Court approves settlement in Goodlife class action
Superior Court of Justice approves $8.5 million settlement in unpaid wages and unpaid overtime class action
Justice Morgan of the Superior Court of Justice has approved a consent certification and $8.5 million settlement in the GoodLife Fitness unpaid wages and unpaid overtime class action.
In October 2016, Goldblatt Partners commenced a proposed class action for unpaid wages (including overtime) against Goodlife Fitness Centres Inc. on behalf of all current and former non-managerial employees who worked in Goodlife’s Ontario clubs since October 2014. The statement of claim alleged, among other things, that Goodlife violated employment standards legislation and its contracts of employment with those employees by requiring or permitting them to work hours above those scheduled, including hours both above and below the overtime threshold, but failing to appropriately compensate them as required by law.
The certified class encompassed the following group of GoodLife employees:
All current and former non-managerial employees of GoodLife employed at its clubs in the Provinces of Ontario, British Columbia, Alberta, Saskatchewan, Manitoba, New Brunswick, Newfoundland, Nova Scotia, and Prince Edward Island, for the period from October 12, 2014 to the date certification is granted (“Class Period”) in this action, save and except for those employed at its Fit4Less or franchise clubs, and save and except for all personal trainers employed by GoodLife in the Cities of Toronto, Ontario; Ajax, Ontario; and Peterborough, Ontario for the period commencing on December 5, 2017 and ongoing. To the extent any employees had both managerial and non-managerial roles during the Class Period, they will be in the class only in respect of their non-managerial roles.
The settlement and Court approval
After exchanging evidence, the parties reached a tentative settlement of the proposed class action. The settlement was approved by Justice Morgan of the Superior Court of Justice on July 3, 2018.
The approved settlement provided for $7.5 million dollars in payments to the class members along with the payment of $1 million in legal fees. The approved settlement was “non-reversionary”. This meant that funds from cheques not cashed within six months of being mailed to the class members’ last known mailing address would be donated to the Canadian Cancer Society, rather than being returned to GoodLife.
GoodLife engaged in significant behaviour modification following the commencement of the class action, which ultimately led to the settlement. As Justice Morgan observed in his decision:
Within a year of issuing the original Statement of Claim, GoodLife made significant changes to its employment and compensation arrangements. Specifically, it began scheduling paid prospecting hours for personal trainers, it removed the clawback of their commission which had previously reduced the trainers’ earnings, it eliminated the previous disentitlement to a bonus for trainers claiming overtime, it began providing lieu time at time-and-a-half instead of straight time for club opening specialists (and retroactively compensated these specialists for the lost time), and it implemented a new record-keeping system as well as one specifically for club opening team members.
In addition, subsequent to the commencement of the present action GoodLife entered into a first collective agreement with Workers United Canada Council, a union that had been certified to represent personal trainers in Toronto, Ajax and Peterborough in 2016. The collective agreement recognized the entitlement of personal trainers to payment for administrative programming tasks and preparation time which were previously unpaid. The collective agreement also called for trainers to receive an additional 2.5 hours per pay period to compensate for these tasks. GoodLife took the opportunity to recognize the entitlement of non-unionized personal trainers to be paid for such work as well.
These various changes to GoodLife’s employment practices reflect a substantial part of the claims put forward in the class action. Much of the action was thereby rendered historic –it now represents a series of claims for past compensation that has been remedied on a go-forward basis. The present settlement embodies a resolution of what was left of the claims.
In approving the settlement, Justice Morgan held that “[t]he terms of the settlement appear to me to be fair and reasonable,” and that “[i]t is worth noting that under the settlement class members are eligible to recover without proof of individual damages; in previous cases this feature has been identified as a significant achievement for the class and one that provides an impetus for the settlement to be approved”. Justice Morgan noted that class counsel were “highly experienced in the field of employment class actions” and that “[g]iven the strength of this experience, the recommendation of class counsel deserves substantial regard in the settlement assessment process…”
Justice Morgan also approved the $10,000 honorarium to the representative plaintiff. In approving the honorarium, Justice Morgan found that “Ms. Eklund appears to have ‘participated in every step of the…litigation including settlement discussions, the mediation and the finalization of the settlement agreement’,” and concluded that “[s]he deserves the honorarium that class counsel seeks on her behalf.”
You can read the Court’s decision here.
Following the Court’s decision, and delivery of the required notices to class members, the settlement funds were dispersed. After six months had passed, the funds from cheques not cashed by class members were donated to the Canadian Cancer Society. The total amount of that donation was $261,939.18.