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A federal judge has approved a $4.1 million settlement in a class action suit brought by former employees and executives of a Fort Washington, Pa., communications company who said they were cheated out of overtime pay. Under the settlement, 83 employees of Aydin Corp. will be paid sums ranging from $1,468 to $193,936. The suit alleged that Aydin violated the Fair Labor Standards Act when it classified the employees as salaried workers who were “exempt” from the FLSA’s time-and-a-half overtime pay requirements, while nonetheless docking their pay when they were absent for part of a day. U.S. District Judge Anita B. Brody of the Eastern District of Pennsylvaniagranted final approval of the settlement at a hearing in late December. The case is Oral v. Aydin Corp. Brody also awarded fees of more than $1.2 million, which will be paid out of the settlement fund, to plaintiffs’ attorneys Scott H. Wolpert and Charles J. Weiss of Timoney, Knox, Hasson & Weand. Wolpert said he hopes the settlement sends a message to other employers about their responsibilities under the FLSA. “Companies need to recognize that they cannot classify employees as exempt but nevertheless dock their pay if they are absent for part of a workday,” Wolpert said. “To do so is effectively to treat the employees as if they are hourly, non-exempt workers.” According to court papers, the Aydin employees who opted in to the settlement included several former vice presidents, a former in-house lawyer and the former director of human resources. Prior to the settlement, defense lawyers laid out a strategy in court papers for defending the case at trial that focused on offering justifications for docking the pay of lower-level management employees and denying the claims of all of the highest-ranking employees. “While it cannot be disputed that there is evidence that Aydin did engage in a practice of docking certain salary-exempt employees for their partial-day absences, those docked or subject to being docked were in each instance below the level of director,” attorney Larry J. Rappoport of Stevens & Lee wrote in a pretrial memorandum. Rappoport said in the brief that the docked employees had “voluntarily elected not to work a full day, or use available make-up time or available paid leave to offset their partial-day absences.” But Rappoport also insisted in the brief that the docking policy was limited to lower-level managers and non-management employees. “There is no evidence that employees within the higher levels of management and classified as director, assistant vice president, vice president or executive vice president level were docked or subject to an actual practice of partial-day docking,” Rappoport wrote. Rappoport complained in the brief that some of the executive-level former employees who opted into the lawsuit “have now put their hands into the cookie jar seeking payment for overtime work on a theory that they, too, were subject to an actual practice of partial-day dockings like the other salary exempt employees [in order to] permit them to be compensated for all overtime hours worked, whether real or imagined.” In the brief, Rappoport also insisted that Aydin did not have any “actual practice” of docking the pay of salaried employees for partial-day absences. But plaintiffs’ lawyers argued in their pretrial brief that the evidence would prove that Aydin routinely failed to pay overtime to its salaried employees when they worked more than 40 hours in a week, but nonetheless docked their pay in weeks when they logged less than 40 hours. “Dating back to the late 1960s, Aydin in fact followed this policy and enforced a company-wide practice of docking the salary of those employees classified as exempt in the event of a partial-day absence unless … the employee chose to charge the partial-day absence to sick or vacation time, or, if requested and authorized, made up such time other than during normal work hours,” Wolpert and Weiss wrote. An expert report attached to the plaintiffs’ brief said that the Aydin employees who joined in the suit had been cheated out of more than $3.4 million in overtime pay, and more than $640,000 in lost interest on that pay. In the settlement, the 83 workers will share a fund of more than $2.8 million. Those with claims for less than $25,000 will be paid 100 percent of their lost overtime pay, while those with larger claims will be paid between 73 percent and 95 percent of their claim. Plaintiff James Lour, who submitted the largest claim, for more than $265,000 in overtime pay, will receive 73 percent or $193,936, while Eric Anderson, who claimed $30,240 in lost overtime, will be paid 95 percent of the claim or $28,728. The remainder of the $4.1 million settlement will go to offset the costs of five years of litigation and to pay the plaintiffs’ attorneys.

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