- 9 -
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
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 Next
Last modified: May 25, 2011