Beltran v. InterExchange, Inc.

JOHANA PAOLA BELTRAN, LUSAPHO HLATSHANENI, BEAUDETTE DEETLEFS, ALEXANDRA IVETTE GNZALEZ, JULIANE HARNING, NICOLE MAPLEDORAM, LAURA MEJIA JIMENEZ, SARAH CAROLINA AZUELA RASCON, CATHY CARAMELO, LINDA ELIZABETH, GABRIELA PEREZ REYES, and those similarly situated, Plaintiffs, v. INTEREXCHANGE, INC., USAUPAIR, INC., GREATAUPAIR, LLC, EXPERT GROUP INTERNATIONAL INC., d/b/a Expert AuPair, EURAUPAIR INTERCULTURAL CHILD CARE PROGRAMS, CULTURAL HOMESTAY INTERNATIONAL, CULTURAL CARE, INC., d/b/a Cultural Care Au Pair, AUPAIRCARE INC., AU PAIR INTERNATIONAL, INC., APF GLOBAL EXCHANGE, NFP, d/b/a Aupair Foundation, AMERICAN INSTITUTE FOR FOREIGN STUDY, d/b/a Au Pair in America, ASSOCIATES IN CULTURAL EXCHANGE, d/b/a GoAuPair, AMERICAN CULTURAL EXCHANGE, LLC, d/b/a GoAuPair, GOAUPAIR OPERATIONS, LLC, d/b/a GoAuPair, AGENT AU PAIR; A.P.EX. AMERICAN PROFESSIONAL EXCHANGE, LLC, d/b/a ProAuPair, and 20/20 CARE EXCHANGE, INC., d/b/a the International Au Pair Exchange, Defendants.

CIVIL No. 14-cv-03074-CMA

United States District Court, D. Colorado

February 23, 2023

ORDER GRANTING CLASS COUNSEL'S MOTION TO INTERPRET CLASS ACTION SETTLEMENT

CHRISTINE M. ARGUELLO SENIOR UNITED STATES DISTRICT JUDGE

This matter is before the Court on Class Counsel's “Motion for Interpretation of Class Action Settlement.” (Doc. # 1250.) For the following reasons the Court finds that the Beltran Class Action Settlement precludes subsequent claims by class members against Defendants and host families arising out of class members' au pair service prior to July 18, 2019, that relate to the wages, contracts, and host family obligations under the federal regulations. However, the Court finds that the Settlement does not preclude claims of forced labor and trafficking only to the extent they are brought against host families.

I. BACKGROUND

A. THE AU PAIR PROGRAM

The au pair program, operated by the Department of State (“DOS”), provides foreign nationals between the ages of 18 and 26 with a one-year “opportunity to live with an American host family and participate directly in the home life of the host family” principally through the provision of childcare. 22 C.F.R. § 62.31(a), (c)(1), (d). DOS designates certain entities to act as sponsor agencies, the exclusive entities authorized to recruit and place au pairs with host families in the United States. Id. § 62.31(c). In exchange for 45 hours of childcare per week, regulations require host families to provide au pairs with room and board, access to six semester hours of formal education credit, two-weeks paid vacation, and “a weekly [pay] rate . . . paid in conformance with the requirements of the Fair Labor Standards Act [(“FLSA”)] as interpreted and implemented by the United States Department of Labor.” Id. § 62.31(c)(2), (e)(6), (j)(1), (j)(4), (k)(1). The sponsor agencies are responsible for ensuring various conditions of employment, including but not limited to that host families are capable of and do meet various requirements, that au pairs are compensated in compliance with labor laws, and that au pairs do not work beyond specific limitations related to hours and duties. Id. § 62.31(e), (h), (j).

B. THE BELTRAN LITIGATION

In 2014 Plaintiffs, former au pairs, initiated litigation (the “Beltran Litigation”) in this Court on behalf of themselves and all those similarly situated, against the designated sponsor organization Defendants. (Doc. # 1.) One host family, Pamela H. Noonan and Thomas J. Noonan (“the Noonans”), was named in the First Amended Complaint. See generally (Doc. # 101.) However, Plaintiffs and the Noonans stipulated to the voluntary dismissal of the Noonans in April of 2015. (Doc. # 118.)

In their operative Complaint, Plaintiffs alleged that sponsor organization Defendants (“Sponsors” or “Sponsor Defendants”) conspired and agreed to set all au pair weekly wages at the purported minimum of $195.75 per week despite applicable regulations that required au pairs receive not less than minimum wage. (Doc. # 983 at ¶¶ 76-150.) Based on these factual allegations, the Beltran Plaintiffs asserted federal claims under the Sherman Antitrust Act, 15 U.S.C. § 1, et seq., the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. § 1964, et seq., and the FLSA, as well as state law claims based on Breach of Fiduciary Duty, Negligent Misrepresentation, Constructive Fraud or Fraudulent Concealment, Consumer Protection laws, Unpaid Wages, and various state wage and hour laws. (Id. at ¶¶ 589648.)

