Garcia & Artigliere Obtains $7.5 Million Class Action Settlement Against Holiday Retirement Homes For Unfair Labor Practices

Garcia & Artigliere has obtained a $7.5 million class action settlement against Holiday Retirement Homes, the largest independent senior living provider in the country, for wrongfully misclassifying its resident managers as “exempt” employees to avoid paying overtime wages and other remedies.

U.S. District Court Judge Dolly M. Gee approved the $7.5 million settlement on behalf of more than 3,500 resident managers who were denied proper wages despite working long hours in the company’s retirement facilities. The suit was filed against Harvest Management, dba Holiday, by plaintiff Sallie Cwik in September 2012 on behalf of herself and fellow employees who had been unfairly compensated. She alleged that Holiday resident managers did not perform managerial duties as their primary job responsibility, and therefore were not executive or administrative employees subject to exemptions from overtime and other Fair Labor Standards Act requirements.

Holiday’s resident managers testified they had absolutely no control over the facilities they supervised. In fact, they spent much of their time performing nonexempt duties such as making coffee, assisting residents and handling housekeeping and maintenance issues.

“We are gratified that this settlement offers prompt, certain and substantial recovery to these employees just one year after litigation began,” said Founding Partner Stephen M. Garcia. “The action received an overwhelmingly favorable response from the class, with more than 70 percent of Holiday Retirement employees submitting claim forms and not one class member objecting to the settlement.”

The Court agreed with the plaintiffs’ assertions that the settlement is fair because of the class members’ exceptionally positive response, that meaningful discovery was conducted, that the class counsel had significant experience in this kind of litigation, and that an arms-length negotiation was held by an experienced mediator. All parties agreed this decision represented a reasonable compromise both for Holiday and the class members who can avoid potential risk and minimize legal expenses.

Holiday Retirement Homes, owned by investment management firm Fortress Investment Group LLC (NYSE:FIG), operates more than 300 senior living communities in the U.S. and Canada. While Holiday has agreed to pay up to a total of $7.5 million, including all alleged unpaid wages, penalties, interest, costs, and attorneys’ fees, it denies the allegations and has not admitted any liability or other wrongdoings through the settlement.