"Court OKs Settlement for Chaperons Of Teen Tours Denied Overtime, Breaks"

Bloomberg BNA, Daily Labor Report and Class Action Litigation Report, January 28, 2014

By Joyce E. Cutler

Teen tour chaperons will receive about $1,000 each in a settlement a federal judge approved Jan. 24 to end a class action alleging the leaders were not paid overtime (Wright v. Adventures Rolling Cross Country Inc., N.D. Cal., No. 3:12-cv-00982, settlement approved 1/24/14).

The $500,000 settlement, which includes $15,000 in incentive payments for the two named plaintiffs, ends litigation alleging Marin County, Calif., tour operator Adventures Rolling Cross Country Inc. paid trip leaders less than $2,000 for trips lasting from two weeks to 90 days. Hundreds of leaders were not paid overtime or given duty-free meal and rest breaks during their 16 to 18 hour days, the plaintiffs alleged.

Judge Edward M. Chen of the U.S. District Court for the Northern District of California, also approved the plaintiffs' application for $166,667 in attorneys' fees and $13,315 in litigation costs.

Plaintiffs' co-counsel Bryan Schwartz, with Bryan Schwartz Law in Oakland, Calif., said Jan. 27 more than 85 percent of class members opted into the settlement and will receive payments, with former trip leaders "joining the case from all around the country and as far away as China."

The average recovery is close to the $1,200 wages plaintiffs received for leading a summer trip, according to the settlement motion.

ARCC reclassified all trip leaders as nonexempt with respect to the time they work in the U.S. and California, according to the settlement. The company revised its time and payroll practices to comply with applicable California or federal minimum wage and overtime laws and, as appropriate, with California meal and rest period laws. The result is tens of thousands of dollars of extra wages paid each year, Schwartz said.

"Most importantly, perhaps, is the fact that this case has set a precedent for other providers either offering tours or training to staff in the United States, that it is improper to pay trip leaders a simple stipend without accounting for and paying minimum wages for all hours worked," Schwartz said.

The "camp" exemption for overtime is limited to those organizations centered around a site or facilities that give something like the traditional summer camp experience, "and not for any organization principally offering excursions. We hope that other companies will take note and make changes--and that other trip leaders will notify us where violations have been occurring," Schwartz said.

"The application of the 'organized camp' exemption under the Fair Labor Standards Act was an exceptionally close question," Reed Edward Schaper, co-counsel for Adventures Rolling, told Bloomberg BNA Jan. 28. "Once this court resolved that question as to ARCC's domestic travel/service programs, and its training, the company's decision to revise its compensation structure was straightforward, as was the decision to reach a settlement."

"[P]laintiff-side wage and hour class action lawyers certainly are always looking for the next big 'opportunity,' " Schaper said, but the teen service and adventure travel niche is fairly discrete, and the limited questions at issue here "are not likely an indication of any larger trend." Schaper is with Hirschfeld Kraemer LLP in Santa Monica, Calif.

Classification Practices Challenged.

Plaintiffs challenged defendants' uniform, classwide exemption policy in the lawsuit, originally filed in California Superior Court in February 2012.

Youths pay from $2,500 to $15,000 for the organized tours, according to the plaintiffs. A typical trip would generate $150,000 in gross revenue for ARCC, which organizes dozens of such trips a year. Destinations range from Australia to Alaska.

Chen certified a class of 350 tour operators in 2013.

Along with Schwartz, plaintiffs were represented by David A. Lowe and John T. Mullan of Rudy Exelrod Zieff & Lowe LLP in San Francisco. In addition to Schaper, defendants were represented by Kristin L. Oliveira of Hirschfeld Kraemer in San Francisco


Text of the motion for settlement approval is available at http://www.bloomberglaw.com/public/document/Wright_et_al_v_Adventures_Rolling_Cross_Country_Inc_et_al_Docket_/2

The order approving settlement at http://www.bloomberglaw.com/public/document/Wright_et_al_v_Adventures_Rolling_Cross_Country_Inc_et_al_Docket_/3

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