Although no host families were named as Defendants, the operative Complaint included factual allegations related to Named Class Plaintiff Johana Paola Beltran's experience as an au pair sponsored by Defendant Sponsor InterExchange, Inc. and working for the Noonans. (Id. at ¶¶ 365-96.) The operative Complaint also includes factual allegations related to each of the other Named Class Plaintiffs' experiences as au pairs sponsored by other Sponsor Defendants and working for other host families. (Id. at ¶¶ 354-427.) The Complaint details allegations by each of the Named Class Plaintiffs that Sponsors required them to attend three days to a week of unpaid childcare training and host families paid them the program's floor of $195.75 per week. (Id. at ¶¶ 376-79, 392, 404-07, 409, 412, 422-24, 427-29, 443-45, 450, 458-59, 461, 477-78, 480-81, 484, 491, 494, 504, 508-09, 515, 517, 522, 524, 529-34, 538.) For Ms. Beltran and seven other Named Class Plaintiffs, the Complaint also makes factual allegations regarding abuses by host families including, requiring au pairs to do housework beyond the limitations of the program, requiring au pairs to work more than the 45 hour-limitation imposed, limiting their meals or access to food, isolating them, and verbally attacking and threatening them. (Id. at ¶¶ 386-92, 430, 447, 464-66, 482, 495, 502-03, 525.)

In June 2017 and February 2018, this Court granted the Beltran Plaintiffs collective actions status for purposes of the FLSA, and class action status pursuant to Federal Rule of Civil Procedure 23, respectively. (Docs. ## 569, 828.) The Court established 18 classes and subclasses including the “Antitrust Class,” defined as “[a]ll persons sponsored by any [Sponsor] Defendant to work as a standard au pair in the United States pursuant to a J-1 Visa,” the “RICO Class,” comprised of “[a]ll persons sponsored by [Sponsor] Defendants Au Pair Care in America (American Institute for Foreign Study), AuPairCare, Inc., Cultural Care, Inc. or InterExchange, Inc., to work as a standard au pair in the United States pursuant to a J-1 Visa,” and 16 State/Sponsor subclasses. (Doc. # 828 at 34-37.)

The parties ultimately settled. Sponsor Defendants agreed to pay $65.5 million to be distributed to participating class members with allocations based on federal minimum wage-including overtime pay, and additional amounts if au pairs worked in states with a higher minimum wage. (Doc. # 1189 at 3, 7-9.) “In exchange, the Classes are providing releases to the [Sponsor] Defendants and to host families.... The [Sponsor] Defendants will receive a standard general release.... The host families will receive a narrower release tailored to the claims asserted in the litigation.” (Id. at 7.)

On January 23, 2019, this Court granted preliminary approval of the settlement and approved the notice to class members. (Doc. # 1191.) As part of this Court-approved notice plan, class members were advised that by filing a Claim Form or by doing nothing, they were giving up claims against Sponsors and host families. (Doc. # 1190-2 at 10-11); see also (Doc. # 1234 at ¶ 5.)

On July 18, 2019, this Court entered an Order Granting Final Approval of Class and Collective Action Settlement. (Doc. # 1229) amended by (Doc. # 1234.) Pursuant to the Settlement Approval Order, class members of all 18 classes and subclasses “released and forever discharged” the:

Released Parties . . . from any and all causes of action, judgments, liens, indebtedness, costs, damages, penalties, expenses, obligations, attorneys' fees, losses, claims, liabilities, and demands of whatever kind or character (each a ‘Claim'), known or unknown, arising on or before the Effective Date [July 18, 2019], that are, were or could have been asserted against any of the Released Parties by reason of, arising out of, or in any way related to any of the facts, acts, events, transactions, occurrences, courses of conduct, representations, omissions, circumstances or other matters referenced in the Litigation, whether any such Claim was or could have been asserted by any Releasing Party on her or his own behalf or on behalf of other Persons.

(Doc. 1234 at ¶ 7.) The “Released Parties” were comprised of

Defendants in this action, together with their respective parents, subsidiaries, officers, directors, employees, contractors, shareholders, attorneys, agents, representatives, insurers, host families, and affiliates, expressly, but without limitation, including recruiting affiliates named and unnamed in the course of this Litigation for those Defendants who use the services of others to identify, recruit and/or screen au pair candidates.

(Id.) Excepted from the Release were any

claims or potential claims that any au pair may possess against her or his host family or families if such claims are (i) unrelated to the Claims asserted in the Litigation or (ii) unrelated to host family obligations under the federal Au Pair Program requirements, e.g., compensation, hours, education, or services required.

(Id.) The Court's Order was “binding on all Settlement Class Members, except those individuals who validly and timely excluded themselves from the Class or from the Settlement.” (Id. at ¶ 9.)

Finally this Court retained “continuing and exclusive jurisdiction” over the parties,...