Bruister ESOP Verdict - 6.49 Million Dollar Judgement

A federal judge has found a Mississippi business owner liable for $6.49 million to his former employees, including many living in Tennessee, for overcharging for company stock. 

Bruister & Associates, Inc. was a subcontractor for DirecTV that performed installation services.  Its owner, Herbert Bruister, set up an Employee Stock Ownership Plan (ESOP) to sell all of the stock in the company to its employees, and named himself and two close associates as plan trustees.  Two former employees at the company’s Nashville office, Joel Rader and Vince Sealey, brought suit on behalf of the ESOP claiming that the trustees manipulated the sale process and failed to protect the plan from financial abuse as required by the Employee Retirement Income Security Act (ERISA). 

After a 19 day trial, United States District Judge Daniel Jordan found that the trustees had breached their fiduciary duties and improperly influenced the valuation of the company, which caused employees to pay far more for stock than what it was worth.  The court also found that defendants had engaged in “egregious misconduct” and entered an injunction preventing the trustees from acting on behalf of ERISA-covered plans in the future.    

 “I heard rumblings that the ESOP was bogus and that employees would not be getting their promised retirement benefits,” said Rader.  “I felt like the company was cheating the employees and something needed to be done.”

Sealey added, “The company kept ignoring me when I tried to sell my stock, so I thought this must be some kind of scam. I am happy with the decision but really feel like people should be going to jail.” 

Chuck Yezbak, Rader and Sealey’s attorney, said, “They represented the interest of all plan participants even when they didn’t have much to gain personally.  This case is a good example of workers standing up for their rights and holding people accountable.” The court also noted that “throughout this litigation, including trial, [Rader and Sealey] advanced the ESOP’s general interests over their own” and that they represented the plan well.

Rader and Sealey were represented by Nashville based Yezbak Law Offices, Gary Greenwald of Keller Rohrback, P.L.C., and Mississippi attorney Louis H. Watson.  The U.S. Department of Labor filed a separate lawsuit. The cases were combined for trial.

Many of the company’s technicians filed a separate lawsuit, which is pending in federal court in Nashville against both Bruister & Associates, Inc. and DirecTV, alleging they were required to work off the clock without pay.  Approximately 1800 employees joined this lawsuit and are also represented by Yezbak Law Offices. 

Jury Awards $2 Million Verdict to Meat Processing Facility Employees

     Yesterday (9/26/2011), a jury awarded workers from multiple Tyson Foods, Inc. (“Tyson”) meat processing facilities a $2,892,378.70 verdict for uncompensated work performed before and after their shifts.  The Plaintiffs consisted of production and support employees from the Denison, IA and Storm Lake, IA facilities.  The trial took place in the U.S. District Court for the Northern District of Iowa.

     Plaintiffs claimed that the donning and doffing of hard hats, work boots, hair nets, frocks, aprons, gloves, whites, and ear plugs before or after work constituted compensable “work” as defined by the Fair Labor Standards Act (“FLSA”).  Tyson argued that these were merely “preliminary” and “postliminary” activities, for which it did not have to compensate employees. 

     The jury agreed with the Plaintiffs, and found that the preliminary and postliminary activities were compensable work under the FLSA, and, therefore, Tyson had failed to properly compensate these employees for that work.