Vail Resorts offers $13M to settle class-action lawsuits
The settlement could spell trouble for a lawsuit filed in Colorado
EAGLE — Vail Resorts has extended a $13.1 million offer to settle five wage and labor lawsuits filed in California, a step that could have implications for a similar lawsuit filed in Colorado and for anyone who has worked on mountains owned by Vail Resorts in recent years.
The California lawsuits are similar in many ways to a proposed class-action lawsuit filed in Colorado District Court in December 2020. Both allege that Vail Resorts violated state and federal labor laws in failing to pay reimbursements for equipment as well as compensation for time staff spent training, in meetings, on meal breaks, getting on the mountain and gearing up before shifts.
However, plaintiffs’ attorneys in the suit filed in Colorado say they would have asked for more than $13.1 million spread across a class of 100,000 people, and they would have asked for policy changes.
Vail Resorts called the settlement offer “appropriate and fair” in an October statement. And in recently filed court documents, attorneys for the California plaintiffs said it was an “excellent monetary result” for eligible employees across the country.
One part-time ski instructor at Vail Mountain, however, said he does not plan to cash his settlement check if and when the time comes that he receives it in the mail.
“Obviously, it’s low — I mean, from my perspective,” said Matt Elston, who is also an inactive member of the California bar association. “It really depends on how they view some of this stuff going forward. Are they going to be paying for what they really should be paying for going forward?”
The deal offers $13.1 million to “settle all claims” against Vail Resorts, but upward of $4.36 million in legal fees would be taken off the top of this amount, according to court documents.
“The (legal fees) are in line with market rates and are appropriate under the percentage-of-recovery method,” Jennifer Liu, lead attorney for the California plaintiffs, said in a request for preliminary approval of the settlement filed earlier this month. All California plaintiffs agreed to this amount of legal fees, according to the document.
Another $500,000 — 3.9% of the settlement fund — will go to complaints made using the Private Attorneys General Act, and 75% of that ($375,000) will be paid to the California Labor & Workforce Development Agency for assisting in facilitating that process.
If the remaining $8.24 million were to be distributed evenly across the 100,000 members of the class, it would shake out to about $82 per person.
Vail Resorts and its attorneys have not responded to requests for comment on the ongoing lawsuits since issuing a statement Oct. 5 that said the company “believes the settlement is appropriate and fair” despite disputing “the accuracy of the claims.”
“A hundred bucks or less for past underpayment really doesn’t cover the damages,” Elston said. “To me, the damages would be more than that, but I think a lot of (ski) instructors would probably feel like, ‘Hey, if we improve things going forward, that’s acceptable.'”
What happens now?
The nature of the settlement offer is such that any and all employees who cash settlement checks they receive in the mail give up their legal rights to bring forward complaints of state or federal labor law violations against Vail Resorts, specifically those that occurred over the past three to four years depending on which state they live in.
Some class-action settlements require class members to “opt in” to receive settlements, but this one requires that class members “opt out” by filling out a form or by choosing not to deposit the check they receive.
“This approach will provide greater total compensation to the class because participation rates are typically much higher,” Liu wrote in the document.
This will also likely mean more people giving up their legal rights to bring their own claims forward or join other lawsuits like the one filed in Colorado.
“You get a check in the mail; what do you do? You cash it, right? You don’t necessarily read the fine print. You’re like, ‘Oh, Vail’s sending me 90 bucks, great,'” Elston said. “Particularly if (the settlement) is covering people beyond California, they should have to opt-in as opposed to opting out.”
Typically, only about 15% to 30% of eligible class members opt in to benefit from settlements reached in Fair Labor Standards Act class-action lawsuits such as this one, according to the preliminary approval document.
Where did the number come from?
To determine a reasonable settlement offer, the California plaintiffs’ attorneys first calculated the “maximum theoretical damages” that eligible Vail Resorts employees could have incurred over the three- to four-year time period covered by the settlement.
The maximum theoretical damages — the most money the company could owe its employees if everyone opted in and all claims were proven in court — was calculated at $108.1 million.
This calculation assumed that “class members in snow positions worked five unpaid hours per week, 25% of which was overtime, missed three meal and rest breaks per week and incurred $700 in unreimbursed but required business expenses per year, and that class members in non-snow positions worked 1.25 unpaid hours per week, 25% of which was overtime, and missed two meal and rest breaks per week,” according to the preliminary approval document.
“The $13.1 million settlement therefore represents approximately 12.1% of the class’ maximum theoretical damages,” according to the document.
Attorneys for Vail Resorts made it clear they intended to challenge many of the claims brought against them if the cases went further into the litigation phase, which is often lengthy and costly for everyone involved. Given this, both parties concluded that the $13.1 million settlement would be “an outstanding result for the class.”
“This is not the opinion of merely a single law firm,” the preliminary approval document states. “This is the collective conclusion of seven different law firms, all of whom independently evaluated whether the settlement was in the best interests of the class.”
A bit of background
Plaintiffs’ attorneys in the proposed class-action lawsuit filed in Colorado have argued that the claims made in their case are stronger and could lead to a larger settlement, according to court filings. If the California settlement is granted final approval, it will hurt their case as any employees who opt-in to the settlement will no longer be eligible to join the Colorado case.
