United States District Court, N.D. California
ORDER GRANTING PLAINTIFFS' MOTION FOR PRELIMINARY
APPROVAL OF CLASS SETTLEMENT DOCKET NO. 31
M. CHEN United States District Judge
Marcus Betorina, Joseph Diaz, and Fred Bell filed this
lawsuit against Defendant Randstad US, L.P., generally
alleging that that Defendant's security guard employees
were not properly compensated for wages as required under
California law. Docket No. 1-3 Ex. C. Pending before the
Court is Plaintiffs' motion for preliminary approval of
class settlement. Docket No. 31. Defendant filed a statement
of non-opposition regarding the motion for preliminary
approval. Docket No. 34. For the reasons stated at the
hearing and as set forth below, the Court GRANTS
Plaintiffs' motion for preliminary approval.
filed this lawsuit against Defendant in the Superior Court of
the State of California for the County of Alameda on February
13, 2015. Docket No. 1-3 Ex. C. The original complaint
generally alleged that Defendant's security guard
employees were not properly compensated for wages as required
under California law. On April 16, 2015, Plaintiffs filed the
First Amended Complaint, which added a claim under the
California Private Attorneys General Act. Docket No. 1-1 Ex.
A; Docket No. 31-1 (Declaration of Kyle Nordrehaug in Support
of Motion) at ¶ 7.
First Amended Complaint alleges five causes of action: unfair
competition in violation of California Business and
Professions Code §§ 17200, et seq.;
failure to provide accurate itemized statements in violation
of California Labor Code § 226; failure to reimburse
employees for required expenses in violation of California
Labor Code § 2802; failure to timely pay wages when due
in violation of California Labor Code § 203; and
violation of the Private Attorneys General Act, Labor Code
§§ 2698, et seq. Docket No. 1-1 Ex. A.
August 7, 2015, Defendant answered the First Amended
Complaint. Docket No. 1-2 Ex. B. The action was then removed
by Defendant to the U.S. District Court for the Northern
District of California on August 10, 2015. Docket No. 1;
Docket No. 31-1 (Declaration of Kyle Nordrehaug in Support of
Motion) at ¶ 8.
5, 2016, this Court held an initial Case Management
Conference. Docket No. 19. On August 6, 2016, Parties
participated in a good faith, arms-length mediation presided
over by Jeffrey Ross, a respected and experienced mediator of
wage and hour class actions. Docket No. 31-1 (Declaration of
Kyle Nordrehaug in Support of Motion) at ¶ 12. With the
assistance of the mediator, the Parties agreed to settle the
action and signed a Memorandum of Understanding. Id.
Parties then negotiated and prepared the Settlement Agreement
which sets forth the final terms of the Settlement.
Id. B. Settlement Agreement 1. Second
Amended Complaint Attached to the Settlement Agreement
as Exhibit B is Plaintiffs' Second Amended Complaint,
which the Settlement Agreement explains to have
“occurred during the Settlement Period.” Docket
No. 31-1 Ex. 1 (Settlement Agreement) at ¶ 48. The
Second Amended Complaint differs from the First Amended
Complaint in that it additionally asserts the following
claims based on Defendant's uniform policy of failing to
pay overtime compensation to non-exempt employees: failure to
pay overtime wages in violation of California Labor Code
§§510, et seq.; and failure to pay
overtime compensation in violation of the Fair Labor
Standards Act (FLSA), 29 U.S.C. §§201, et
seq. Docket No. 31-1 Ex. 1 Ex. B (Second Amended
Parties have based their Settlement Agreement on the Second
Amended Complaint, the Court treats the Second Amended
Complaint as the operative complaint for settlement purposes.
agreed to the following definition of the Settlement Class:
“all individuals who worked for Defendant Randstad US,
L.P. as Security Guards who were placed out of Randstad
business unit 14023, and classified as non-exempt employees,
from February 13, 2011 to August 8, 2016.” Docket No.
31-1 Ex. 1 (Settlement Agreement) at ¶ 12.
Parties' agreement, Defendant pays $350, 000
(“Gross Settlement Fund”) as consideration for
the Settlement Agreement. Docket No. 31-1 Ex. 1 (Settlement
Agreement) at ¶ 29. This amount includes:
(i) all payments made to Qualified Claimants; (ii) service
awards (i.e., service payments) to the Class Representatives
(of up to $10, 000 each for Plaintiffs Betorina, Bell, and
Diaz); (iii) $3, 500 for the release of any PAGA claims that
could be and/or were asserted; (iv) Settlement Administration
Expenses; (v) Class Counsel's approved attorneys'
fees (of no more than 87, 500); (vi) Class Counsel's
approved litigation costs (of no more than $10, 000); and
(vii) all payroll taxes other than Defendant's portion of
payroll taxes which shall remain the responsibility of
Id. at ¶ 29. Defendant shall fully fund the
Gross Settlement to the Settlement Administrator within
fifteen days of the Effective Date, the date upon which final
approval of the Settlement Agreement is granted by the Court
and the Court's judgment approving the Settlement becomes
final. Id. at ¶ 6.
exchange for the payments, the Settlement Class releases the
any and all claims, rights, demands, charges, complaint,
causes of action, obligations or liability of any and every
kind that were alleged in any version of any complaint filed
in the Action or in the Second Amended Complaint which
occurred during the Settlement Period, and expressly
excluding all other claims, including claims for wrongful
termination, unemployment insurance, disability, workers'
compensation, and claims outside the Settlement Period,
except that Settlement Class Members who do not submit signed
Claim Forms will not release their claims under the Fair
Labor Standards Act (“Released Class Claims”).
