Counsel representing au pairs have reached a $65.5 million class action settlement with 15 companies over claims that the organizations mislead the foreign domestic workers about U.S. wage regulations in an effort to pay them below minimum wage.
Boies Schiller Flexner, which represented the au pairs, and the not-for-profit Towards Justice, announced the settlement Wednesday. The case had been set for a trial in early February in the U.S. District Court for the District of Colorado, but the parties agreed to settle the case following mediation efforts by U.S. Magistrate Judge Michael Hegarty.
“We’re pleased that our years of hard work will bring justice to so many young children workers and fundamentally change the way the au pair industry operates,” Boies Schiller attorney Peter Skinner said.
The settlement is subject to court approval.
According to a press release, the defendant companies, including Cultural Care, AuPairCare International and the American Institute for Foreign Study, were authorized by the U.S. State Department to sponsor individuals to participate in the au pair program and receive the needed visa to work in the states. However, plaintiffs alleged that the companies colluded to pay au pairs less than minimum wage and to mislead the workers about whether they were entitled to receive higher wages under state and federal law.
The release said the visas were intended to create a cultural exchange between countries through several initiatives, including au pairs, but, instead of promoting these goals, the au pair program allegedly worked as a source of below-minimum-wage childcare.
The release said that, along with the settlement, the sponsors agreed to reforms, including a requirement that all future au pairs be adequately paid and informed of their rights under U.S. laws.
The case raised fraud, antitrust and fair wage claims.
“This settlement, the hard-fought victory of our clients who fought for years on behalf of about 100,000 fellow au pairs, will be perhaps the largest settlement ever on behalf of minimum wage workers,” David Seligman, director of Towards Justice, said.
The case had been filed in 2014, and, according to Skinner, over the course of the litigation, plaintiffs counsel uncovered numerous statements indicating that the au pairs had been told they were only entitled to a below-minimum wage stipend that had been set by the U.S. government.
“A lot came to this country thinking this is a set stipend, and I don’t have a right to ask for something different,” Skinner said. “There was also powerful evidence of collusion between the sponsors.”
However, in the end, he said, coupled with the amounts the plaintiffs could reasonably expect to receive from a successful trial, the risks that come with bringing a case before a jury and the reforms the defendants were willing to agree to, the parties felt settlement was the best option.
Joan A. Lukey, of Choate, Hall & Stewart in Boston, represented Cultural Care International; Gordon Rees Scully Mansukhani Denver-based attorney Thomas Quinn represented AuPairCare; and New York-based Stephen Macri of Ogletree, Deakins, Nash, Smoak & Stewart represented the American Institute for Foreign Study. Neither of the three could immediately return a call seeking comment late Wednesday.