Edward Dietrich and Benjamin Galdston, attorneys for the plaintiffs in the Colorado case, moved to intervene in the California proceedings with an explicit intention to try to have the lawsuits dismissed so their case can move forward instead, but a state court judge issued a tentative ruling denying their request.
“I mean, it’s expensive to do a class-action suit, right? If you shrink the class down to only people who have opted out or opted not to cash a check they got in the mail, then your class is so much smaller and it just may not have the economies of scale worth pursuing it,” said Elston, who has been looking into the lawsuits filed in the two states.
In early November, a federal judge granted a motion filed by Vail Resorts to pause the Colorado case while the California settlement deal moves forward.
Dietrich and Galdston said the motion was part of a plan by Vail Resorts to squash all the lawsuits for the least amount of money possible and without having to change its compensation policies.
Earlier this month, the California plaintiffs’ attorneys filed preliminary approval papers outlining the settlement deal they negotiated with attorneys for Vail Resorts.
Settlement negotiations began over the summer. Since then, five wage- and labor-related lawsuits filed in California were consolidated into one case and moved into California state court. It wasn’t until early January that a settlement amount was made public through the filing of the preliminary approval papers.
If approved, Vail Resorts has argued that settling the California lawsuits should “resolve and release all outstanding claims against Vail Resorts,” including the Colorado case.
The Colorado case “must be allowed to continue in order to end Vail Resorts’ egregious treatment of ski instructors and other hourly employees,” one of the Colorado plaintiffs in the case wrote in a declaration opposing the motion to stay the case.
“They have already changed a few things, which I think is positive,” Elston said in a January interview about Vail Resorts. However, “what they’re trying to do, from my perspective, is they’re trying to make the changes on the books but hoping people don’t really change the practices of the way they’re reporting their hours.”
As an example, Elston said he recently asked his supervisor about whether he can log the hours he spends reading company emails outside of ski lessons. The supervisor informed him that he could log that time on his timecard, but Elston said most of his fellow instructors likely are not aware of this if they haven’t directly asked about it.
Vail Resorts also recently began allowing employees to log the time it takes them to put on and take off their equipment in the employee locker room at the start and end of each shift, which resolves one of the claims made in the lawsuits filed against the company.
However, employees are only able to log the time it takes them to put on their ski or snowboard gear, not the time it takes to don and doff their snow pants and jacket, Elston said. Even this first piece they are not able to record if they skied or snowboarded before or after work, he said.
“So the assumption is if someone doesn’t record it, they must have skied before or after work, but it could be that they just didn’t bother putting it down on the timecard because they didn’t know that we could start putting it down,” Elston said.
“I really do think if you had competition, you probably wouldn’t have had the wages lawsuit because Vail would have had to compete against someone else, and they wouldn’t have done some of these practices that they got comfortable doing because they have no competition and no regulation,” he said.
Who is eligible to receive settlement funds?
If the deal is approved, remaining settlement funds (after the deduction of fees) would be distributed between the plaintiffs who filed the California cases and the rest of the class outlined in the lawsuit.
Named plaintiffs will each receive $10,000 in settlement money, except for plaintiff Anna Gibson, who will be awarded $50,000 due to additional claims she raised against the company, including sexual harassment and gender discrimination.
Eligible class members include hourly U.S. employees who worked primarily at one of the company’s “resort locations or mountain facilities” during the coverage period, according to the preliminary approval papers.
For Vail Resorts employees in Colorado, the coverage period begins Oct. 21, 2014.
Specifically excluded from the class are employees who worked primarily at corporate or non-resort distribution locations.
How will the settlement funds be allocated?
The settlement funds will not be doled out evenly across class members, but rather an “allocation formula” will be used to determine how much each employee should receive based on how long they have worked for Vail Resorts, when and where they worked and the position or positions they worked in.
The formula gives twice as many “points,” and therefore a higher share of the settlement, to current or former employees who worked in “snow positions.” This is defined as “all job titles for which skiing and/or snowboarding was an essential function of the job” and includes “mountain safety, ski school, lift maintenance, lift operations, mountain host, mountain dining, snowmaking and Epic Mix.”
Non-snow positions include employees working in “base area operations, food and beverage, lodging operations, resort operations and transportation.”
Employees who worked in California and Colorado would also be given a higher share of the goods for two reasons. First, “both California and Colorado state law provide greater statutory protections, and higher damages and penalties, than the other (states).”
“Second, Vail’s resort locations and mountain facilities in California and Colorado are generally much larger than in the other class states, … and the named plaintiffs therefore alleged that California and Colorado class members engaged in more uncompensated travel time than in states with smaller resorts and facilities,” according to the document.
This story is from VailDaily.com.
Support Local Journalism
Support Local Journalism
Readers around Lake Tahoe, Truckee, and beyond make the Sierra Sun's work possible. Your financial contribution supports our efforts to deliver quality, locally relevant journalism.
Now more than ever, your support is critical to help us keep our community informed about the evolving coronavirus pandemic and the impact it is having locally. Every contribution, however large or small, will make a difference.
Your donation will help us continue to cover COVID-19 and our other vital local news.