18th Annual Workplace Class Action Report - 2022 Edition

Annual Workplace Class Action Litigation Report: 2022 Edition 293 confidentiality provision and the timing of payment for attorneys’ fees. Finally, the Court determined that the notice lacked any direction for class members with concerns or questions. The Court explained that it should be clearly on how to contact class counsel with these issues. For these reasons, the Court denied the parties’ motion for preliminary settlement approval. Amaraut, et al. v. Spirit/United Management Co., Case No. 19-CV-411 (S.D. Cal. Feb. 16, 2021). Plaintiffs filed a class and collective action alleging that Defendant failed to pay all wages due in violation of state and federal labor laws. The parties ultimately settled the matter and filed a joint motion for preliminary settlement agreement. The Court granted preliminary settlement approval. The Court also granted, for settlement purposes, class certification for Plaintiffs’ proposed Arizona, Colorado, New York, Ohio, and Washington state law classes. The Court also found that the terms of the settlement appeared to be within the range of possible approval. The Court opined that the settlement was fair and reasonable given the probable outcome of further litigation, the significant formal and information discovery that had been conducted, the fact that settlement would avoid substantial costs and delay, and that the settlement was reached after non-collusive and serious contemplation by the parties. The Court therefore determined that the parties entered into the settlement in good faith to resolve a bona fide dispute. In addition, the Court granted conditional certification of a collective action for settlement of Plaintiffs’ FLSA claims and found the settlement was fair and reasonable for resolution of the federal claims for the same reasons. For these reasons, the Court granted the parties’ joint motion for settlement approval. Corado-Cortez, et al. v. XPO Logistics Inc., Case No. 19-CV-670 (C.D. Cal. Nov. 24, 2021). Plaintiffs, a group of hourly, non-exempt employees, filed a class action alleging that Defendant failed to pay overtime compensation in violation of the California Labor Code. The parties ultimately settled the matter and Plaintiff filed a motion for preliminary settlement approval. Plaintiffs alleged that Defendant utilized a rounding time practice that required them to clock-in prior to the start of their shifts in order to be at their workstations when their shifts began, but the time system did not account for the down and minutes were rounded down in Defendant’s favor. Under the terms of proposed settlement, Defendant agreed to pay for 60,900 pay periods in which this occurred, for a gross settlement amount of $1,450,000. The settlement would be disbursed to class members on a pro rata basis. The proposed settlement also accounted for an attorneys’ fee award of no more than 25% of the settlement fund, costs of up to $15,000, and a $5,000 incentive award for the named Plaintiff. The Court granted preliminary settlement approval. The Court reasoned that the settlement was fair and adequate that that it resolved the central dispute in the litigation, i.e. , the improper rounding claims. For these reasons, the Court granted Plaintiffs’ motion for preliminary settlement approval. Ferrell, et al. v. Buckingham Property Management, Case No. 19-CV-332 (E.D. Cal. Aug. 12, 2021). Plaintiff filed a class action alleging various violations of the California Labor Code and also a claim under the California Private Attorney General Act (“PAGA”). The parties ultimately settled the matter and the Magistrate Judge recommended granting final settlement approval. On review, the Court declined to adopt the Magistrate Judge’s recommendations. Under the terms of the settlement, the maximum payment was $600,000, of which at least 63% must be distributed to the class. If the claims for settlement shares were under the 64% threshold, claimants’ shares would be increased pro rata . After notice was provided to class members, only 24.15% of the class settlement amount was claimed. The settlement thus increased the claimants’ settlement amounts for a total settlement fund of $324,556.03, and would revert the remaining 37% to Defendant. The settlement also called for $5,000 in for the PAGA civil penalties claim, with $1,250 going to the claimant and the remaining going to the California Labor and Workforce Development Agency. That entire amount was included within the maximum settlement amount of $600,000. Thus, some of the PAGA penalty money would revert back to Defendant with the remaining 37% of the fund. The Court found that this would be contrary to the PAGA, as a settlement agreement that allocated funds to civil penalties under the PAGA and then permitted the funds to revert back to a Defendant indirectly would exempt that employer for its violation of the law. The Court reasoned that such an agreement was contrary to public policy and thus could not be enforced. The Court opined that the settlement agreement must be amended to treat the PAGA settlement portion separately from the net settlement amount and recalculate the minimum distribution floor of the settlement without those funds. Accordingly, the Court denied the parties’ motion for final settlement approval without prejudice.