelve (12) overtime hours per work week during the pretime card period of 10/31/2000 through 3/1/2002; plus (b) seven (7) overtime hours per work week during the post-time card period of 3/1/2002 6/15/2005, where each work year from 2000 ­ 2005 shall be deemed to include Forty Two and One Half (42.5) work weeks. Further, the Parties have agreed, and stipulate to this Court, that the Collective representative's incentive award and that the maximum Claims Administrator Costs are fair and reasonable. The Parties have also agreed, and stipulate to this Court, that the formulae for and the distribution of the net settlement amount are fair and reasonable and merit preliminary approval by this Court. Finally, the Defendant does not oppose the allocation from the Settlement Amount funds designated as Attorneys' Fees and Attorneys' Costs for counsel for the Plaintiff and the Collective members. C. The Proposed Notice of Pendency and Settlement of Collective Action for Unpaid Overtime Compensation is Reasonably Calculated to Apprise the Collective of the Terms of the Settlement and the Opportunity to Present Objections

The proposed Notice of Pendency (Ex. B) is reasonably calculated to apprise the Opt-Ins of the terms of the settlement. In essence, the Notice states that a settlement has been reached and that Opt-Ins may share in the proceeds of that settlement upon the execution and submission of a valid and timely release. The Notice also sets forth the essential terms of the settlement, including the amount of the settlement and the uniform formula pursuant to which each Opt-In's recovery will be calculated. Finally, the

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Notice informs the Opt-Ins of where to obtain additional information regarding the settlement, including obtaining court files and/or a copy of the proposed Collective Settlement Agreement from Collective Counsel. The Notice also provides the amount the collective representative, Ms. Hutton, would receive as an incentive award for the risks and burden borne by her as Collective representative. The Notice further provides the terms under which Collective Counsel's attorneys' fees and costs would be paid, as well as the fees for the Claims Administrator Costs. The Notice clearly spells out the responsibility of the Opt-In to timely return a Release in order to participate in any recovery. It also clearly states that should a collective member fail to submit a valid and timely Release, their prorated portion of the Net Settlement Amount shall be returned to the Bank and that such collective member shall nonetheless be bound by the Collective Settlement Agreement. The Notice also sets forth a process and procedure for the Opt-In to object to the proposed collective settlement and informs the Opt-Ins of the right to participate in the hearing regarding final approval of the proposed Collective Settlement Agreement. Finally, the Notice should be approved by this Court for mailing by the Claims Administrator to the Opt-Ins under the procedures set forth in the proposed Collective Settlement Agreement. That is, upon the Court's preliminary approval of the

settlement, Collective Counsel shall deliver to the Claims Administrator the US mailing addresses of the Opt-Ins. These addresses have been verified by Collective Counsel to be reasonably current. The Claims Administrator shall mail the Notices within ten (10) days of receipt of the addresses and the Opt-Ins shall have thirty (30) days in which to return to the Claims Administrator the executed Release. In sum, the proposed Notice of Pendency and Settlement is reasonably calculated to apprise the collective of the terms of the settlement and the opportunity to present

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objections, and the parties respectfully request that the Court approve it for mailing to the Opt-Ins. DATED this 16th day of May, 2007. JENNINGS, STROUSS & SALMON RYLEY CARLOCK & APPLEWHITE _/s/Michael J. O'Connor________ By: Michael J. O'Connor, Esq. 201 E. Washington St. Phoenix, AZ 85004 and ROGERS & THEOBALD, LLP 2425 East Camelback Road Phoenix, Arizona 85016 Lydia A. Jones, Esq. Attorneys for Plaintiff __/s/Charles L. Chester_________________ By: Charles L. Chester, Esq. One North Central Avenue, Suite 1200 Phoenix, Arizona 85004-4417 Attorneys for Defendant

Case 2:03-cv-02262-ROS

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