LOS ANGELES: A federal judge in California's central district has preliminarily approved the settlement terms of a class action lawsuit against Interpublic Group accusing the holding company of making employees work after hours without compensation.
The holding company has agreed to pay $327,000 to compensate employees who said they were made to work at events after hours and without overtime pay or state-mandated breaks. The settlement will benefit employees at Rogers & Cowan, PMK-BMC, the Axis Agency, GolinHarris, and Weber Shandwick.
Federal Judge George Wu made the preliminary approval decision on February 12.
There are 239 class members, all of whom are from California, ranging from account coordinators to administrative assistants, according to court documents. They worked in the roles starting June 30, 2007.
It is unclear how many of those will actually file a claim to collect by the April 11 deadline. Final approval of the settlement is expected by May 23.
The original plaintiff of the suit, Daniel Malakhov, is a former Rogers & Cowan account coordinator. He filed the class action suit in 2011, claiming that he and other employees were required to “volunteer” to work after their regular shifts were over at clients' events. Failure to comply with these requests “would negatively affect their ability to advance their careers,” he said.
Malakhov will be paid $20,000. In court documents, he indicated that he left the PR industry because the publicity from the lawsuit made it impossible to continue in the field. He now works in apparel branding.
“It is my belief that $20,000 is relatively small comfort for having to retool one's entire career path and to be blackballed in the very field for which he studied and sacrificed for years,” his attorney Paul Cullen of The Cullen Law Firm, said in court documents.
Although Malakhov did not personally witness similar behavior at other Interpublic firms, employees from other agencies were deemed eligible for financial compensation after the Cullen firm conducted a study with potential class members.
The research “confirmed that the same pressures [that] existed at Rogers & Cowan to work without compensation at after-hours events existed elsewhere in [Interpublic's] agencies,” the lawsuit claimed.
Interpublic is not admitting any wrongdoing as a condition of the suit; rather both parties believed that the continued costs of litigation were a deterrent, according to court documents.
“We are pleased to have reached a settlement agreement, and cannot comment additionally, pursuant to the terms of the agreement,” said Tom Cunningham, VP of corporate communications at IPG.
The agreement precludes both parties from making any comment that could result in press attention. A Cullen representative declined to comment because of the conditions of the settlement.