United States District Court, N.D. California
ORDER DENYING MOTION FOR PRELIMINARY APPROVAL OF A CLASS ACTION SETTLEMENT AND VACATING HEARING
RE: ECF NO. 150
JON S. TIGAR, District Judge
In this action for claims arising out of purported violations of California labor laws, Plaintiff Willner moves for an order (1) preliminarily approving the parties' settlement agreement; (2) conditionally certifying the proposed class for settlement purposes; (3) appointing Willner as class representative and her counsel as class counsel; (4) approving and directing the mailing of the proposed notice in accordance with the proposed notice plan; and (5) scheduling a fairness hearing for final approval of the settlement agreement. Manpower filed a statement of non-opposition. For the reasons set forth below, the motion is DENIED WITHOUT PREJUDICE, and the hearing scheduled for September 4, 2014, is VACATED. See Civil L.R. 7-1(b).
A. The Parties and Claims
Plaintiff Vera Willner is an hourly employee of Manpower, which operates a "temporary employment agency." Fifth Am. Compl. ("FAC") ¶ 2. She received her wages from Manpower by U.S. mail and was paid on a weekly basis when work was assigned to her. Id . Willner brings this putative class action against Manpower "for California Labor Code violations stemming from [Manpower's] failure to furnish accurate wage statements and failure to timely pay all wages to employees who received their wages by U.S. mail." Id . ¶ 1.
Willner asserts the following five claims in the operative complaint: (1) violations of California Labor Code section 201.3(b)(1) for failure to pay timely weekly wages; (2) violations of California Labor Code section 226 for failure to furnish accurate wage statements; (3) violations of California's Unfair Competition Law ("UCL") for failure to provide accurate wage statements and to pay timely wages; (4) penalties under the Private Attorney General Act ("PAGA") for failure to provide accurate wage statements and to pay timely wages; and (5) violations of California Labor Code sections 201 and 203 for failure to pay timely wages due at separation.
B. Procedural History
In its order of March 31, 2014, the court denied Manpower's motion for summary judgment on Willner's section 226 and UCL claims on the ground that a genuine issue of material fact exists with respect to whether Manpower's violations of section 226(a) were knowing and intentional. ECF No. 117 at 18-19. In the same order, the court granted Willner's motion for summary judgment as to her PAGA claim, which is based on Manpower's violations of section 226(a), and it granted Manpower's motion for summary judgment on Willner's claim under section 201.3(b)(1).
On June 30, 2014, the court denied Manpower's motion to dismiss Willner's section 226 claim pertaining to employees who did not receive their wage statements by mail. In so doing, the court rejected Manpower's argument that these putative class claims are time-barred. See ECF No. 141.
C. Settlement Agreement
Following the court's March 31 order, the parties engaged in settlement discussions and participated in a full-day mediation on July 2, 2014, before Jeffrey A. Ross, an experienced mediator with expertise in wage and hour law. Ho Decl. ¶ 22. After a full day of arm's-length negotiation, the parties agreed to the core terms of the proposed settlement that is the subject of the instant motion. After several weeks of further settlement negotiations, the parties finalized the settlement, which was fully-executed on July 31, 2014. Id.
As part of the settlement agreement, Manpower has agreed to pay $8, 750, 000 ("Maximum Settlement Amount") into a Qualified Settlement Fund within ten calendar days of the date on which the settlement is finally approved. Ho Decl., Ex. A ¶ 23. The following amounts will be subtracted from the Maximum Settlement Amount: (1) class counsel's attorney's fees, which will not exceed 33.33% of the Maximum Settlement Amount or $2, 916, 666.67; (2) costs and expenses of no more than $50, 000; (3) a "service" or incentive payment to Willner of $11, 000.00; (4) payments made under PAGA totaling $87, 500, 75% of which will be paid to the California Labor and Workforce Development Agency and 25% of which will be paid to class members; (5) $25, 000 for a "Settlement Class Hold-Back Fund, " which will cover any required payments to class members who were mistakenly omitted from the class list or whose eligible paystub count is disputed; and (6) the costs of settlement administration, which are estimated to total $104, 326.74.
After subtracting these amounts, any remaining funds (the "Settlement Class Settlement Proceeds"), which Willner estimates will total $5, 577, 381.59, will be distributed to the class, which Willner defines as follows:
All persons who were or are employed by Manpower Inc. in California as temporary employees at any time from March 17, 2010 through January 20, 2012 and who received their wage statements (i.e. paystub) by U.S. mail, payment card or electronic submission, except individuals who were or are at the same time jointly employed by a franchisee of Manpower Inc., including but not limited to, franchisee CLMP LTD., dba Manpower of Temecula.
Id. ¶ 21.
Class members who submit timely claims will receive payments on a pro rata basis based on the total number of paystubs that Manpower issued to them during the class period. To calculate the amount that will be paid to each class member, the Settlement Class Settlement Proceeds will be divided by the total number of paystubs issued by Manpower during the class period to Settlement Class Members who submit timely and valid Claim Forms ("Claimants") to produce a pro-rata dollar amount. Id . ¶ 26. Individual settlement awards will be determined by multiplying this dollar amount by the number of paystubs received by each Claimant. Id . Counsel for Willner estimate that Claimants will receive at least $17.71 per paystub issued during the Class Period. Ho Decl. ¶ 27. The average total payment will be approximately $275, and the maximum total payment will be $2, 700. This recovery represents 30% to 35% of Willner's likely recovery at trial if she were to prevail, which could range from $25-30 million. Id . ¶ 23. No remaining funds will revert to Manpower.
