18 plaintiffs will receive a $325,000 settlement from Citigroup Inc. after months of litigation alleging the employer inappropriately classified a number of its information technology workers as contractors in order to avoid paying overtime wages.
18 plaintiffs will receive a $325,000 settlement from Citigroup Inc. after months of litigation alleging the employer inappropriately classified a number of its information technology workers as contractors in order to avoid paying overtime wages. Citigroup is a U.S. based multinational investment banking corporation headquartered in Manhattan, New York. It was formed when Citicorp merged with Travelers Group in October 1998, marking one of the largest mergers in U.S. history.
In April 2015, a group of IT workers banned together to file a dispute against the banking company with the intent to get it eventually approved as a nationwide class action lawsuit. The case was taken up in the U.S. District Court for the Southern District of New York and was thereafter referred to as Korenblum et al. v. Citigroup Inc., case number 1:15-cv-03383. The lawsuit was filed specifically on behalf of members hired by Citigroup but sourced by third party staffing agencies.
Court records indicate the IT workers were hired directly by a staffing agency for the purpose of aiding in Citigroup’s internal operations. However, the IT workers insisted that Citigroup acted as a joint employer with the staffing agency during their tenure because the company controlled their daily duties, which are out of the direct control of the placement company. Therefore, the plaintiffs claimed Citigroup was responsible for assuring they were paid their wages for all hours worked, including any weekly hours clocked above 40, which they contended were often required in order to complete their tasks.
The disgruntled employees alleged Citigroup, as their employer, unlawfully exempted them in the books as contractors in order to avoid paying overtime wages, violating the Fair Labor Standards Act, which establishes overtime pay standards for employees nationwide as well as minimum wage requirements and youth employment standards. The workers’ attempts to file a class action lawsuit would track misappropriated clocked hours at Citigroup dating back approximately three years, and would ultimately help bring to light unethical measures taken by any company practicing the same bookkeeping.
Much to their dismay, the class action attempt was denied in July 2015. However, the case entered into mediation, and given the wide spread attention the plaintiffs’ claims received, talks of coming to a settlement agreement ensued.
The final negotiated number, which was approved on January 5th, represented 40 percent of what the plaintiffs were seeking in their class action pursuit, and was deemed fair once they took into consideration the additional costs and time associated with furthering litigation. The settlement included pay outs ranging from nearly $2,900 to $17,000 for each participant, depending on the number of hours an individual had worked with less than fair or no pay.
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