Brian David Nelson and Shauna Lee Nelson - Page 10




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         at 330 (finding that back wages received in action under ADEA                
         were not on account of personal injury).  The back wages were                
         paid to compensate for overtime work, not to compensate                      
         petitioner for personal injury.  Petitioner’s recovery of                    
         liquidated damages likewise is not on account of personal injury             
         or sickness.  See Jacobs v. Commissioner, supra.                             
              In their memorandum supporting their request for judicial               
         approval of the class settlement, the plaintiffs in the                      
         underlying case state that their method of distributing the                  
         settlement award is not meant to classify the money received but             
         is “merely a mechanical method of apportioning the lump sum                  
         settlement among the class for the personal injuries each has                
         claimed.”  The memorandum, however, clearly indicates that the               
         settlement is based on the claims brought under the FLSA and                 
         provides no information regarding any personal injuries.                     
              Although PayLess undoubtedly negotiated its total liability             
         to the plaintiffs in the lawsuits, petitioners have failed to                
         present any evidence that the allocation of the entire proceeds              
         to personal injuries was the result of adversarial negotiations.             
         Moreover, the method for apportioning the settlement among the               
         class is based on each individual’s level of participation in the            
         lawsuit and on the overtime hours claimed.  This method of                   
         allocation is consistent with an intent to compensate the                    
         plaintiffs for the economic harm they suffered as a result of                






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Last modified: May 25, 2011