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Plaintiffs’ Motion For Class Certification Granted In Glenn O. Hawbaker, Inc. ERISA Class Action

by | Jun 7, 2023 | ERISA Cases

Newtown, PA – June 7, 2023 – Edelson Lechtzin LLP, co-lead counsel for Plaintiffs, is pleased to announce that Chief Judge Brann of the U.S. District Court for the Middle District of Pennsylvania has granted their motion for class certification. The class is defined as:

All current and former hourly wage employees who worked on prevailing wage contracts at [Hawbaker] within the Commonwealth of Pennsylvania during the period September 1, 2012, through December 31, 2018 (the “Class”).

Factual background

Plaintiffs allege that Hawbaker failed to provide its employees working prevailing wage jobs with the required “fringe benefits” under Hawbaker’s employee benefits plan.

In a prior criminal action, the Attorney General asserted that Hawbaker stole “its prevailing wage workers’ pension and health and welfare money,” using those “fringe benefit funds to lower its costs, thereby helping [it] win more government bids, and increase the company’s profits.” Between 2015 and 2018, the fringe benefit funds Hawbaker allegedly stole from its prevailing wage workers totaled more than $20 million.

In August 2021, Hawbaker pleaded no contest to four counts of Theft by Failure to Make Required Disposition of Funds Received and paid more than $20 million in restitution to 1,262 prevailing wage workers.

Two months later, Plaintiffs Lester Packer Sr., Lester Packer II, and Shawn Dyroff filed the instant action. All three men worked at Hawbaker between 2012 and 2018, with each dedicating at least 95 percent of their work to prevailing wage projects.

What did the court say?

The first prerequisite to class certification is Rule 23(a) numerosity, meaning “the putative class is ‘so numerous that joinder of all members is impracticable.’” Here, the Court said that Plaintiffs identified 1,262 prevailing wage workers as “the Class Members,” which satisfied numerosity.

The second requirement of Rule 23(a) is commonality, which means “that ‘there are questions of law or fact common to the class.’” The Court ruled that Plaintiffs identified several overarching questions of law or fact that are applicable to all Plan participants, including whether Defendants breached fiduciary duties owed to the Plan and its participants by failing to pay properly and timely the correct amount of wages and benefits.

The third Rule 23(a) prerequisite asks whether “the claims of the class representatives [are] typical of the class as a whole.” Here, the Court found that the typicality requirement is satisfied because the alleged injuries to all proposed class members stem from the same misconduct by Defendants.

The final Rule 23(a) prerequisite provides that “class representatives must ‘fairly and adequately protect the interests of the class.’” The Court ruled that Plaintiffs “have the same incentives and motivations to obtain full relief from [the] Defendants as all other Class Members.” The Court likewise found that Plaintiffs “retained experienced class action attorneys who are well qualified to pursue the Class’s claims.”

Finally, the Court ruled that the Class satisfied the requirements of Rule 23(b)(1). That rule authorizes classes in two circumstances: if prosecuting separate actions by or against individual class members would create either “(A) inconsistent or varying adjudications with respect to individual class members that would establish incompatible standards of conduct for the party opposing the class”; or “(B) adjudications with respect to individual class members that, as a practical matter, would be dispositive of the interests of the other members not parties to the individual adjudications or would substantially impair or impede their ability to protect their interests.”