United States District Court, N.D. California
ORDER DENYING PLAINTIFF'S MOTION FOR PRELIMINARY
APPROVAL OF COLLECTIVE AND CLASS ACTION SETTLEMENT RE: DKT.
HAYWOOD S. GILLIAM, JR. UNITED STATES DISTRICT JUDGE
the Court is the motion for preliminary approval of a
collective and class action settlement filed by Plaintiff Roy
Van Kempen (“Plaintiff”). Dkt. No. 45
(“Mot.”). The proposed settlement would resolve
Plaintiff’s wage-and-hour claims against Defendant
Matheson Tri-Gas, Inc. (“Defendant”) under the
Fair Labor Standards Act, 29 U.S.C. § 207, et
seq. (“FLSA”), and various California
reasons set forth below, the Court DENIES Plaintiffs’
motion for preliminary approval of collective and class
action settlement. The parties may correct the deficiencies
in the settlement agreement noted herein and refile an
approval motion for expedited consideration.
Factual Allegations and Procedural History
employed Plaintiff as an hourly, non-exempt delivery driver
of industrial and medical gases. Dkt. No. 48 (“Van
Kempen Decl.”) ¶¶ 3-4. In his operative
complaint, Plaintiff alleges that Defendant intentionally
failed to include the non-discretionary bonuses he received
in calculating his rate of overtime pay. On that basis,
Plaintiff claims that Defendant systematically underpaid his
overtime wages in violation of § 207(a)(1) of the FLSA
and California Labor Code § 510. Dkt. No. 26 (“Am.
Compl.”) ¶¶ 38-39. Plaintiff further alleges
that Defendant had a “use- it-or-lose it”
vacation time policy by which accrued vacation time was
automatically forfeited if not used within a specified time
period. Id. ¶ 65. Plaintiff claims that this
vacation-time policy violated California Labor Code §
227.3. Id. ¶ 66. These claims are asserted in both
Plaintiff’s individual capacity and on behalf of all
other persons similarly situated. Id. ¶ 9.
removed this action from state court under federal question,
diversity, and Class Action Fairness Act jurisdiction. Dkt.
No. 1 & Ex. A. In this Court, Plaintiff amended his
initial complaint to add new state law claims and propounded
formal and informal written discovery on Defendant.
See Dkt. Nos. 26 & 49 (“Hague
Decl.”) ¶¶ 4, 13. The parties then
participated in a private mediation before a retired state
court judge, and the case settled. Id. ¶ 5;
Dkt. No. 42.
Related Class Action Settlement
turning to the terms of the proposed settlement agreement,
the Court must address the class action settlement in a
partially overlapping lawsuit, Ambriz v. Matheson
Tri-Gas, Inc., No. 2:14-cv-04546 (C.D. Cal. Feb. 4,
2016). In that case, the plaintiffs, who were
also employed as delivery drivers by Defendant, asserted a
variety of wage-and-hour claims under California law. Dkt.
No. 50, Ex. 2. The parties entered into a class action
settlement, over which the court granted final approval
before the instant settlement motion was heard by this Court.
Dkt. No. 54 ¶ 4.
Ambriz settlement class includes “all current
and former drivers who were employed by Defendant from March
5, 2010 through June 25, 2015.” Dkt. No. 55, Ex. 1
¶ 2. It releases, by the account of the parties to this
action, every claim asserted in the operative complaint but
for the FLSA overtime claim and the unpaid, accrued vacation
time claim under California Labor Code § 227.3 discussed
above. Mot. at 7; see also Dkt. No. 50, Ex. 3
¶¶ 52-53. The instant settlement, therefore,
purportedly functions only to “fill gaps” in the
Ambriz settlement. See Mot. at 1.
Overview of the Proposed Settlement
that background in mind, the Court now describes the key
terms of the proposed class action settlement in this case.
See Dkt. No. 54, Ex. 2 (“SA”).
are three groups of proposed class members: (1) a FLSA
overtime group comprised of all persons employed by Defendant
nationwide and classified as non-exempt, who worked overtime
while entitled to non-discretionary bonus pay; (2) a
California overtime class comprised of persons employed by
Defendant in California and classified as non-exempt, who
worked overtime while entitled to non-discretionary bonus
pay; and (3) a California vacation-time class comprised of
all persons employed by Defendant in California, who accrued
vacation time but forfeited it. Id. ¶ 8. The
class period for all three proposed classes runs from January
9, 2011, through the date that the Court enters final
approval of the class actions settlement. Id. ¶
10. In total, the parties estimate that there are
approximately 2, 400 putative class members. Id.
