Adventures In Cheerleading Litigation

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 LikkoBurt 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.

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45 thoughts on “Adventures In Cheerleading Litigation

    • Explore around the website of the plaintiffs attorneys in this case and you will see them make this exact claim. If it’s a cynical claim or not, I can’t say. But it’s a very common one.

      Although recall that arbitrators — truly neutral ones — do find liability and issue damage awards in favor of employee claimants with regularity. If it’s a thumbs-up-versus-thumbs-down question, arbitration doesn’t seem to matter much. The practical difference is that awards tend to be smaller once the thumbs-up is earned.

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      • I am saddened that Wikipedia does not consider Peter Seitz notable enough for his own entry.

        However, there is someone of the same name who is a German-born graphic designer in Minnesota.

        When I looked this up, I made a connection between Peter Seitz and Donald Trump. Sort of a Wikipedia version of Seven Degrees of Kevin Bacon. I went from Peter Seitz to Seitz Decision to Marvin Miller to Michael Weiner to H Lee Sarokin (who was the judge who set The Hurricane free) to Maryanne Trump Barry (who followed Sarokin as Judge of the United States Court of Appeals for the Third Circuit) to Donald Trump (who is Barry’s younger brother).

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    • There is a general feeling that arbitrator’s tend to be more favorable towards employers/corporate clients among plaintiff’s lawyers. Plaintiff’s lawyers would rather get this case in front of a jury that they can at least partially select or work with the defense in empanelling especially in a place as liberal as Alameda County.

      Arbitrators tend to be former judges and judges tend to come from corporate defense more than plaintiff’s law. Obama appointed a Federal District judge who was a big plaintiff’s lawyers and the Chamber of Commerce and Club for Growth nearly had a stroke.

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  1. But most importantly, arbitration awards are, on average, lower than the verdicts juries return.

    How much less? Is this true even after accounting for attorney’s fees?

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  2. 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.

    I got a chuckle out of this, considering that the entire premise of the case is that how revenues are divided among the participants in an enterprise is other people’s business.

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    • I mention this for the purpose of disabusing the reader of the notion that these attorneys will be buying mansions and Bentleys with the money they took from a hapless professional football team. If it’s a share-alike partnership, on the best day I can reasonably imagine, the lawyers will get about $50,000 each for their work. A good amount of money, yes, but not an extraordinary sum. If you could do one such case a month, that’s be really good. But still not a million dollars a year.

      Nb, they’re still many months away from getting paid, the exact amount of money-in-the-lawyers’-pockets remains indeterminate, and they could have lost and took nothing.

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      • But this is not going to be their only case for the year.

        Plaintiff’s litigation is a gamble. You can have lots of cases that pay a lot less than you expected. You can also have cases that pay a lot more than expected. There might be years without any cases paying anything.

        But all the really rich lawyers I know are plaintiff’s lawyers or doing it right can eventually lead to a solidly upper-middle class existence with year end payments per a partner of around a million dollars or more. This can be supplemented with money during the year.

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      • You speak truth, . If this was the only case this firm settled or won this year, easily the whole award of fees would go to overhead and the lawyers would take home nothing at all. But of course they’ll have dozens if not hundreds of lower-profile but substantively similar cases, likely most of which are on behalf of individuals rather than classes. If they’re good, and all available evidence suggests they are, they’re making pretty decent money.

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  3. It’s remarkable to me how unnecessary this seems. The Raiders are not like a McDonalds where the labor costs of the least-valuable workers make a significant impact on the bottom line. Heck, they could go crazy and pay them $10/hour, and it might not make much of a difference.

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  4. it was probably appropriate to alter the normal convention that a plaintiff waives a degree of her privacy by filing a public document.

    I disagree. There are plenty of famous attractive women whose last names are known.

    Of course, those women tend to be rich. As Howard Stern once said, it is a nightmare to live as a famous person who isn’t rich.

    Having said all that, I was on the cheerleaders’ side in this situation. It is scary how many people reflexively take the big corporation’s side in these situations. Ironically, most of these people would identify as Christian. BTW, telling people that they are hypocrites vis-a-vis their religion isn’t a good way of making friends.

    At least the Raiders are agreeing to keep having cheerleaders. They could have been spiteful and gotten rid of them. After all, it isn’t a requirement for a team to have cheerleaders. A number of old-school teams don’t. Out of the 12 teams that existed before the AFL, 6 of them don’t: the Bears, Browns, Lions, Packers, Giants, and Steelers.

