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Roberts v. Marshalls of CA, LLC

United States District Court, N.D. California

March 28, 2017

KIMBERLY ROBERTS, ET AL., Plaintiffs,
v.
MARSHALLS OF CA, LLC, et al., Defendants.

          ORDER RE: MOTION FOR PRELIMINARY APPROVAL OF SETTLEMENT RE: DKT. NO. 70

          MARIA-ELENA JAMES, UNITED STATES MAGISTRATE JUDGE

         INTRODUCTION

         The parties in this putative class action have reached a tentative settlement agreement. See Bradley Decl., Ex. 1 ("Settlement"), Dkt. No. 70-4. Plaintiffs Kimberly Roberts, Carneisha Forney, and Laurie Mullen (collectively, "Plaintiffs") ask the Court to enter an order (1) preliminarily approving the proposed settlement; (2) conditionally certifying the settlement classes; (3) approving the Notice of Settlement; (4) approving class counsel, class representatives, and claims administrator; (5) approving the establishment of a Qualified Settlement Fund; and (6) scheduling a final approval hearing. See Mot., Dkt. No. 70. The Court heard oral argument on March 16, 2017. Having considered the parties‘ positions, the relevant legal authority, and the record in this case, the Court DENIES Plaintiffs‘ Motion for the reasons set forth below.

         BACKGROUND

         A. Factual Allegations[1]

         Defendants TJ Maxx of CA, LLC ("TJ Maxx"); Marshalls of CA, LLC ("Marshalls"); and HomeGoods, Inc. ("HomeGoods") (collectively, "Defendants") are corporations engaged in the retail sales business in the State of California. SAC ¶ 21. Defendants employed non-exempt workers at their retail store locations and paid these workers an hourly wage based on a forty hour or less work week. Id. ¶ 29.

         Plaintiffs contend Defendants instituted a nationwide policy of "personal package and bag searches, " which requires all hourly employees to wait in line and be searched for possible store items or merchandise taken without permission and/or other contraband. Id. ¶ 30. Employees are searched before leaving for their meal breaks and after clocking out at the end of their shifts. Id. Plaintiffs allege these searches are necessary to the employees‘ primary work and done solely for Defendants‘ benefit. Id.

         Employees are not compensated for time spent waiting for these searches. Id. Because hourly employees often take meal breaks and/or end their shifts at the same time, there are frequently lengthy wait times. Id. ¶ 31. Plaintiffs contend they were not permitted to leave the store until they had been searched. Id. ¶ 32. As a result, Defendants prevented Plaintiffs from taking their full 30-minute meal or 10-minute rest breaks and did not compensate them for missed breaks. Id. ¶ 30.

         Plaintiffs further allege Defendants failed to provide them with wage statements that complied with California Labor Code section 226(a). Id. ¶ 95. Specifically, Defendants did not "incorporate the value of 'employee discounts‘ into the Regular Rate of Pay calculation." Id. ¶ 34. Because the Regular Rate of Pay is used to calculate the Overtime Rate of Pay, Defendants failed to compensate employees at the proper Overtime Rate of Pay and thus did not fully pay Plaintiffs the amount of overtime pay which they were owed. Id. ¶¶ 34-35.

         Finally, Plaintiffs allege that at the termination of their employment, Defendants did not pay Plaintiffs and other class members their unused vested vacation wages or all wages earned. Id. ¶¶ 88-93, 100-05.

         B. Procedural Background

         Roberts originally brought this class action against The TJX Companies, Inc.; Marshalls of CA, LLC; and HomeGoods, Inc. See Compl., Dkt. No. 1. She subsequently amended the Complaint to identify T.J. Maxx and to remove The TJX Companies, Inc. as a defendant. See First Am. Compl., Dkt. No. 27. Roberts filed the operative SAC on March 4, 2015. See SAC. In addition to adding new claims, the SAC names as Plaintiffs Forney and Mullen.

