By his own calculations, Donald Nichols made 50 cents an hour on his first case as a lawyer in private practice, helping tenants sue a shopping center in 1974. “For 10 years I did everything that walked in the door. I did incorporations, I did divorce work — everything I could do,” said Nichols, now 68.
A decade after striking out on his own with a part-time secretary, he undertook a series of cases that helped him find his niche: representing McDonald’s restaurant workers who sued after being forced to take lie-detector tests when money went missing. The cases brought in healthy fees and made Kaster feel that he was helping deserving people.
Nichols Kaster, the firm he founded, now has 33 lawyers and 50 staff members in offices in Minneapolis and San Francisco, and files a new class action nearly every week on behalf of employees or consumers against companies that have allegedly mistreated them.
“Any time you can get your heart and your wallet all lined up in one place is a pretty good place to be,” he said. “To this day, if I watch a boxing match or a football game, I naturally root for the underdog.”
That’s meant representing people like Kevin Kasten, a factory worker at Saint-Gobain Performance Plastics Corp. who sued the company for refusing to pay workers for their time spent putting on and taking off work-related protective equipment. After Kasten was fired, he filed a federal suit claiming retaliation and a violation of the Fair Labor Standards Act. Saint-Gobain won at trial and on appeal at the U.S. Court of Appeals for the 7th Circuit, arguing that Kaster’s oral complaint did not meet the standard of “filing a complaint” under the act.
Nichols Kaster was undaunted; it took the appeal to the U.S. Supreme Court. Partner James Kaster argued for the client’s position, and last March the justices ruled, 6-2, in his favor.
JUSTICE FOR STRIPPERS
Nichols Kaster also sued on behalf of eight current and former exotic dancers who claimed that Atlanta’s Club Onyx illegally classified them as independent contractors to avoid paying minimum wage. The suit was one of a number the firm has brought on behalf of strippers, who often must pay clubs for the right to work for tips. In September, a federal judge in Georgia sided with the Club Onyx dancers; the firm estimates damages could exceed $7 million.
Nichols Kaster lawyers are now organizing class actions against the parent companies of Pizza Hut and Papa John’s in Minnesota, where a court certified a class of 1,600 Dominos pizza delivery drivers represented by the firm in November. At issue are alleged minimum-wage violations over inadequate reimbursement for vehicle expenses and the restaurant chain’s retention of delivery charges paid by customers.
“What happens to a lot of those pizza drivers is that they’re basically just wearing out Mom and Dad’s car to make a living,” Nichols said. “We’re challenging that. That’s what I was born to do. That’s making a difference.”
The firm is credited with mounting the first challenge to a banking practice known as forced-place insurance, whereby lenders require mortgage borrowers to buy flood insurance, often at high rates and even if they don’t live in flood-prone areas. The firm has already filed class actions against Bank of America Corp. and Wells Fargo & Co. and settled for $10 million with a unit of JPMorgan Chase & Co. The practice is under investigation by New York Attorney General Eric Schneiderman. Meanwhile, American Banker magazine recently concluded that evidence to date in one of the Nichols Kaster suits against JPMorgan Chase “suggests serious trouble for the banks.”
Making one’s living filing suits also means losing, as happened after the firm spent seven years working on behalf of 400 former loan officers for Detroit-based Quicken Loans Inc. At issue was whether the firm should pay its loan officers overtime under the Fair Labor Standards Act, or whether such workers are exempt from overtime laws as administrators.
In March, after a six-week trial, the jurors came down on the side of Quicken. On behalf of the loan officers, the firm has appealed. The verdict was particularly painful for Nichols, given that representing loan officers against the banks that employ them has been a specialty of the firm’s. “The Quicken case is our biggest loss,” Nichols said. “I don’t think you’re a real lawyer until you’ve lost at least 10 jury trials.”
Plaintiffs’ firms dependent on contingent fees often suffer from the feast-or-famine syndrome — attorneys spending big on cars and artwork after big wins but facing layoffs after unexpected losses. To provide financial stability, Nichols Kaster is trying to enforce a requirement that each of the seven partners put in $1 million in capital.
“We don’t throw our money away when we win big,” Nichols said. “We pay ourselves a salary. We don’t go hog wild with a big victory. We’ve had enough experience of that.”
Another challenge will be the impending retirement of the firm’s founder. Nichols plans to call it a career when he’s represented 500,000 clients. He’s now at 300,000, but hopes to hit his target in four years.
“I want the world to know I was here; I think at a half-million, I’ll be satisfied,” he said. “I won’t say that we’re always the good guy or any crap like that, but once in a while we get something for regular folks who were cheated. Maybe it will just turn out that we’re just ordinary scumbag lawyers, but I hope not.”
Jason McLure is a freelance reporter in New Hampshire.