A federal judge in Pennsylvania approved a $667,000 settlement agreement against Independence Blue Cross over claims it failed to properly compensate its customer service representatives for computer work conducted prior to clocking in.

In a Tuesday ruling, U.S. District Judge Kai N. Scott of the Eastern District of Pennsylvania approved a $667,000 settlement agreement and $222,333.33 in attorney fees against Independence Blue Cross over allegations that it violated the Fair Labor Standards Act of 1938 (FLSA), 29 U.S.C. Section 201; the Pennsylvania Minimum Wage Act of 1968 (PMWA), 43 P.S. Section 260.1; and Pennsylvania common law. The plaintiffs, Jodda Moore and Terrell Aiken, claimed their employer failed to pay them and other class members all wages earned.

In Moore v. Independence Blue Cross, the plaintiffs, who worked as customer service representatives (CSRs) in the member health team department, claimed that Independence Blue Cross regularly required CSRs to perform work prior to the start of their shift and without compensation. This allegedly included rebooting and loading their computers, logging in, and opening and loading software applications and web browsers. The plaintiffs claimed the failure to pay overtime constituted overtime wage violations, overtime gap time violations, and unjust enrichment.

The court approved the agreement on behalf of a class of 1,356 individuals, concluding it was fair, reasonable, and adequate under Federal Rules of Civil Procedure 23(e)(2) and the factors established in the U.S. Court of Appeals for the Third Circuit's 1975 ruling in Girsh v. Jepson.

"The class representatives and class counsel have adequately represented the class. The settlement agreement was negotiated at arm's length and with the assistance of the Honorable Thomas J. Rueter. The relief provided to the class is adequate, considering all factors in Fed. R. Civ. P. 23(e)(2)(c). The settlement agreement treats class members equitably relative to each other under Fed. R. Civ. P. 23(e)(2)(d)," Scott said.

The net settlement amount totaled $375,601.26, which, according to the court, includes the subtraction of $222,333.33 in attorney fees, $7,065.41 in attorney expenses, $32,000 in administration expenses, $10,000 in service rewards to class representatives, and $20,000 that will be distributed by the administrator to class members entitled to a distribution of the proceeds. The court approved the request that 33% of the settlement amount by awarded to the plaintiffs' attorneys, after applying the percentage-of-recovery and lodestar methods.

"Using the lodestar method as a cross-check on the reasonableness of the requested fees, class counsel's lodestar is $138,972.50 for 263.4 hours worked, which excludes anticipated time spent preparing for, traveling to, and attending the November 12, 2024 hearing. Class counsel's requested award for attorneys' fees of $222,333.33 results in a multiplier of 1.60. Given the nature of the services provided, class counsel's experience in class action cases and the rates of other lawyers in the community with similar skills and experience, class counsel's hourly rate is reasonable," Scott said. "The number of hours expended by class counsel was not excessive or redundant. Class counsel has applied for a $5,000.00 service award for each class representative, $10,000.00 in total."

The plaintiffs were represented by Alex A. Pisarevsky, of Cohn Lifland Pearlman Herrmann & Knopf, in Saddle Brook, New Jersey.

According to the plaintiffs' initial complaint, they claimed they spent approximately 15 to 30 minutes per day, prior to the beginning of each shift, rebooting and loading their computers, logging in to their computers, and opening and loading various software applications and web browsers, without being compensated.

"Excluding the time spent performing uncompensated computer prep work, CSRs, including plaintiffs, regularly work or worked at least thirty-seven and one-half (37.5) hours per workweek. However, during the member health team department’s 'busy season,' which begins every October 1, and ends the following April 1, defendant mandates that all CSRs work an additional two (2) to (6) hours, or more, per workweek. Therefore, including time spent performing computer prep work, CSRs, including plaintiffs, regularly work more than forty (40) hours per week during the busy season, and also sometimes work more than forty (40) hours per week during other times of the year," the complaint said, maintaining the plaintiffs and other class members were entitled to be paid overtime compensation for all hours worked in excess of 40 hours per work week.

Independence Blue Cross's was represented by Joe H. Tucker, Jr., of Tucker Law Group, in Philadelphia.

The parties' counsel did not immediately respond to requests for comment.