The opinion of the court was delivered by: Oliver W. Wanger United States District Judge
MEMORANDUM DECISION ACTION SETTLEMENT
Plaintiffs Tyrus Collins and James Greer brought this action on behalf of themselves and approximately 219 current and former nonexempt hourly workers employed at Defendant Cargill Meat Solutions' facility in Fresno, California. Plaintiffs allege that Cargill violated state wage-and-hour laws, e.g., it failed to provide employees with paid rest periods of not less that ten minutes for every four consecutive hours worked; and failed to reimburse employees for expenses necessarily incurred in the performance of their job duties for Cargill, namely, the costs of acquiring required safety footwear.*fn1
The parties have entered into a Joint Stipulation of Class Action Settlement Agreement ("Settlement"). Doc. 38-1. Under the terms of the Settlement, the parties seek: (1) preliminary approval of the Settlement; (2) provisional certification of the Settlement Class; (3) appointment of Plaintiffs as Class Representatives; (4) appointment of Rust Consulting, Inc. as Claims Administrator; (5) appointment of Anthony J. Orshansky, Esq., and David H. Yeremian, Esq., of Orshansky & Yeremian, LLP, as Class Counsel; (6) approval of the parties' proposed form and method of notifying Class Members of the Settlement; (7) an order scheduling the hearing date for final approval of the class settlement; and (7) entry of a preliminary approval order.
Plaintiffs filed a Motion for Preliminary Approval of Class Action Settlement on January 21, 2011. The motion is unopposed. For the reasons set forth below, the motion is GRANTED.
The facts of this case are well-known to the parties and the Court. On January 26, 2010, Plaintiffs filed a filed a class action complaint against Defendant Cargill Meat Logistics Solutions, Inc. in the Superior Court of California, County of Los Angeles. The Complaint alleged six causes of action for violations of Labor Code §§ 203, 204, 226, 2802, IWC Wage Orders, and Business and Professions Code §§ 17200, et seq. Defendant subsequently removed the case to the United States District Court for the Central District of California, Case No. 10-CV-01422-PA-SS. The case was transferred to the Eastern District of California on February 25, 2010.
Plaintiffs filed a first amended complaint ("FAC") on August 25, 2010, adding a new cause of action under the California Labor Code Private Attorney General Act of 2004, § 2699. Doc. 23.
Plaintiffs filed the operative second amended complaint (the "SAC") on December 17, 2010.*fn2 Doc. 32. The SAC correctly identifies the Defendant as "Cargill Meat Solutions Corporation" and defines/clarifies the class as "nonexempt hourly employees at any time between August 1, 2008 and the date of preliminary approval by the Court of the settlement." Cf. FAC, Doc. 23, ¶ 1)("Plaintiffs bring this action pursuant to Rule 23 of the Federal Rules of Civil Procedure on behalf of all persons who are or were employed by Defendant as nonexempt hourly employees within the State of California at any time four (4) years prior to the original filing of the lawsuit and continuing to the present.").
On January 21, 2011, the parties filed a Stipulation of Settlement and the instant motion for preliminary approval of the proposed settlement.
From January 2010 through the day of the settlement negotiation, the parties conducted extensive formal and informal discovery concerning Defendant's policy and practices. Plaintiffs' counsel undertook an extensive review of the information amassed during discovery, including: (1) analysis of hundreds of documents produced by Defendant, including time records and payroll data for class members and Defendant's employment records; (2) analysis of Defendant's legal arguments, including Brinker Rest. Corp. v. Superior Court (Hohnbaum), 165 Cal. App. 4th 25, 80 Cal. Rptr. 3d 781 (2008) (review granted); (3) analysis of class-wide violations and damages relating to Defendant's reimbursement policies and practices for work-related expenses; (4) review and analysis of Defendant's policies and practices relating to safety equipment and devices required including document relating to workplace safety compliance; and (5) research of the applicable law with respect to Plaintiffs' claims. Orshansky Decl., Doc. 38, ¶ 11.
