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Delgado v. Marketsource, Inc.

United States District Court, N.D. California, San Jose Division

August 28, 2019

RAY DELGADO, Plaintiff,
v.
MARKETSOURCE, INC., Defendant.

          ORDER APPROVING SECOND AMENDED SETTLEMENT Re: Dkt. No. 84

          Lucy H. Koh United States District Judge.

         Before the Court is Plaintiff's motion for approval of the second amended settlement. On August 15, 2019, the Court held a hearing on Plaintiff's motion. On August 26, 2019, Plaintiff filed a supplemental brief and the parties' amended settlement. On August 27, 2019, Plaintiff filed a second supplemental brief and the parties' second amended settlement. Having considered the parties' submissions, the arguments at the August 15, 2019 hearing, the relevant law, and the record in this case, the Court GRANTS Plaintiff's motion for approval of the second amended settlement.

         I. BACKGROUND

         A. Factual Background

         Defendant “provide[s] outsource sales and marketing for other companies.” ECF No. 37- 1, Ex. D (“Wiley Depo.”), 25:16-18. Defendant employed Plaintiff as a district manager from April 2013 until April 18, 2017. ECF No. 37-5 (“Delgado Decl.”), ¶ 2. Plaintiff supervised employees who sold cellular phones inside Target stores. Id. ¶ 3. Plaintiff “was responsible for staffing these sales departments, as well as managing inventory and tracking supplies.” Id. Plaintiff terminated at least three of Defendant's employees during Plaintiff's employment with Defendant. ECF No. 42-1, Ex. E (“Delgado Depo.”), 112:21-117:20; 134:10-22.

         1. Defendant's Policies and Practices for Paying Final Wage Statements

         Defendant pays its employees their wages via either electronic direct deposit or a paper check. Wiley Depo. 32:11-12. When Defendant fires an employee, Defendant distributes the employee's final paycheck through similar means, via either direct deposit or a paper check sent overnight with Federal Express (“FedEx”). Id. at 162:23-25. According to Defendant's policies, Defendant pays fired employees their final wages “in accordance with state law.” ECF No. 42-1, Ex. B; see also Wiley Depo. 135:2-15 (testifying that Defendant's practice is for a fired employee to “have a check that day”). California law requires Defendant to pay fired employees their final wages “immediately.” Cal. Labor Code § 201.

         In order to comply with California law, Defendant maintains the following policies and practices. Before a manager decides to terminate an employee, Defendant requires the manager to receive approval from Defendant's human resources department. ECF No. 42-4 (“Wiley Decl.”), ¶ 9. Then, the manager must complete an Employee Status Form (“ESF”), which documents the employee's name, termination date, and reason for termination. Wiley Depo. at 149:1-18. Defendant's human resources department must authorize the ESF. Id. at 149:23-25. Eventually, the ESF is sent to Defendant's payroll department to prepare the employee's final paycheck. Id. at 150:2-6. When Defendant pays final wages by direct deposit, the “final wages are typically . . . processed the day before the termination date such that the funds are in the employee's bank account on the last day of employment.” Wiley Decl. ¶ 11. If using direct deposit might delay an employee's receipt of final wages, or if the employee receives her regular wages by paper check, Defendant issues a paper check and sends it to the fired employee via overnight FedEx. Id.

         Defendant's Managers Guide to Paying Hourly Employees also includes instructions regarding the payment of final wages. ECF No. 42-3, Ex. A. The Managers Guide informs managers that “in some states”-including California-“an employee is due his or her final wages immediately upon termination.” Id. at 1, 4. As a result, the Managers Guide instructs managers to contact human resources “as soon as possible . . . when the manager makes the decision to terminate an employee.” Id. at 1. Plaintiff received an email from a payroll specialist reminding him to approve timecards for to-be-fired employees when submitting the ESF for those employees because “CA is immediate payout state.” ECF No. 42-1, Ex. G. Finally, Defendant's payroll department maintains an internal document that lists “immediately” as the payout date for involuntarily terminated employees in California. ECF No. 42-4, Ex. C.

         2. Plaintiff's Termination

         On April 18, 2017, Plaintiff had a meeting with his supervisor, Gary Slate, at which Slate informed Plaintiff of his termination. Delgado Decl. ¶ 5. Plaintiff was fired for misconduct. ECF No. 37-1, Ex. A. Plaintiff did not receive his final wage statement until April 19, 2017. Delgado Decl. ¶ 7; see also id., Ex. A (Plaintiff's bank records).

         At this point, the parties' accounts of Plaintiff's termination diverge. Plaintiff asserts that Plaintiff's termination was effective April 18, 2017. Plaintiff points to the ESF for Plaintiff's termination, which lists April 18, 2017 in the “effectiveDate” field. ECF No. 37-1, Ex. A.

         Defendant contends that Plaintiff was terminated effective Wednesday, April 19, 2017. In an email sent before Plaintiff's termination, Plaintiff's manager, Gary Slate, stated that “[t]he ESF and plan was for Wednesday.” ECF No. 42-3, Ex. C. Slate had originally planned to meet with Plaintiff on Wednesday, but Plaintiff was unavailable that day, so Slate and Plaintiff instead met on Tuesday. Id. Slate believes that he informed Plaintiff that Defendant was terminated effective April 19, 2017. ECF No. 42-3 (“Slate Decl.”), ¶ 10. Defendant also points to a confirmation email Slate received when first submitting Plaintiff's ESF on April 12, 2017, in which the effective date for Plaintiff's termination was listed as April 19, 2017. Id., Ex. D. The email confirmation containing Plaintiff's ESF includes, as part of a “Termination Checklist, ” the instruction that “timely timecards are required so that we can ensure the processing of payroll remains compliant” for immediate payout states, including California. Id. (emphasis omitted).

         B. Procedural History

         On November 30, 2017, Plaintiff filed a putative class action complaint against Defendant in California Superior Court for the County of Santa Clara. ECF No. 1, Ex. 1 (“Compl.”). Plaintiff's complaint alleged claims for (1) failure to provide accurate itemized wage statements in violation of California Labor Code § 226(a); (2) failure to pay all wages owed immediately upon termination in violation of California Labor Code §§ 201, 203; and (3) civil penalties pursuant to California's Private Attorney General's Act (“PAGA”). Id. ¶¶ 29-40.

         On December 29, 2017, Defendant removed Plaintiff's complaint to federal court pursuant to the Class Action Fairness Act, 28 U.S.C. §§ 1332, 1453. ECF No. 1.

         On August 1, 2018, the parties stipulated to strike those portions of Plaintiff's complaint alleging that Defendant violated California Labor Code § 226(a). ECF No. 26. In addition, the parties stipulated to strike Plaintiff's § 226(a) allegations as a basis for Plaintiff's PAGA claim. Id. at 2. Then, on September 5, 2018, the parties stipulated to dismiss Plaintiff's ยง ...


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