Enterprise Holdings Inc. and an Orlando-based subsidiary will pay $175,000 to 964 employees laid off in the wake of the Covid-19 outbreak, allegedly with less than the 60-day notice generally required by federal law, Florida federal court records show.
The unopposed motion for preliminary court approval of a proposed class action settlement filed by lead plaintiff Elva Benson Monday comes after the parties notified the U.S. District Court for the Middle District of Florida Sept. 15 that an agreement had been reached through mediation to resolve the Worker Adjustment and Retraining Notification Act suit.
The WARN Act is a 1988 law that requires most employers with 100 or more workers to provide 60-day advance notice of mass layoffs and plant closings.
The settlement was reached while the case was partly on appeal before the U.S. Court of Appeals for the Eleventh Circuit.
The appeals court was considering Enterprise’s and Enterprise Leasing Company of Orlando LLC’s challenge to the district court’s rejection of their “natural disaster” defense to the suit. The district court improperly read into the WARN Act a requirement that the defense is only triggered when layoffs are “directly” caused by a natural disaster, like a tornado, they said. The defense instead applies to any form of natural disaster, the companies said.
The appeal was widely considered a “test case” on the applicability of the natural-disaster defense to Covid-related layoffs.
The settlement, if approved, will establish a $175,000 class fund to be shared on a pro rata basis by all of the 964 class members who timely file a notice of claim.
The fund will first be used to pay an estimated $16,500 in class administration fees and $7,185 in litigation costs. Any money left after those payments are made and the class members receive their shares will be distributed to a cy pres recipient, according to the motion.
Class counsel will separately apply for up to $250,000 in attorneys’ fees, which won’t be paid out of the class fund, the motion said.
The proposed settlement is fair given the possible range of recovery in similar cases and the uncertainties and risks of litigation, the motion said.
Benson was one of almost 20,000 active Enterprise employees laid off nationwide in early 2020 when the Covid-19 pandemic first struck the U.S.
Enterprise Holdings and Enterprise Leasing Company of Orlando “have, at all times, denied” the allegations of Benson’s May 2020 suit or that they violated the WARN Act, the motion said.
Wenzel Fenton Cabassa PA represents Benson and the class. Gibson, Dunn & Crutcher LLP represents the companies.
The case is Benson v. Enter. Leasing Co. of Fla., LLC, M.D. Fla., No. 6:20-cv-00891, motion for preliminary approval of class settlement 11/29/21.