United States District Court, N.D. California
For Joan Myles, individually and on behalf of all others similarly situated, Plaintiff: Chaim Shaun Setareh, LEAD ATTORNEY, Setareh Law Group, Beverly Hills, CA.
AlliedBarton Security Services, LLC, Defendant, Pro se.
Allied Security Holdings, LLC, Defendant, Pro se.
Spectaguard Acquisition, LLC, Defendant, Pro se.
AlliedBarton Security Services LP, Defendant: Jeremy T. Naftel, Nicole A. Legrottaglie, LEAD ATTORNEYS, Carothers DiSante & Freudenberger LLP, Sacramento, CA.
ORDER DENYING PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT Re: ECF No. 54
JAMES DONATO, United States District Judge.
Named plaintiff Joan Myles filed this employment suit in November 2012 seeking relief on behalf of herself and a putative class of security officers employed by defendant AlliedBarton Security Services. See Compl., ECF No. 1. About four months before trial was scheduled to begin, Myles and AlliedBarton submitted a proposed class settlement for the Court's review. ECF No. 54. The Court advised the parties that the proposed settlement would not be approved, and promised to issue a written order explaining why. ECF No. 60. The Court now does so.
As alleged in the operative complaint, Joan Myles worked for AlliedBarton as a security officer until September 2012. Second Am. Compl. (" SAC") at ¶ 10, ECF No. 51. She asserts that AlliedBarton violated sections 201 and 202 of the California Labor Code by not paying her and other security officers their accrued vacation pay at the end of each assignment, and claims " waiting time" penalties under section 203, penalties for inaccurate wage statements under section 226, and penalties under California's Private Attorney General Act (" PAGA, " codified at sections 2698 et seq .). SAC ¶ ¶ 26-49; Setareh Decl. ¶ 4, ECF No. 54-2.
The proposed settlement envisions a putative class comprised of " all former non-exempt security officers employed by AlliedBarton Security Services, LP in California [after November 9, 2009] except any employee who has individually adjudicated his/her claims [after November 9, 2009]." Proposed Settlement ¶ 7, ECF No. 54-3. The settlement contemplates that the members of the proposed class would give up their rights to sue AlliedBarton for:
any and all wage and hour claims, rights, demands, liabilities and causes of action for actual damages, penalties, liquidated damages, punitive damages, interest, attorneys' fees, litigation costs, restitution, or equitable relief that were or could have been pleaded based on the facts alleged in the operative Complaint.
Id. ¶ 80. The settlement also provides that the " release includes all claims arising under the Federal Fair Labor Standards Act, the California Labor Code, the Industrial Welfare Commission Wage Orders, unfair competition law and other applicable state, federal and local laws related to compensation, wage statements, interest and/or penalties." Id. In addition, the members of the putative class would " forever agree that they shall not accept wages, punitive damages, penalties of any nature, attorneys' fees and costs, or any other relief from any other suit, class or collective action, administrative claim or other claim of any sort or nature whatsoever against [AlliedBarton and related parties]." Id. ¶ 81.
In exchange for these broad releases and other consideration from the putative class, AlliedBarton will pay out a maximum of $1, 750, 000. Id. ¶ 58. To be clear, the putative class members are not getting $1.75 million distributed among them in simple equal shares. The parties propose to deduct first substantial payments for plaintiffs' attorney's fees and costs, a so-called " enhancement" award for Myles, costs of administering the settlement and payment of penalties to the California Labor Workforce and Development Agency. Id. ¶ 60. These deductions reduce the $1.75 million to a " Net Settlement Amount" that will be significantly less. On top of that, the parties propose that AlliedBarton be subject to only a 50% minimum payout of the net amount. Id. at ¶ 61. The unclaimed amount above the 50% guaranteed distribution reverts to AlliedBarton. Id.
There is no guarantee that all the members of the proposed class would see any of this money. To get paid, putative class members must mail in a claim form within forty-five days of notice from the settlement administrator. Id. ¶ 50. Each member who submits a valid claim will receive a sum equal to the Net Settlement Amount divided by the total number of class members (not just those who made claims), plus a small share of the statutory penalty under PAGA. Id., Ex. A at 2; id . ¶ 73. If the total amount distributed to the class members is less than half the Net Settlement Amount, the per-member payment can be increased by up to a factor of two. Id. ¶ 61. If the amount distributed to class members is still less than half the Net Settlement Amount, funds will be paid to the Police Activities League and the California Narcotics Officers Association until the 50% threshold ...