         The SAC alleges Defendants violated various provisions of the California Labor and Business and Professions Code, as well as California‘s Industrial Welfare Commission ("IWC")[2]wage orders. Plaintiffs assert nine causes of action under California law against Defendants: (1) failure to pay wages, Cal. Lab. Code §§ 204, 510, 1194, 1197-98; (2) failure to provide meal periods or compensation in lieu thereof, id. §§ 226.7, 512; (3) failure to permit rest breaks or provide compensation in lieu thereof, id. § 226.7; (4) failure to pay overtime compensation, id. §§ 200, 203, 226, 226.7, 500, 510, 512, 558, 1194, 1198; Cal. Code Regs. tit. 8, § 11140(12); (5) forfeiture of vacation pay, Cal. Lab. Code §§ 203, 227.3; (6) failure to furnish an accurate itemized wage statement, id. § 226; (7) failure to pay compensation upon discharge, id. §§ 201-03; (8) unfair business practices, Cal. Bus. & Prof. Code § 17200 et seq.; and (9) the Private Attorneys‘ General Act of 2004 ("PAGA"), Cal. Lab. Code § 2698 et seq. SAC ¶¶ 51-109. Plaintiffs also assert their first through third causes of action violate "the applicable IWC Wage Order." Id. ¶¶ 53-56, 65, 71-72, 76, 78.

         SETTLEMENT TERMS

         The key provisions of the Settlement are as follows.

         A. The Settlement Classes

         The parties seek to certify two classes for settlement purposes only: a Monetary Payment Class and a Prospective Relief Class. Settlement ¶¶ 1.17, 1.28; see Joint Suppl. Br. at 2, Dkt. No. 72. The Monetary Payment Class includes "all Class Members who do not submit a timely Request for Exclusion (i.e., opt-out), and therefore, are entitled to receive an Individual Settlement Payment." Settlement ¶ 1.17; see Mot. at 9 ("[T]he Monetary Payment class [is] comprised of current and former non-exempt employees who worked at a T.J. Maxx, Marshalls or HomeGoods branded retail store in the State of California at any time from October 10, 2009 through and including August 10, 2016.").

         The Prospective Relief Class refers to "all non-exempt employees working at a T.J. Maxx, Marshalls, or HomeGoods branded retail store in the State of California during the Class Period." Settlement ¶ 1.27; see Mot. at 9 ("[T]he Prospective Relief Class [is] comprised of all non-exempt employees working at a T.J. Maxx, Marshalls or HomeGoods branded retail store in the State of California at any time from October 10, 2009 through and including August 10, 2016 who will in the future be provided with wage statements substantially in the form of the Wage Statement Exemplar.").

         Class members include "all current and former non-exempt employees who worked at a T.J. Maxx, Marshalls or Homegoods branded retail store in the State of California during the Class Period." Settlement ¶ 1.3. The Class Period is defined as October 10, 1999 through and including August 10, 2016. Id. ¶ 1.8. Plaintiffs represent there are 82, 947 potential class members. Mot. at 11.

         B. Remedies

         The Settlement provides for both injunctive and monetary relief. Defendants agree to modify their wage statements to use the proposed Wage Statement Exemplar, a template format Defendants will use to issue wage statements to Prospective Relieve Class Members. Settlement ¶¶ 1.27, 1.41, 3.13.6; see id, Ex. E (Wage Statement Exemplar). Defendants agree to make this modification as soon as practicable, but no later than June 30, 2017. Id. ¶¶ 1.27, 1.41, 3.13.6

         Defendants also agree to pay a maximum of $8.5 million (the "Total Settlement Amount"). Id. ¶ 1.39. The Settlement allocates approximately $5, 525, 000 for the Net Distribution Fund, which represents the funds that will be distributed to class members. Id. ¶ 1.19. The Net Distribution Fund is defined as the Total Settlement Amount less $2, 975, 000 for (1) $2, 610, 000 for proposed Class Counsel‘s proposed attorneys‘ fees and costs; (2) $40, 000 for proposed Class Representative service awards; (3) $75, 000 for the California Labor and Workforce Development Agency‘s portion of the PAGA settlement; and (4) $250, 000 in anticipated settlement administration costs. Id. ¶¶ 1.5-1.6, 1.19, 1.22, 1.33, 1.35.