will pay a gross total of $370, 000 to resolve this action,
less the requested $103, 000 in attorneys’ fees and
$15, 000 in litigation costs, a $5, 000 incentive award for
Plaintiff, settlement administration costs not anticipated to
exceed $25, 000, and 75% of the $5, 000 penalty under the
Private Attorneys General Act, Cal. Lab. Code § 2698,
et seq. Id. ¶ 23. Based on these assumptions,
the parties estimate that the putative classes will receive a
total of $217, 650. Id. ¶ 34(a). Fifty-two
percent of this amount is allocated to the FLSA nationwide
and California overtime classes. Id. ¶ 33. The
remaining 48% is allocated to the California vacation-time
class. Id. Each individual putative class
member’s payment within each proposed class will be
calculated by dividing the net settlement amount by the total
number of weeks that all members of the relevant proposed
class worked during the class period and then multiplying
that number of compensable workweeks that the individual
worked. Id. ¶ 34(b)(i). Regardless of the
outcome of this formula, each putative class member will
receive a monetary payment of at least $25. Id.
checks left uncashed for 180 days by California class members
will revert to California’s Division of Labor Standards
Enforcement unclaimed wage fund. Id. ¶
34(b)(vii). Settlement checks similarly left uncashed by FLSA
class members will revert in equal part to the Employee
Rights Advocacy Institute for Law & Policy and the UCLA
Institute for Research on Labor and Employment. Id.
is both a class and individual component to the proposed
release. Under the current settlement agreement, putative
class members would release:
“[A]ny and all applicable claims . . . of any nature
and description whatsoever, whether known or unknown . . .
whether under federal, state, and/or local law, which were
asserted in the Action or could have been asserted against
the Released Parties arising out of, derived from, or
related to in any way their compensation by the Released
Parties, or to the claims, matters, transactions or
occurrences referred to in the operative Complaint during the
Id. ¶¶ 63-64 (emphasis added). Released
claims also include derivative violations of
California’s unfair competition law and any and all
related PAGA penalties, as well as any claims
“pertaining to . . . wages . . . whether known or
unknown . . . based on claims related to or arising under
those allegations in the operative Complaint[.]”
Id. Plaintiff would also release these same claims,
but “[i]t is understood and agreed that the
[settlement] will not release Named Plaintiff from claims, if
any, for workers compensation, unemployment, or disability
benefits of any nature.” Id. ¶ 66. It
does not appear that this carve-out for Plaintiff applies to
the putative classes as well.
parties intend to send class notice packages to all
last-known addresses of putative class members by U.S. mail.
Id. ¶ 38. As part of that class notice package,
there are two different class notice forms. See Id.
Exs. 2a & 2b. One notice is apparently for nationwide
FLSA overtime putative class members and the other is for
California putative class members.
members of the California overtime and vacation classes have
the right to opt out of the settlement by submitting a
request for exclusion form within 60 days after the
settlement administrator transmits class notice. Id.
¶ 51. If five percent of either the California overtime
or vacation putative class opts-out of the settlement,
Defendant shall have the unilateral right to terminate the
settlement agreement. Id. ¶¶ 42, 55.
members of the FLSA class must affirmatively opt in to
participate in the FLSA settlement, as required by 29 U.S.C.
§ 216(b). FLSA overtime putative class members must opt
in “by cashing/depositing his/her Settlement
Payment.” Id. ¶ 53; see also Id.
Representative and Class Counsel:
asks to be appointed class representative and for Sutton
Hague Law Corporation to be appointed class counsel.
Id. ¶¶ 26, 36.
seeks a $5, 000 incentive award as class representative.
Id. ¶ 26.
Fees and Costs:
counsel requests attorneys’ fees equal to 28% of gross
settlement amount and litigation costs up to $15, 000.
Id. ¶ 24. Defendant does not oppose this
request. Id. If the fees and costs award that the
Court approves is less than the requested amount, the
difference will revert to Defendant and not to the putative
PROVISIONAL CLASS CERTIFICATION
prerequisite to settlement approval, Plaintiff seeks
provisional certification of the nationwide FLSA overtime
class and provisional certification of the California
overtime and vacation classes. Mot. at 19-23. The Court
discusses the propriety of each in turn.
Nationwide FLSA Class
seeks to conditionally certify for settlement purposes a
nationwide FLSA overtime class comprised of all persons
employed by Defendant nationwide and classified as
non-exempt, who worked overtime while ...