Id. at ¶ 48.
Procedures for Claims and Settlement
Settlement Fund is the Gross Settlement Fund minus
distributions for attorneys' fees and costs, expenses of
the Settlement Administrator, service awards, and the payment
to the California Labor & Workforce Development Agency
for release of claims under the Private Attorneys General Act
under Labor Code §§ 2699, et seq. Id. at
¶ 9. Each member of the Settlement Class who submits a
valid Claim Form (“Qualified Claimant”) shall be
entitled to receive a pro rata portion of the Net Settlement
Fund, calculated based on the number of workweeks in which
the member worked during the Settlement Period, divided by
the total number of workweeks worked by all Settlement Class
Members during the said period (“Individual Settlement
Share”). Id. at ¶ 29(c). The entire Net
Settlement Fund will be distributed to Qualified Claimants,
and there will be no reversion of the Net Settlement Fund to
Defendant. Id. at ¶ 10. In order to receive
their Individual Settlement Share, Settlement Class Members
must submit a signed and completed Claim Form to the
Settlement Administrator postmarked no later than forty-five
days after the Class Notice is mailed (or not more than
twenty calendar days after the Class Notice is re-mailed).
Id. at ¶ 43.
Opt-Ins, Opt-Outs, and Objections
a Class Member opts out of the Settlement, he or she will be
bound by the terms of the Settlement Agreement, although in
order to release FLSA claims and become a member of the FLSA
Class, a Class Member must affirmatively sign the FLSA
Opt-In. As described in the Class Notice, in order to opt
out, a Class Member must submit to the Settlement
Administrator, by First Class Mail, a written, signed, and
dated request to opt out, postmarked no later than forty-five
days after the Class Notice is mailed (or not more than
twenty calendar days after the date the Class Notice is
re-mailed). Id. at ¶ 39. Settlement Class
Members who do not opt out may object to the Settlement by
submitting an objection to the Court within forty-five
calendar days after the Class Notice is sent (or not more
than twenty calendar days after the date the Class Notice is
re-mailed). Id. at ¶ 41.
Rule of Civil Procedure 23(e) provides that “[t]he
claims, issues, or defenses of a certified class may be
settled, voluntarily dismissed, or compromised only with the
court's approval.” Fed.R.Civ.P. 23(e). It further
provides that, “[i]f the proposal would bind class
members, the court may approve it only after a hearing and on
finding that it is fair, reasonable, and adequate.”
Fed.R.Civ.P. 23(e)(2). When parties reach a settlement
agreement prior to class certification, as here, the court
has an obligation to “peruse the proposed compromise to
ratify both the propriety of the certification and the
fairness of the settlement.” Staton v. Boeing
Co., 327 F.3d 938, 952 (9th Cir. 2003).
this Court engages in a two-step inquiry. First, the Court
assesses whether a class exists with respect to both the
Settlement Class and the FLSA Class. See Id. (citing
Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 620
(1997)). Second, the Court “determine[s] whether the
proposed settlement is fundamentally fair, adequate, and
reasonable.” Id. (citing Hanlon v.
Chrysler Corp., 150 F.3d 1011, 1026 (9th Cir. 1998)).
Certification of the Settlement Class
Court must determine whether the Settlement Class meets the
requirements for class certification under Federal Rule of
Civil Procedure 23 before determining the fairness of the
Settlement Agreement. See Hanlon, 150 F.3d at 1019.
seeking class certification bear the burden of demonstrating
the elements of Rule 23(a) are satisfied and “must
affirmatively demonstrate . . . compliance with the
Rule.” Wal-Mart Stores, Inc. v. Dukes, 131
S.Ct. 2541, 2551 (2011). If an action meets the prerequisites
of Rule 23(a), the court must consider whether the class is
maintainable under one or more of the three alternatives set
forth in Rule 23(b). Narouz v. Charter Communs.,
LLC, 591 F.3d 1261, 1266 (9th Cir. 2010).
Rule 23(a) Requirements
prerequisites of Rule 23(a) “effectively limit the
class claims to those fairly encompassed by the named
plaintiff's claims.” General Telephone Co. of
the Southwest. v. Falcon, 457 U.S. 147, 155-56 (1982)
(citing General Telephone Co. v. EEOC, 446 U.S. 318,
330 (1980)). Rule 23(a) requires:
(1) the class is so numerous that joinder of all members is
impracticable; (2) there are questions of law or fact common
to the class; (3) the claims or defenses of the
representative parties are typical of the claims or defenses
of the class; and (4) the representative ...