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Singer v. Becton Dickinson and Co.

June 1, 2010

KIRKLAND SINGER, INDIVIDUALLY AND ON BEHALF OF CURRENT AND FORMER CALIFORNIA EMPLOYEES OF BECKTON, DICKINSON AND COMPANY AND MED-SAFE SYSTEMS, INC., PLAINTIFF,
v.
BECTON DICKINSON AND COMPANY; MED-SAFE SYSTEMS, INC., DOING BUSINESS AS BD MEDICAL; AND DOES 1-10, INCLUSIVE, DEFENDANTS.



The opinion of the court was delivered by: Irma E. Gonzalez, Chief Judge United States District Court

ORDER GRANTING: (1) CLASS CERTIFICATION; (2) FINAL APPROVAL OF CLASS SETTLEMENT; (3) REQUEST FOR ATTORNEYS' FEES AND COSTS; and (4) REQUEST FOR AN ENHANCEMENT AWARD. [Doc. Nos. 45, 46]

Currently before the Court are Plaintiff Kirkland Singer's ("Singer") Motion for Final Approval of Settlement and Motion for an Award of Class Representative Enhancement Award and Attorneys' Fees and Costs. For the reasons set forth below, the Court GRANTS both motions.

BACKGROUND

The facts of this case are known to the Court and the parties and need not be repeated herein.

I. Procedural Background

On March 27, 2008, Plaintiff filed a purported class action against Defendants on behalf of himself and other current and former employees in the Superior Court for the County of San Diego.

[Doc. No. 1]. Defendants removed the case to this Court on May 6, 2008. [Id.] On August 11, 2008, following the Court's Order on Defendants' Motion to Strike and Motion to Dismiss, Plaintiff filed a First Amended Complaint ("FAC"). [Doc. No. 16].

In his FAC, Plaintiff alleged wage and hour violations over a class period extending back to March 27, 2004, and sought various forms of relief such as unpaid wages, including statutory wages for meal periods and rest breaks, vacation wages, interest, waiting time penalties, PAGA penalties, restitution, damages, injunctive and other equitable relief, and attorneys' fees and costs under various provisions of the California Labor Code and the applicable wage orders of the Industrial Wage Commission. Primarily, Plaintiff alleged as class claims that: (1) Defendants had an illegal "use-it-or-lose-it" policy, whereby employees forfeited accrued vacation wages ("Vacation Claims"); and (2) Defendants did not pay non-exempt employees all wages due and owing, including meal and rest period premiums, overtime, reporting time, and minimum wages ("Non-Exempt Claims").*fn1

Subsequently, according to Plaintiff, parties engaged in extensive informal and formal discovery, investigation, and pre-trial motion practice concerning the facts and the law. As part of those efforts, Plaintiff was subjected to a two-day deposition, and Plaintiff's counsel conducted a twoday deposition of Defendant Med-Safe's person most knowledgeable (Nathan Miller) about policies and practices at its Oceanside facility relating to reporting time pay, meal and rest periods, vacation/paid-time off, timekeeping, and payroll.

Finally, in April 2009, the parties agreed to engage in settlement discussions, which culminated in a formal, full-day mediation session on May 21, 2009 before a respected neutral mediator, Joel M. Grossman, Esq., who is highly experienced in wage and hour matters such as the claims in this case. Although the May 21, 2009 mediation session resolved much of the dispute, it did not result in a settlement. Mr. Grossman therefore made a mediator's proposal to resolve the parties' impasse, which the parties accepted on June 2, 2009. Subsequently, the parties worked for five months to prepare the present class settlement agreement, and a separate settlement agreement concerning Plaintiff's individual misclassification claim.

II. The Proposed Settlement

Pursuant to the proposed settlement, Defendants agreed to pay up to One Million Dollars ("Gross Fund Value") to compensate the Vacation Settlement Group Members and Non-Exempt Settlement Group Members (collectively, "Settlement Group Members"), including Plaintiff, for their alleged unpaid wages, interest, and penalties, and to provide for the accompanying costs, penalty payments, and fees. Specifically, out of the Gross Fund Value: (1) $3,000.00 has been allocated to be paid to the California Labor Workforce Development Agency ("LWDA") for PAGA penalties pursuant to Labor Code Section 2699; (2) $8,000.00 will be paid to Simpluris, Inc. for the claim administration process; (3) Plaintiff Singer is entitled to recover a service enhancement award of up to $25,000.00 for his service to the Settlement Group Members; (4) the firm of GraceHollis LLP would recover an award of litigation costs up to $11,500.00 and attorneys' fees up to $333,333.00; and (5) Defendants will pay the employer's portion of payroll taxes attributable to the "wage" component of the individual settlement awards.

Thereafter, $548,775.00 will be allocated to the Non-Exempt Settlement Group Members ("Non-Exempt Settlement Fund") and $73,392.00 will be allocated to the Vacation Settlement Group Members ("Vacation Settlement Fund"), for a combined maximum of $622,167.00 to be paid out as Net Fund Value. Out of this, $3,000.00 will be paid to the LWDA for PAGA penalties, leaving $619,167.00 to be paid out to the Settlement Group Members ("Payout Fund"). Under the terms of the proposed settlement, all Settlement Group Members who do not opt-out of the settlement, including Plaintiff Singer, will be eligible to submit a Claim Form for a settlement award.*fn2

The settlement agreement contemplated that there would be approximately 258 persons in the Vacation Settlement Group, and 98 of these would be eligible to claim funds from the Vacation Settlement Fund. To be eligible, each purported class member's employment with Defendants must have ended between March 27, 2004 and December 31, 2006. The Vacation Settlement Awards will be based on 110% of actual vacation wages purportedly owed, calculated by multiplying each Vacation Settlement Member's amount of accrued, unpaid vacation time by that person's final hourly rate of pay. For each Vacation Settlement Award, 50% shall be allocated to "wages," 40% shall be allocated to "penalties," and 10% shall be allocated to "interest." Of the 50% allocated to "wages," payroll deductions will be made for state and federal withholding taxes and any other applicable payroll deductions owed by Defendants as a result of the payment.

The settlement agreement also contemplated that an estimated 251 persons in the Non-Exempt Settlement Group would be eligible to claim funds from the Non-Exempt Settlement Fund. The payment of Non-Exempt Settlement Awards will be calculated by assigning a certain dollar value to each week of work by each employee in a non-exempt position during the class period. For each Non-Exempt Settlement Award, 50% shall be allocated to "wages," 40% shall be allocated to "penalties," and 10% shall be allocated to "interest." Of the 50% allocated to "wages," payroll deductions will be made for state and federal withholding taxes and any other applicable payroll deductions owed by Defendants as a result of the payment.

In exchange for these awards, the settlement agreement provides that both Vacation Settlement Group Members and Non-Exempt Settlement Group Members will release their respective claims against Defendants for the applicable class periods. Plaintiff Singer furthermore will release all claims against Defendants relating to his employment and separation therefrom, not just the non-exempt and vacation claims. Moreover, the settlement agreement contemplates that Plaintiff's Second Amended Complaint ("SAC"), alleging federal/FLSA claims for overtime, will be deemed filed and dismissed as of final approval of the proposed settlement.*fn3

Finally, the proposed settlement provides that it is a "claims made settlement," and therefore any unclaimed share of the Payout Fund shall not become part of the final payout to the class members, but rather will be retained by Defendants. However, if the total payout to the class members is less than 50% of the Payout Fund, the claimed awards of all ...


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