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Can Class Representatives Get Compensated For Serving As Class Reps?

If a class action lawsuit is successful in obtaining relief for the members of the class, in addition to getting whatever the class members get, the class representative (i.e., the named plaintiff or the class rep) can petition the court for what is called an “incentive award,”  to compensate the named class plaintiff for the additional time, effort and risk associated with bearing the fiduciary duties of a class representative.

Judges and courts are typically given broad discretion in deciding whether to allow incentive awards (i.e., they can refuse to give an award) and, if they do award them, in setting the amounts of the incentive awards, which can range from hundreds of dollars to over $50,000.

In deciding how much, if anything, to award to the class representatives, courts will often look at factors such as the amount of involvement that the class representative had in the class action case, the actions the class plaintiff has taken to protect the interests of the class, the degree to which the class benefitted from those actions (including the size of the recovery for the class, if any),  the amount of time and effort the plaintiff expended in pursuing the class litigation and
the risk to the class representative in commencing suit, both financial and otherwise.

Class actions can be a powerful tool for consumers’ rights in society.   Class action incentive awards are one way that courts can encourage or induce individuals to participate in class action lawsuits.

{ 2 comments… add one }
  • Toby Harris May 22, 2010, 12:57 pm

    GoDaddy.com axes Whistleblower, Employees Go Class Action
    Arizona’s six time “Best places to work” award winning employer, may be stealing earnings from employees.
    Scottsdale, AZ, May 21, 2010 (Press Release): In a legal Complaint filed yesterday in Maricopa County Civil Court in downtown Phoenix, Az. (Captioned Corbin et al. V. Godaddy.com Inc. Case Number CV2010-016149) alleging, The world’s leading internet domain registrar and hosting company, with $750 million dollars in annual revenue and a single owner, privately held , Godaddy.com may be trying to discount a portion of it’s massive 24-hour 7-day a week 2400 employee labor force, by non compliance with federal FLSA wage and hour standards, involving sales bonuses and overtime pay. The complaint seeks class action status for illegal bonus deductions, failure to properly pay overtime under the FLSA, and wrongful termination of a whistleblower. Judge Hugh Hegyi is assigned to the case. The employees have retained private council Phoenix based powerhouse law firm Lorona Steiner Ducar, Ltd.,

    In a February 2010 meeting, former employees Toby Harris and Casey Corbin, attempted to point out to company executives that the compensation plan for the Technical Inbound Sales and Support employees may be illegal. “They have a bonus sales plan, which is definitely production based and anticipated, which in no way qualifies for a discretionary bonus exemption under the FLSA Overtime laws. So it’s looks like they are using this unrelated QA system to steal bonus commissions and call it discretionary to prevent proper overtime payments. Casey and I attempted to show this to the company, and the next thing you know we are unemployed. Not only that, it is unfair to other domain registrar’s and hosting companies that comply with labor laws, they don’t operate with illegal discounted labor schemes.” Said Harris. “In an era of seemingly endless corporate corruption. It is a sad truth that we should have to go to the extremes of an attorney to collect fair pay.” Said Corbin. Former Godaddy employee and retired military Air Force, Alan Reeser also joins the complaint as a named plaintiff. Godaddy.com executives deny any wrongdoing.

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  • jacqueline rosenberg May 10, 2011, 5:24 pm

    I have complained for them paying incorrectly. My emplotee nembrer is 300112476. sep 2007 through nov 2010.

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