III. SUMMARY OF THE SETTLEMENT
The case was resolved with the aid of a mediator, Michael Loeb, Esq., and a third party neutral. The Settlement covers approximately 219 current and former nonexempt hourly workers employed by Defendant in Fresno, California from August 1, 2008 to the date the Court enters an Order of Preliminary Approval. Settlement, ¶ 1. Under the proposed settlement, a non-revertible fund of $150,000 will be established to provide cash payments to qualified class members ("Net Settlement Fund" or "NSF"). This amount is not subject to any pre-distribution reductions as Defendant has agreed to separately pay claims administration costs.*fn3
Under the proposed settlement, a non-revertible fund of $150,000 will be established to provide cash payments to class members who submit timely and valid Claim Forms ("Qualified Claimant"),*fn4 based upon the following allocation formula:
Each the number Qualified Claimant Covered Period, of weeks that shall receive she worked payment which he or a based on through preliminary approval. shall be from August during 1, 2008 the Each provisional Qualified share Claimant of settlement will be entitled to a taking the by (2) dividing that Qualified calculated (1) for that number Claimant's by the number of workweeks, workweeks all Qualified total number multiplying the resulting number by the NSF.
Claimants, and (3) of employee's
For purposes workweeks of this calculation, shall be calculated the number by of an (1) subtracting period and then (3) rounding to the nearest integer. dividing that her number last workday during of days of by the Covered that employee's first workday the Covered Period, Period (2) from his or 7, Doc. 38-1, ¶ 9(c).
A Notice Packet, which includes a Notice of Pendency of Class Action,*fn5 Claim Form, and Request for Exclusion Form, will include for each Class Member the number of weeks actively worked during the Class Period and the Class Member's estimated Settlement Amount. Docs. 38-2 thru 38-4. The Settlement Amount is based on the number of workweeks a Qualified Claimant worked compared with other Qualified Claimants who worked during the same time period. Id. The exact amount a Qualified Claimant receives depends upon how many other Class Members submit timely and valid Claim Forms. Id.
For tax purposes, twenty-five percent (25%) of each Settlement Amount will be deemed wages, fifty-percent (50%) expense as expense reimbursement and twenty-five percent (25%) will be treated as penalties and interest. Id. ¶ 9(e). Defendant will pay its share of payroll taxes on any portion of the settlement where payroll taxes are required by law; however, Qualified Claimants will be responsible for correctly characterizing the compensation they receive for tax purposes.
The formula relies upon objective evidence of the number of weeks worked during the Class Period. Class Members can review and confirm this information, and the Claim Form permits Class Members to challenge the number of weeks worked. Settlement, ¶ 9(d).
Defendant will provide and/or reimburse Class Members for the cost of steel-toe footwear to the extent Defendant requires such footwear to be worn. Settlement, ¶ 9(c).
The Settlement provides that all Class Members other than
those who elect not to participate in the Settlement shall have released the "Released Parties" from the "Released Claims." The Notice contains the following release:
Upon each the Class final Member approval who by does the Court not of the settlement, settlement, shall, for the of time opt extending out of the August 1, period and 2008 approval], from forever discharge to [preliminary fully release present former and agents, directors, its respective and Defendant shareholders, officers, trustees, employees, attorneys, affiliates, parent companies, representatives, divisions, insurers, subsidiaries, assigns, liable and any individual predecessors, or successors, with Defendant entity (the that could be collectively jointly from any and referred to hereafter as the foregoing are "Releasees") damages, debts, wages, benefits, all claims, expenses, causes of penalties, action, costs, liabilities, any demands, obligations, equity, and form attorneys' in of whatever other kind of relief nature, or remedy at law fees, or Covered Claims based on the facts or alleged asserted in the by Second the Amended Complaint ("Complaint") filed in the Lawsuit.
"Covered rights, Claims" means any facts causes and all of in and/or action demands, the liabilities, of claims, alleged the arising out § violation violation violations, Complaint for: (1) of Labor Labor Code 2802(a); (2) (3) rest-period Code § of Labor Code § 204; Code § 226.7; (4) violation of Labor pursuant to Labor Code § 226(a); (5) California Labor Code § 203; et (6) penalties penalties under 2699 seq.; (7) any penalties alleged in the Complaint, and (8) based on the violations & Professions Code § 17200, et violation seq. based of Business foregoing alleged violations on the that could have been brought Claim Form, Doc. 38-3, pg. 2.
Under the Settlement Agreement, Defendant is further entitled to include the following release language on the back of each settlement check:
My Cargill signature Meat Solutions constitutes Corp., a full and and any complete release of entity could settle by liable, a form all claims I that to settlement of claim et al. V. to participate agreed in the be jointly submitting by me for Cargill Meat up Solutions Corp., Case Collins, including No. 1:10-CV-00500-OWW-GSA settlement, the date preliminary to as well of as my acknowledgment Court approval of the and this check as payment in full for all California that I accept Law claims alleged on my behalf in the lawsuit. State Doc. 38-1, ¶ 10.
D. Objections and Opt-Out Process Any Class Member who so wishes may object or elect not to participate in the Settlement. The Notice fully explains the ...