         C. Distribution of Funds

         Each class member will receive an Individual Settlement Payment, defined as "the amount payable from the Net Distribution Fund to each Class Member who does not exclude himself/herself from the monetary payment portion of this settlement[.]" Settlement ¶¶ 1.16, 3.13.4. The Settlement divides the Individual Settlement Payment into thirds: it allocates one-third to alleged unpaid wages, one-third to alleged penalties, and one-third to alleged interest. Id. ¶ 3.13.5.

         The Individual Settlement Payment will be determined in a two step-process. First, the dollar value of each week will be calculated by dividing the Net Distribution Fund by the total number of weeks worked by the Monetary Payment Class Members during the Class Period, rounded up. Id. ¶ 3.13.4. The dollar value of each week is then multiplied by the total number of weeks the class member worked, rounded up. Id. Plaintiffs estimate that the average Individual Settlement Payment will be $60. Bradley Decl. ¶ 21.

         The Settlement Administrator will mail the Individual Settlement Payments via First Class U.S. Mail to the class members‘ last known mailing address within thirty days of the Settlement‘s Effective Date, that is, the date the Court finally approves the Settlement. Settlement ¶¶ 1.13, 3.13.3. The Settlement Administrator will transmit unclaimed funds to the State of California Controller‘s Office, Unclaimed Property Fund after they become void; checks will become void 120 calendar days after issuance. Id.

         D. Objections and Opt-Outs

         Class members may exclude themselves from the Monetary Payment Class by timely mailing a written request for exclusion to the Settlement Administrator. Id. ¶ 3.12.6. The request for exclusion must contain the class member‘s full name, address, last four digits of his or her social security number, and signature. Id. In addition, it must state in substance,

I wish to exclude myself from the monetary portion of the Settlement in Roberts v. T.J. Maxx of CA, LLC, Marshalls of C, LLC, HomeGoods, Inc., pending in the Northern District Court for the Northern District of California, Case No. 3:13-cv-04731-MEJ. I understand that by requesting to be excluded from the monetary portion of the Settlement, I will receive no money from the Settlement.

Id. Class members may not opt out of the Prospective Relief Class. Id.

         Class members may object to the Settlement by mailing a written notice of objection to the Court. Id. ¶ 3.12.7. The objection must contain (1) the class member‘s full name, address, last four digits of his or her social security number, and signature; (2) the case name and number; (3) the basis for the objection; and (4) a statement indicating whether the class member intends to appear at the final approval hearing. Id.

         E. Attorneys' Fees and Costs, Service Awards, and PAGA Award

         Defendants agree not to oppose any request by Class Counsel to recover a maximum amount of $2, 550, 000 in fees and $60, 000 in costs. Settlement ¶¶ 1.6, 3.13.9.

         The Settlement also provides for a total of $40, 000 in service awards to Plaintiffs: a maximum of $20, 000 to Roberts and $10, 000 each to Forney and Mullen. Id. ¶¶ 1.33, 3.13.8. If the Court awards less than the requested amount, the un-awarded portion will be made available for redistribution to the Monetary Payment Class Members as part of the Net Distribution Fund. Id. ¶ 3.13.8.

         Pursuant to California Labor Code section 2698, the Settlement provides for a maximum award of $100, 000 in PAGA penalties. Id. ¶ 1.22. Seventy-five percent of the PAGA Award will be distributed to the California Labor and Workforce Development Agency; twenty-five percent will be distributed to Class Members as part of the Net Distribution Fund. Id.

         F. Settlement Administrator and Administration Costs

         The parties propose ILYM Group, Inc. to serve as Settlement Administrator. Id. ¶ 3.4. The Settlement requires the Settlement Administrator to, among other things,

1. establish (a) a toll-free telephone number; (b) a website with links to the Notice of Settlement, the Settlement Agreement, and motions for approval and for attorneys‘ fees; and (c) a post office box for receipt of class member communications;
2. prepare, print, and mail the Notice of Settlement;
3. receive and review requests for exclusion, if any;
4. calculate Individual Settlement Payments;
5. calculate and pay any and all payroll tax or other withholdings from the wage portion of the Individual Settlement Payments;
6. provide weekly status reports to the parties;
7. provide a due diligence declaration to the Court prior to the final ...

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