Tale of two plaintiffs: Workers suing Vail Resorts in federal court on hold while California settlement gets ironed out
As Vail Resorts faces two different lawsuits for labor malpractice brought by current and former employees, the workers in one case say the settlement of the other shouldn’t prevent their case from being heard.
It’s an outcome that could take years, say those workers, as the settlement reached in a California state court is currently being appealed. In both suits, current and former Vail Resorts employees allege the company failed to pay all hours worked and failed to reimburse them for necessary training and equipment among other violations of the Fair Labor Standards Act.
But while one case is being heard in federal court in the region where Vail Resorts is headquartered, the other case is being settled in California state court. The outcome has been the opposite of what should have happened, say the employees in the federal case, as it’s the federal case in Colorado that’s on hold while the state court case in California is being worked out.
“There is no question that the District of Colorado has by far the strongest interest in the claims, particularly relative to a remote California state court,” the employees argued in the opening brief of their appeal, filed May 31.
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The suit on hold is being heard in the Tenth Circuit Court of Appeals, a federal district based in Denver. The employees in that suit say the other suit, being settled in state court in California, should have been heard in federal court in Colorado, as well, as it involves employees in 16 different states who work for Vail Resorts, which is headquartered in the Tenth’s Circuit’s jurisdiction.
But even if that case proceeds as it has been, the employees in the federal case say it should not deny the action in their case, as they are not a part of the California action. More than 1,600 people have opted out of the California case, making them eligible to join the Colorado case.
“Unlike the District of Colorado, the California state court has virtually no connection to the challenged conduct or familiarity with the claims, facts, and issues in dispute,” the plaintiffs write in their May 31 brief. “Nor would the California state court have jurisdiction absent Vail’s consent.”
The settlement reached in the California suit — $13.1 million for a class of approximately 100,000 — is “pennies on the dollar,” say the appellants of the settlement, who say Vail Resorts did not go through the proper discovery process to determine what a proper settlement would be.
In November 2021, those appellants asked the federal court to intervene in the state court settlement, calling it “improperly calculated to extinguish the Colorado Action’s broader and stronger claims and avoid the District Court’s general jurisdiction.”
The federal court disagreed, finding in June of 2022 that there is “no precedent for the proposition that this federal court is empowered to undertake a review of a settlement agreement reached in a different court, before a different judge.”
In appealing that decision, the employees say indeed, the federal court “is empowered to enjoin conflicting or abusive litigation in another court, particularly in later-filed actions involving overlapping parties and issues,” and “whether a party has circumvented rules or committed improprieties is relevant when considering an injunction.”
There are several improprieties to consider, the employees in the federal case argue. In addition to the impropriety of allowing the case to play out in California state court rather than federal court in Colorado, employees say the settlement and circumstances surrounding it constitute a “reverse auction” settlement, “where a defendant in a series of class actions picks the most ineffectual lawyers to negotiate a settlement in the hope that the district court will approve a weak settlement that will preclude other claims against the defendant.”
Vail Resorts has until July 1 to respond to the opening brief.