    One recent addition to the list is the Buffalo Bills. After getting sued, they decided to disband their cheerleaders. Stay classy, Buffalo Bills.

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    • IIRC, the Packers have never had their own cheerleaders but borrowed them from local high schools, and today use cheerleaders enrolled at UW-Green Bay who wear green and gold uniforms. Not sure what the monetary arrangement is.

      You’ve got a fair point there re: privacy and filing public documents. There needs to be a good reason why the public isn’t told what a court is doing, and that includes getting to know who gets what as a result of judicial process. I see an unusual potential for violence here justifying minimal concealment of identity, but I can see the notion that this isn’t really any more unusual than any other case where the litigants’ names are public record.

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      • They were not invited to Super Bowl 45. Since they played the Steelers, it was the only Super Bowl ever with no cheerleaders.

        Maybe I am biased because the Giants are my favorite team, but I always thought that the concept of NFL teams having cheerleaders was low-class. Much like college football.

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  5. Interesting post Burt.

    I’ve done some research and writing on wage and hour cases when I was a summer law clerk at a firm. Those cases were with people who were wrongfully labeled assistant managers and managers for a very large retail chain. Retailers like to give out assistant manager titles like candy because they think it means they can turn someone into a salaried employee at 30,000 or so a year and have them work longer hours. As I understand it, the retailer usually if not always losses these cases. Sometimes I have to question the judgment of actual management about why they keep trying to do this because it never works.

    On the other hand, Goldman Sachs might get away with making Vice President a meaningless title:

    http://www.bloombergview.com/articles/2014-09-04/goldman-sachs-just-says-vice-president-to-be-polite

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  6. I’ve sometimes gotten notices in the mail that I am potentially eligible to participate in a class action law suit. There always seems to be language indicating that I must actively opt-out of the suit or else I am included and forfeit future claims. How can this be? It seems kind of fished up to potentially deprive someone of their day in court because they missed a letter in the mail.

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    • Corporate defense tried to change it to an opt-in but the Supreme Court ruled against that.

      You need to do something affirmative to have your own claim for Rule 23(b)(3) class actions.

      The reasons class actions exist for a policy reason is that often the damages are minimal for the individual but in the aggregate they are huge. Imagine there is a bank that managed to illegally take 2 dollars for every checking account it had for 24 months. This only comes out to 48 dollars per an individual but if a bank has 10 million checking accounts, it comes out to 48 million. No lawyer is going to bring a suit for 48 dollars. A law firm will bring a suit for 48 million dollars or more worth of a damages.

      A typical wage and hour claim usually only gets a few hundred to a few thousand dollars. Some extreme cases might go up to 5 figures per an individual. The small cases would still not find lawyers unless there was an aggregate because of filing fees and other costs. So workers would be out of the cash.

      The reason Corporate Defense wants to change it to an opt-in requirement is not to preserve your rights but because they know it will effectively kill a lot of claims against their clients. So you have to be a bit counterintuitive in this situation and realize that an opt-out requirement is really the best for individuals in a class, many of whom might not realize they had a claim or were being bilked. I go to a local coffee shop and a bunch of the baristas used to work for a bigger and more corporate coffee shop. They once told me that they received 500 dollar checks in the mail because of a wage and hour class action and that they did not even realize was going on.

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      • Good points, . I had a sense that that — or something similar — was the case. Still, there is something bothersome about being told that I lost my right to bring suit because I missed the mailing. Perhaps there should be three sub-groups to the class: those who opt-in, those who opt-out, and those who do not respond. And then figure out a way to work with those in the third group. Because you could also run into potential shenanigans there. “Hey… we had 10 million members of the class. 9 million of them never responded so we included them in the settlement numbers. There checks all went uncashed. I guess we’ll just keep the money. And, yes, it is purely a coincidence that they all use a PO Box in Cheyenne.”

        In the grand scheme, the system as you described is probably preferable from a strictly utilitarian standpoint. But imagine you’re the guy who lost that $2 from his bank account, causing him to go into overdraft, leading to a freeze being put on his account, and his mortgage transfer never making it through and then getting evicted and he’s told he has no ability to even pursue a case because, again, he missed a letter in the mail. You should have to actively forfeit your day in court. Full stop.

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      • I don’t doubt you, . As I said, from a utilitarian standpoint, it seems like the better way to set up the system. I just know if I was told that I forfeited my right to my day in court because of a letter I never opened, I’d be pissed as hell. I’ll concede that an opt-in system is not the solution. And I have no better one. There likely isn’t a way to go about it that is both practical and addresses all of the various issues.

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