Within ten calendar days of preliminary approval, Manpower will provide the Settlement Administrator a list containing each Settlement Class Member's name, last known address, phone number, social security number, and number of eligible paystubs received during the class period. Ho Decl., Ex. A ¶ 33. The Settlement Administrator will mail the proposed Notice of Class Action Settlement and Claim Form (collectively "Notice Packet") in both English and Spanish to all identified Settlement Class Members via first-class U.S. Mail. Id . ¶¶ 35, 36. The Notice and Claim Form will be sent to the mailing addresses provided by Manpower from its employment records, unless modified by any updated address information obtained by the Claims Administrator after it consults the National Change of Address database or other available resource. Id . ¶ 34. If a Notice is returned because of an incorrect address, the Claims Administrator will conduct a skip trace search for a more current address and re-mail the Notice and accompanying papers to the Settlement Class Member. Id . ¶ 38. The Settlement Administrator will also mail out reminder postcards to settlement class members who have not yet responded no later than 30 calendar days after the date of first mailing. Id . ¶ 39.
To claim his or her share of the Settlement Class Settlement Proceeds, a Settlement Class Member must submit to the Settlement Administrator an executed Claim Form that is postmarked within 60 calendar days of the initial mailing of the Notice. Id . ¶ 40. The proposed Settlement Notice, which is attached as Exhibit 1 to the Settlement Agreement, explains the terms of the settlement and how to receive a Settlement Payment, object, or opt out. All objections and requests for exclusion must be completed and post-marked within 30 days from the initial mailing of the Notice. Id . ¶¶ 43, 45. In addition, each Claim Form will include an individualized computation of the approximate amount of the individual settlement award that the Settlement Class Member will receive from the Settlement Class Settlement Proceeds, how that amount was calculated, and how the number of issued paystubs used to calculate the settlement payment can be challenged.
Class members will be able to cash their check within 180 days. Any checks that are not cashed within that time period will be distributed to the Legal Aid Society's Employment Law Center, which performs work on behalf of low-wage workers throughout California and which Willner contends has a sufficient nexus to the objectives of the California Labor Code provisions at issue in this action. Ho Decl. ¶ 38.
As part of the settlement, Willner has agreed to release all claims
known or unknown, that arise from or relate to employment with Defendant or its conclusion. The employment-related claims that Plaintiff releases include, but are not limited to, claims arising under any and all national, state, or local laws (including statutes, regulations, other administrative guidance, and common law doctrines), including but not limited to the following: (i) anti-discrimination statutes as amended, such as Title VII of the Civil Rights Act of 1964 and Sections 1981 and 1983 of the Civil Rights Act of 1866, which prohibit discrimination based on race, color, national origin, religion, or sex; the Equal Pay Act, which prohibits paying men and women unequal pay for equal work; the Americans with Disabilities Act and state and local laws, which prohibit discrimination based on disability and failure to reasonably accommodate disability; the California Fair Employment and Housing Act; and any other federal, state, or local laws which prohibit retaliation, discrimination and harassment in employment on the basis of actual or perceived race, color, religion, sex, sexual orientation, ancestry, national origin, physical or mental disability or medical condition, marital status or age, or association with a person who has, or is perceived to have, any of those characteristics, or failure to accommodate pregnancy, disability, religious observance or any other legally protected characteristic, status or activity; (ii) federal employment statutes as amended, such as the WARN Act, which requires that advance notice be given of certain work force reductions; the Employee Retirement Income Security Act of 1974, which, among other things, protects employee benefits; the Occupational Safety and Health Act of 1970, which protects employee health and safety; the Fair Labor Standards Act, which regulates minimum wages, overtime and other aspects of pay and work hours; and the National Labor Relations Act, which protects employees from unfair labor practices and provides rights for protected activity; and (iii) other employment statutes, regulations and laws as amended, such as the Industrial Welfare Commission Orders; the California Labor Code relating to wages, compensation, benefits, hours, overtime, alternative workweek schedules, working conditions, off-the-clock time, split shift premiums, reporting time pay, meal periods and rest breaks, record-keeping penalties, paycheck stub and itemized wage statement penalties, minimum wage penalties, meal and rest period penalties, waiting time penalties, penalties for alleged failure to provide proper seating, and reimbursement of expenses; California Labor Code Section 2699 et seq. (the Private Attorneys General Act of 2004), which provides for penalties, fees and costs for violations of various California wage-hour and other laws; the Family and Medical Leave Act and the California Family Rights Act, which mandate certain leaves of absence; and unfair competition in violation of Business and Professions Code Section 17200. Plaintiff expressly waives the protection of California Civil Code section 1542. Section 1542 provides: "A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor
Ho Decl., Ex. A ¶ 54.
Class members who do not opt out of the action would release the following claims:
[A]ny and all claims, rights, demands, liabilities and causes of action of every nature and description, whether known or unknown, up to and including January 20, 2012, that are related in any way to any claim alleged in the Lawsuit that (1) the Released Parties did not provide accurate, itemized wage statements containing the format or content required by California Labor Code section 226, (2) the Released Parties did not timely pay all wages owed, or (3) otherwise arise from or are related to the allegations in the Lawsuit, whether founded on federal, state, and/or local law, including but not limited to, claims for penalties under California Labor Code section 226 and/or the California Private Attorneys General Act of 2004 (California Labor Code sections 2699 et seq.), claims for unfair business practices in ...