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Hernandez v. Best Buy Stores, LP

United States District Court, S.D. California

June 6, 2017

JACK HERNANDEZ, on behalf of himself and all others similarly situated, Plaintiff,
BEST BUY STORES, LP and DOES 1 through 50, inclusive, Defendants.


          JEFFREY T. MILLER United States District Judge.

         On May 31, 2017, Plaintiff Jack Hernandez filed an unopposed motion for approval of his settlement with Defendant Best Buy Stores, LP (“Best Buy”). (Doc. No. 87.) The court finds the matter suitable for decision without oral argument pursuant to Civil Local Rule 7.1(d)(1) and, for the following reasons, grants Plaintiff's motion.


         Plaintiff initiated this case on August 2, 2013, in San Diego Superior Court. Best Buy removed it to this court a few months later. (See Doc. No. 1.) The operative complaint alleges that Plaintiff and other salaried general managers of Defendant's “Best Buy Mobile” locations were misclassified as exempt employees and, as a result, improperly denied overtime pay and meal periods. (See Doc. No. 19.) As part of his prayer for relief, Plaintiff seeks civil Private Attorneys General Act (“PAGA”) penalties on behalf of himself, the State of California, the Labor and Workforce Development Agency (“LWDA”), and the putative class of general managers.

         Although Plaintiff initially filed the case as a class action, he did not pursue class certification. Instead, he filed a motion for permissive joinder of three dozen other general managers. The court denied that motion, finding “that because the 36 proposed plaintiffs worked at different stores for different lengths of time, their claims would require individualized and fact-intensive analysis.” (Doc. No. 61 at 6.) In the wake of that decision, those other general managers filed a multi-plaintiff action in San Diego Superior Court, Baroga et al. v. Best Buy Stores, LP, Case No. 37-2015-00037695-CU-OE-CTL.

         Now, nearly four years after it began, Plaintiff and Best Buy have reached an agreement resolving this case in its entirety, including Plaintiff's representative PAGA claim.[1] In the instant motion, Plaintiff asks the court to approve the parties' settlement of that claim.


         California Labor Code section 2699(a) provides:

Notwithstanding any other provision of law, any provision of [the Labor Code] that provides for a civil penalty to be assessed and collected by the Labor and Workforce Development Agency or any of its departments, divisions, commissions, boards, agencies, or employees, for a violation of this code, may, as an alternative, be recovered through a civil action brought by an aggrieved employee on behalf of himself or herself and other current or former employees . . . .

         In essence, PAGA “authorizes an employee to bring an action for civil penalties on behalf of the state against his or her employer for Labor Code violations committed against the employee and fellow employees.” Iskanian v. CLSTrans. Los Angeles, LLC, 59 Cal.4th 348, 360 (2014). A plaintiff who brings a PAGA claim “does so as the proxy or agent of the state's labor law enforcement agencies.” Arias v. Superior Court, 46 Cal.4th 969, 986 (2009). Because the “plaintiff represents the same legal right and interest as state labor law enforcement agencies, . . . a judgment in an employee's action under [PAGA] binds not only that employee but also the state labor law enforcement agencies.” Id. In addition, the judgment “binds all those, including nonparty aggrieved employees, who would be bound by a judgment in an action brought by the government.” Id.

         If the employer employs one or more employees, as is the case here, the civil penalty is $100 for each aggrieved employee per pay period for the “initial violation” and $200 for each aggrieved employee per pay period for each “subsequent violation.” Cal. Lab. Code § 2699(f)(2). Seventy-five percent of the civil penalties are distributed to the LWDA, and the remainder is distributed to the aggrieved employee(s) who initiated the claim. Id. § 2699(i). When PAGA claims are settled, the trial court must “review and approve” the settlement. Id. § 2699(1). In so doing, the court must consider whether the proposed “PAGA settlement is fair and adequate in view of the purposes and policies of the statute.” O'Connor v. Uber Techs., Inc., 201 F.Supp.3d 1110, 1135 (N.D. Cal. 2016). Those purposes and policies include “benefit[ting] the public by augmenting the state's enforcement capabilities, encouraging compliance with Labor Code provisions, and deterring noncompliance.” Id. at 1132-33.


         As set forth in the settlement agreement, [2] the parties have agreed to resolve Plaintiff's representative PAGA claim for $5, 000, with $3, 750 (seventy-five percent) going to the LWDA and $1, 250 (twenty-five percent) going to Plaintiff. The parties assert that these amounts are “fair and reasonable” and declare that the settlement is the product of hard-fought litigation, including extensive discovery and at least one mediation session. However, because the settlement serves to “fully release and forever discharge” Best Buy from any and all PAGA claims “that were asserted or could reasonably have been asserted” in this case, (see Doc. No. 87-2 at 7-8), the court must evaluate, and ultimately approve, the settlement.

         To support his contention that $5, 000 is fair and reasonable, Plaintiff first notes that during the one-year statutory claim period for PAGA penalties, he worked just fourteen pay periods. What's more, “any alleged violation [by Best Buy] would likely be treated as an ‘initial violation' under PAGA”-and thus subject to a penalty of $100 per pay period rather than $200-because ...

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