Adventures In Cheerleading Litigation

Image derived from a creative commons photo by BrokenSphere at wikimedia commons.

It’s actually not all that often that I get to see the sorts of things that I really do all day long in the news. This sort of law is rarely sexy or interesting. But when you’re talking about NFL cheerleaders, well, now there’s all kinds of sexy going on. So the settlement of a wage-hour case involving the Oakland Raider cheerleaders gives me a convenient way to share some insights into my day job.

Wage-hour litigation is about making sure that employers pay their employees their legal wages. When that doesn’t happen, there are quite a lot of ways that we can legally address what partisans like to call “wage theft.” Common issues include:

• Paying less than the minimum wage.
• Paying straight time for work eligible for overtime premiums.
• Paying nothing at all for work eligible for overtime premiums (often on the claim that the employee is “salaried” and therefore ineligible for overtime).
• Not paying wages at all (often under a claim that the time in question is not compensable).
• Mischaracterizing an employee as an “independent contractor.”
• Failing to account for hours worked and wages paid.
• Paying employees late.
• Bounced paychecks.
• Unlawful deductions from paychecks.
• Failure to pay for “on call” time.
• Withholding a final paycheck after termination.
• Withholding earned but unused vacation and sick time cash-outs upon termination.

I look at issues like this all the time. You’ll notice how none of this has to do with terminations — wrongful termination is a whole different dimension of employment law. In a wrongful termination suit, we’re interested in why someone was fired. The employer’s intent matters, and we need to examine the evidence for indicia of intent because no one ever admits, for instance, that they engaged in race discrimination. But in a wage-hour dispute, we’re interested in whether an employee was paid the wages she was entitled to by law — why that didn’t happen is irrelevant. Wage-hour litigation is (mostly) addressed on a strict liability basis.

So the “Raiderette lawsuit” that caught my eye Friday morning when I read reports in the news about its settlement implicates a majority of the sorts of issues I listed above. You can read the complaint in the case, and the executed settlement agreement, courtesy of the law firm that represented the class representatives. What I’m going to do here is walk you all through some of the technical concepts that come up in the case, so a layperson can understand what these documents describe. For lawyers who engage in civil litigation, this will almost certainly be stuff you already know.

Introduction: The introductory paragraph is not mandatory, is of functionally zero legal effect, and I usually skip doing one in my own pleadings. But if I think there might be some media attention, or some other need to quickly acquaint someone without a J.D. with the gravamen of the case, I might write one. This introduction is clinical, direct, blunt, and accusatory: I commend the drafter for that first paragraph.

Parties: The plaintiffs are identified here with only initials for their last names. That’s not normal and the plaintiffs would have needed special permission from the Court to proceed in that fashion. Given that this is the fashion that the employer-defendant encourages the employee-plaintiffs to identify themselves to the public, and given that it’s pretty easily foreseeable that someone might stalk or harass an NFL cheerleader, it was probably appropriate to alter the normal convention that a plaintiff waives a degree of her privacy by filing a public document.

Class Action: A lot of people use this phrase without really knowing what it means, trying to convey the idea that there is a lot of money at stake. Which isn’t necessarily so. A “class action” means that there are a whole bunch of people with very similar claims. So a handful of them, the “class representatives,” file individual suits and seek the Court’s permission to assert the claims for everyone who is “similarly situated” to themselves. Here, we see two members of the Raiderettes representing all of the Raiderettes for from 2010 through the present day. (Why does the time period start in 2010? The statute of limitations.) The class here consists of about 90 individual people, all Raiderettes or former Raiderettes.

Arbitration: This is the real fight in a lot of employment law cases. Employers want cases arbitrated rather than litigated. Arbitrations are not public; we wouldn’t be reading any results of an arbitrated dispute on the Intertubes. They are faster and therefore cheaper than regular litigation, even though at least in California the employer must pay the arbitrator’s entire fee. But most importantly, arbitration awards are, on average, lower than the verdicts juries return. So the risk to the employers of monetary loss is lower. The Oakland Raiders had an arbitration clause in their “employment contract,” and moved to stay the lawsuit to compel arbitration (before the Commissioner of the NFL, no less). Although I’ve not been able to find a direct report of this, the motion must have been denied (and based on my read of the arbitration clause, that was legally the right call).

Settlement: Many people use the term “settlement” without knowing what it means, either. In particular, I’ve noticed people using the word “settlement” when they really mean “verdict.” Here, we see a negotiated resolution to the claims. No jury was ever empanelled; no findings of fact are made; the Oakland Raiders do not admit any wrongdoing although they are paying a substantial amount of money to make the lawsuit go away. Note also that the plaintiffs’ attorneys are being paid out of the settlement pool, with an agreed cap on their fees of one-third of the total amount paid (that’s a bit over $416,000, so not too shabby IMO) but they’ll likely have to bring a motion to get the Court’s blessing on those fees at some point. You’ll also note the proposed “notice of class action settlement” attached as an exhibit to the settlement agreement. This is what will come in the mail to all the class members.

Benefit to Plaintiffs: The class representatives get $10,000 each for sticking their necks out and benefitting all of their co-plaintiffs. All of the plaintiffs who participate will get some money, but the exact amount can’t be determined yet because each member of the class can choose to opt out and pursue their own claims elsewhere. (There is a parallel suit pending brought by different Raiderettes and those individuals who think they’ll do better in that other suit will need to opt out of this one, if the court approves the settlement agreement as written.) The members of the class who do not choose to present individual claims will split a pool of just about $800,000 if I’ve done the maths right. As a side benefit, the Raiders have changed the way they do business with the Raiderettes prospectively; they now are treated as regular employees earning the minimum wage. In California, that’s $9.00 an hour — which increase the income they were making before all this legal activity by a factor of two and a half. Other demeaning terms of the cheerleaders’ employment may be beyond the reach of the law, but we can always hope someone will find a way to balance actual respect for the workers and the desire to put a particular kind of entertainment product out on the field.

Who Gets What: Keep in mind, the settlement pool here is $1,250,000 — an amount in the low seven-figure range. That’s good. That’s big. It’s big enough to get each and every member of that class close to whole. The plaintiffs’ lawyers stand to make over four hundred thousand dollars. Of this, the lawyers themselves will share something between a third to a half, after their overhead is pro-rated into their fees; the remainder will be divided between the four partners of this law firm according to the terms of their own partnership agreement, which is no one’s business but theirs. People get ideas that litigation involves tens of millions of dollars, but most cases are not nearly so valuable as that. This is, in my opinion, a remarkably good result for the plaintiffs.

Suits similar to this one are pending against at least four other NFL teams (the Tampa Bay Buccaneers, the New York Jets, the Buffalo Bills, and the Cincinnati Bengals) and while some of the nuts and bolts of each settlement will be different according to the vagaries of the laws of the various states, the big picture resolution of each of those cases will be roughly similar to what we see here.

My own work is often not quite so glamorous as all of this, and I only rarely get a chance to represent groups of plaintiffs as large as the class in this case (although I have been counsel for plaintiff classes in employment cases, it’s been an infrequent occurrence in my career). But this kind of thing is pretty much the sort of thing that I do when I’m not stuck handling the evictions from the firm’s real estate department. Any questions?

Burt Likko is the pseudonym of an attorney in Southern California. His interests include Constitutional law with a special interest in law relating to the concept of separation of church and state, cooking, good wine, and bad science fiction movies. Follow his sporadic Tweets at @burtlikko, and his Flipboard at Burt Likko.