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Brooke Gardner, Individually, and On v. Gc Services

November 1, 2011

BROOKE GARDNER, INDIVIDUALLY, AND ON
BEHALF OF A CLASS OF OTHERS SIMILARLY SITUATED, PLAINTIFF,
v.
GC SERVICES, LP, DEFENDANT.



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

(1) PRELIMINARILY CERTIFYING CLASSES FOR SETTLEMENT PURPOSES;

(2) APPOINTING CLASS REPRESENTATIVE;

(3) PRELIMINARILY APPROVING SETTLEMENT;

(4) APPOINTING CLASS COUNSEL;

(5) APPROVING CLASS NOTICE;

(6) SETTING A FINAL APPROVAL HEARING FOR MARCH 26, 2012 [Doc. No. 54]

ORDER:

Presently before the Court is Plaintiff Brooke Gardner ("Plaintiff")'s unopposed motion for preliminary approval of a class settlement. [Doc. No. 54.] For the reasons set forth below, the Court GRANTS Plaintiff's Motion.

BACKGROUND

I. Facts

This is a wage and hour class action case. Defendant GC Services, LP ("GC Services") provides telephone-based customer services and collections services to various companies throughout the United States. [Doc. No. 15, Answer ¶ 1.] GC Services operates three call centers in California, including one in San Diego. [Id.] GC Services' telephone workers are generally referred to as account representatives, although their job titles vary. [Doc. No. 26-3, Deposition of Sharon Webb ("Webb Depo.") Exs. 5-9.] GC Services pays its account representatives by the hour and classifies them as "non-exempt" employees who are entitled to overtime compensation. [Id.; Doc. No. 1, Compl. ¶ 8.] The account representatives are typically scheduled to work at least 40 hours per week. [Doc. No. 26-2, Declaration of Brooke Gardner ("Gardner Decl.") ¶ 2.]

Named Plaintiff Brooke Gardner previously worked as an account representative at GC Services' call center in San Diego. [Id.] Plaintiff alleges that account representatives were required to perform certain "pre-shift" work on a daily basis (logging into the computer system, various software programs, and the telephone system); that the account representatives were uncompensated for the "pre-shift" work; and that if they failed to complete it, they were subject to discipline. [Compl. ¶¶ 10-11, 15-16.] Plaintiff also alleges that account representatives were required to work off the clock during meal periods and during "post-shift" periods. [Id. ¶¶ 13-16.]

II. Procedural History

On March 24, 2010, Plaintiff filed a putative class action against GC Services in state superior court alleging causes of action for (1) failure to pay straight-time wages in violation of California Labor Code § 218; (2) failure to pay overtime wages in violation of 8 C.C.R. § 11040 and California Labor Code §§ 510 and 1198; (3) failure to pay compensation due at termination in violation of California Labor Code §§ 201-03; (4) violation of California Business and Professions Code §§ 17200, et seq.; and (5) quantum meruit. [Doc. No. 1, Compl.] On May 10, 2010, GC Services removed the action to this Court pursuant to the Class Action Fairness Act of 2005, 28 U.S.C. § 1332(d)(2). [Doc. No. 1, Notice of Removal.]

Because of a related action in the Eastern District of Missouri, GC Services filed a motion to dismiss, transfer, or stay the case pending resolution of the related action. [Doc. No. 2.] Shortly thereafter, Plaintiff filed a motion to remand the action back to state court. [Doc. No. 4.] On July 6, 2010, the Court denied GC Services' motion to dismiss and also denied Plaintiff's motion to remand to state court. Thereafter, GC Services filed an answer. [Doc. No. 15.] On December 3, 2010, Plaintiff filed a motion for class certification. [Doc. No. 26.] GC Services opposed the motion. [Doc. No. 32.]

After significant discovery, on February 1, 2011 and February 2, 2011, the parties engaged in a mediation session with experienced mediator Joan S. Morrow. [Doc. No. 54-2, Declaration of Jason M. Lindner ("Lindner Decl.") ¶ 2.] Although the parties did not reach an agreement at the mediation, the parties continued to have settlement discussions and conducted data analysis that eventually resulted in an agreement to settle the action on May 19, 2011. [Id. ¶ 3.] The Court dismissed Plaintiff's motion for class certification without prejudice after the parties notified the Court that the case had settled. [Doc. Nos. 49, 51.] The parties drafted a Joint Stipulation of Settlement, [Doc. No. 54-2, Linder Decl. Ex. A ("Class Settlement")], and now submit that agreement to this Court for preliminary approval. [Doc. No. 54.]

III. The Settlement

Pursuant to the proposed settlement, CG Services has agreed to pay $975,000 as the total settlement fund, without admitting liability, and to deposit the funds with a settlement administrator following final approval. [Class Settlement §§ 2.22, 6.2.1, 7.4.1.] The settlement fund equals the entire amount to be paid to the class, including attorneys' fees (not to exceed $292,000--30% of the total settlement fund), expert fees, costs (not to exceed $20,000), and an incentive award to the named Plaintiff Brooke Gardner (not to exceed $3,000), but excluding employment taxes. [Id. § 2.22, 6.3, 6.4.]

The class consists of all current and former "non-exempt" (i.e., overtime eligible) telephone-dedicated call center representatives who work or worked for GC Services at locations in California at any time between March 24, 2006 and June 15, 2011. [Id. § 2.5.] The parties estimate that the size of the putative class is approximately 1,524 individuals. [Id.]

Class members who want to opt-out have the obligation to notify the settlement administrator within 45 days after the initial mailing of the class notice. [Class Settlement § 7.2.7.] Every class member that does not opt-out from this settlement and submits a claim form within sixty days will receive a cash payment from the settlement fund. [Id. § 7.4.2.] The amount of payment received will be calculated by determining the pro rata share of the funds based on each class member's amount of weeks worked within the relevant time period, but the amount for each class member will be no less than $50. [Id. § 6.7.2.] In addition, the settlement agreement provides that if the amount claimed does not equal at least 50% of the settlement pool, the payments to qualified class members will be reapportioned so that at least 50% of the settlement pool is paid to the class members. [Id. § 6.7.2(d).] Unclaimed funds above the 50% minimum will revert back to GC Services. [Id.]

In exchange, GC Services will receive a release from the class members of all wage and hour claims asserted in this action along with any wage and hour claims that could have been asserted. [Id. §§ 2.28, 6.8.1-6.8.4.] This release extends only to class members who do not optout of the class. [Id. §§ 2.32, 6.8.1-6.8.4.]

DISCUSSION

When the parties reach a settlement agreement prior to class certification, the court is under an obligation to "peruse the proposed compromise to ratify both the propriety of the certification and the fairness of the settlement." Staton v. Boeing Co., 327 F.3d 938, 952 (9th Cir. 2003). Thus, the court must first assess whether a class exists, and second, determine whether the proposed settlement is "'fundamentally fair, adequate, and reasonable.'" Id. (citations omitted). Accordingly, in the present case, the Court will first examine the propriety of ...


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