STARNES v. AMAZON.COM, INC.

CourtDistrict Court, E.D. Pennsylvania
DecidedMay 8, 2023
Docket2:23-cv-00484
StatusUnknown

This text of STARNES v. AMAZON.COM, INC. (STARNES v. AMAZON.COM, INC.) is published on Counsel Stack Legal Research, covering District Court, E.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
STARNES v. AMAZON.COM, INC., (E.D. Pa. 2023).

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA

RICHARD STARNES, MELANIE : CIVIL ACTION ALLEY, ANGEL SKINNER : : v. : NO. 23-484 : AMAZON.COM, INC., AMAZON : LOGISTICS, INC. :

MEMORANDUM KEARNEY, J. May 8, 2023 Congress promotes the enforcement of minimum wage laws under the Fair Labor Standards Act by allowing federal courts to award reasonable attorney’s fees and costs incurred by lawyers representing employees to be deducted from the employees’ recovery. We encourage settlements of these wage claims. The claims are often resolved on behalf of several employees who choose to join the case. We appreciate experienced counsel invests time and expense without guaranty of payment. We also appreciate employees step forward and participate in prosecuting a wage claim against their employer who is often well-funded and motivated to defend its pay structure. We today address the fairness of a proposed pre-suit settlement of wage claims brought by three employees for two companies who deliver Amazon products. The employees stepped forward years ago. Their experienced counsel negotiated their claims before suing along with claims by other employees of other delivery companies. They reached an agreement for over three million dollars in recovery and then filed this case. The wrinkle today does not arise from the fairness of the settlement overall. We approve the fairness of the overall terms to resolve a bona fide dispute. We are instead concerned with a one-third contingency fee (over a $1 million fee) taken from the employees for approximately $300,000 in services to date. We are also concerned with paying $10,000 each to the three employees for playing a role in the case and seemingly agreeing to release all claims regardless of whether their claims relate to the illegal wage structure. The parties first asked us to approve their settlement with these terms taking money away

from the employees without providing billing records or explaining why we deprive all employees of funds to award $10,000 each to three employees. We declined this approach and required the employees show us their records. We studied the records redacted in part to presumably protect descriptions of advices in an ongoing case. We now find the terms of the settlement resolve a bona fide dispute largely related to enforcing the Act. And counsel has now demonstrated a basis for the large amount of fees to be deducted from the employees’ recovery. But counsel has not demonstrated a basis for depriving all employees of the $10,000 fee asked to be paid to each of the three employees as compensation for services and we do not approve depriving all the employees of funds set aside by the employers in exchange for the three employees releasing

potential claims unrelated to the funds set aside to pay their co-employees. We decline to enforce the settlement under the proposed payment to the three employees but we grant them leave to negotiate a payment to the employees consistent with the services provided to all employees under the Act. I. Background1 DeliverOL Global Inc. and Postalmile Inc. offer delivery services to Amazon through Amazon’s delivery service provider program.2 DeliverOL Global Inc. and Postalmile Inc. employ Delivery Associates, including Richard Starnes, Melanie Alley, and Angel Skinner, to deliver packages to Amazon’s customers.3 Delivery Associates Starnes, Alley, and Skinner, and other Delivery Associates began their shifts at a designated Amazon delivery station to check in with an Amazon employee at the Amazon delivery station and pick up their assigned vehicles.4 The Delivery Associates then waited until managers from DeliverOL and Postalmile arrived to provide them with a handheld scanning device containing an assigned route, gas card, and other materials related to their job duties.5

DeliverOL and Postalmile regularly scheduled the Delivery Associates to work four or more days per weeks for ten hour shifts without meal breaks.6 But all of the work-related activities often took ten hours or more per day to complete.7 And once the Delivery Associates finished delivering their assigned packages, they had to “rescue” other Delivery Associates by helping them deliver some of their undelivered packages.8 Amazon required the Delivery Associates refuel their vehicles before returning to their designated delivery stations.9 Delivery Associates unloaded their vehicles once they returned to the delivery station and checked in with their supervisors about the day’s route.10 Delivery Associates Starnes, Alley, and Skinner, and other Delivery Associates performed many of their work duties when they were “not on the clock.”11 But Amazon allegedly did not pay

its Delivery Associates for all hours worked more than forty hours in a workweek and did not pay proper overtime premiums.12 The Delivery Associates notified Amazon of wage-related claims in April 2019. Delivery Associates Starnes, Alley, and Skinner, on April 26, 2019—through counsel led by Sarah Schalman-Bergen, Esquire—notified Amazon.com, Inc. and Amazon Logistics, Inc. of the alleged wage-related claims against the Amazon companies. They told the Amazon companies they intended to sue on behalf of themselves and a collective of similarly situated individuals.13 The parties agreed to engage in pre-litigation resolution of the alleged claims.14 The parties engaged in the alternative dispute resolution process for more than three years exchanging information and data.15 They participated in three mediation sessions overseen by an experienced wage and hour mediator Dennis Clifford, Esquire on July 28–29, 2021, October 27– 29, 2021, and March 8–11, 2022.16 But the time the attorneys spent engaging in the alternative dispute process since 2019 also included other matters involving persons working for other

companies to deliver packages on behalf of Amazon.17 The parties continued to engage in telephone and video discussions overseen by Mediator Clifford following the three mediation sessions.18 These settlement discussions continued into mid-May 2022.19 The parties drafted a settlement agreement on May 17, 2022.20 From May 2022 through November 2022, the parties worked on revising the draft settlement agreement.21 The parties finalized the draft agreement by mid-December 2022.22 All parties signed the final settlement agreement on January 10, 2023.23 The Delivery Associates sue Amazon and ask our approval of the pre-suit settlement. Delivery Associates Starnes, Alley, and Skinner, after already signing the final settlement

agreement, filed a Collective Action Complaint on February 7, 2023 against Amazon.com, Inc. and Amazon Logistics, Inc. seeking all available remedies under the Fair Labor Standards Act.24 There are about 1,588 Settlement Collective Members who were paid by DeliverOL and about 981 Settlement Collective Members who were paid by Postalmile.25 The parties then informed us they reached a settlement on March 3, 2023, less than a month after filing suit.26 The parties moved for our approval of their settlement about two weeks later on March 22, 2023 which they attribute to their pre-litigation discussions, negotiations, and mediations.27 Counsel for the Delivery Associates explain their expertise in matters involving similar claims brought by Delivery Associates and efficiency resulted in this early settlement.28 Terms of the settlement. The parties now ask us to approve their pre-suit settlement. The proposed settlement is between Delivery Associates Starnes, Alley, and Skinner individually and on behalf of the Settlement Collective, and Amazon.com, Inc. and Amazon Logistics, Inc.29 The Settlement Collective is defined as:

Plaintiffs and all Delivery Associates who were paid by DeliverOL Global Inc.

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STARNES v. AMAZON.COM, INC., Counsel Stack Legal Research, https://law.counselstack.com/opinion/starnes-v-amazoncom-inc-paed-2023.