Lopez v. P.W. Stephens

          ORDER GRANTING PRELIMINARY APPROVAL OF CLASS AND COLLECTIVE ACTION SETTLEMENT RE: DKT. NO. 64

          JAMES DONATO United States District Judge.

         This is a wage-and-hour class and collective action brought by two named plaintiffs on behalf of themselves and 519 fellow current and former employees who performed asbestos abatement and related work for defendant P.W. Stephens Environmental, Inc. (“PWS”). The parties reached a proposed settlement and now seek preliminary approval. The Court grants preliminary approval and certifies the class for purposes of settlement.

         BACKGROUND

         Plaintiffs are current and former PWS employees who performed asbestos abatement, lead removal, and mold remediation in California during the class period. First Amended Complaint, Dkt. No. 62 ¶ 3. PWS “is an environmental remediation company that provides asbestos abatement and other environmental remediation services to residence and commercial buildings” throughout California. Id. ¶ 3. The named plaintiffs allege that PWS violated the federal Fair Labor Standards Act (“FLSA”) by failing to pay employees minimum wages for all hours worked, failing to provide overtime pay as warranted, and failing to make, keep, and preserve adequate and accurate records of the same. Id. ¶¶ 35-52. Plaintiffs also allege additional wage and hour violations under California law, including failures to pay proper wages, failures to provide duty-free meal periods, failures to reimburse certain employees for expenses related to use and maintenance of company vehicles, and failures to pay all wages due upon termination of employment. Id. ¶¶ 6, 53-110. Plaintiffs also bring California Private Attorney General Act (“PAGA”) and unfair competition law claims. Id. ¶¶ 111-125.

         The parties participated in a full-day mediation on March 9, 2016. Dkt. No. 64 at 6. In that session, they reached a settlement for both the FSLA and Rule 23 classes. The parties now ask the Court for preliminary approval of the settlement.

         DISCUSSION

         I. THE PROPOSED SETTLEMENT

         The proposed class consists of about 519 “individuals who performed asbestos abatement, lead removal, mold remediation and other services” while employed by PWS in California during the class period, which runs from April 29, 2011 through August 21, 2015. Dkt. No. 64-5 at 3-4. Individuals that worked for PWS through a third party, such as subcontractors or staffing agencies, are not included in the class. Id. The proposed FLSA collective action will include the named plaintiffs and all class members who “(a) cash a Settlement Check” and/or (ii) formally opt in to the action “by filing a Consent to Join.” Id. at 4.

         Under the proposed settlement agreement, PWS will pay $1, 500, 000 into a non-reversionary settlement fund, which will be the source of settlement administration costs (up to a maximum of $19, 000), attorney’s fees and costs (up to a maximum of $375, 000 in fees and up to $15, 000 in costs as decided by the Court in subsequent proceedings), class representative service awards for each of the two representatives if the Court approves the request (totaling $10, 000), PAGA penalties to the California Labor and Workforce Development Agency, and monetary relief for the class. Dkt. No. 64-1 ¶¶ 21-24, 28. PWS will separately pay the employer’s share of payroll taxes on the amounts that are paid to the class members for unpaid wages. Dkt. No. 64 at 3. Monetary relief for the class will be provided out of the remaining net settlement fund of $1, 080, 000. Dkt. No. 64-1 at 8.

         The net settlement fund will be distributed to the class “pro rata based upon the number of compensable workweeks each class member worked during the Class period, taking into account their respective last known hourly wages, whether they were assigned additional responsibilities as a Driver, and whether they signed a release prior to this settlement being reached.” Id. ¶ 22. The approximately 426 class members who signed prior releases and received a payment of $500 will have their payments reduced by the amount of the prior payment received. Id. ¶ 23; Dkt. No. 64-5 at 5. By this mechanism, about $213, 000 will be reallocated and distributed to class members who did not sign releases. Class members who did not sign releases will receive a minimum settlement of $500. Dkt. No. 64-1 ¶ 23. Relief for class members with claims for unpaid driving expense reimbursements will be enhanced by a multiplier of 1.1. Dkt. No. 64-5 at 10.

         The class members do not have to submit claim forms to get a settlement check -- checks will be mailed directly to each class member and he or she will have 90 days to cash the check. Dkt. 64 at 2-3. After 90 days, amounts attributable to uncashed checks will be distributed to any qualifying class member who demonstrates that he did not receive payment in the first round. If the remainder amounts to more than $10, 000, a second round distribution to the class will take place. Id. at 3. If the amount remaining from the uncashed checks is less than $10, 000, the funds will be paid to cy pres beneficiary California Rural Legal Assistance, Inc. Dkt. No. 64-5 at 19.

         Under the terms of the Settlement, all class members who do not opt out will release PWS from all claims for:

all causes of action, claims, liens, demands, damages, penalties, fines, wages, liquidated damages, restitutionary amounts, attorneys' fees and costs, punitive damages, controversies and liabilities which were or could have been raised based on the facts, conduct, and/or omissions alleged in the operative Complaint, … and predicated on the foregoing wage and hour violations as well as on any FLSA violation, during the Release Period.

Dkt. No. 64-5 at 19-20. FLSA Collective Action Members who cash settlement checks will specifically release “claims for (1) failure to pay minimum wage under the federal FLSA and (2) underpayment of overtime under the federal FLSA.” Dkt. No. 64-5 at 20. The release period is defined as April 29, 2011 to June 9, 2016 for both sets of claims, since preliminary approval occurred after June 9, 2016. Id. at 5. Each plaintiff for whom the Court approves a service award also will provide a general release of “all claims arising ...