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Foster v. Advantage Sales & Marketing, LLC

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

December 9, 2019

WILMA FOSTER, Plaintiff,
v.
ADVANTAGE SALES & MARKETING, LLC., Defendant.

          PRELIMINARY APPROVAL ORDER RE: ECF NO. 42

          LAUREL BEELER, UNITED STATES MAGISTRATE JUDGE.

         INTRODUCTION

         This is an overtime-pay case under federal and California law: a nationwide collective action under the Federal Labor Standards Act (“FLSA”) and a California class action under Federal Rule of Civil Procedure 23.[1] The plaintiffs claim that their employer, defendant Advantage Sales and Marketing, LLC, d/b/a Advantage Solutions, misclassified them as exempt under the FLSA and California law and so failed to pay them requisite compensation. The parties entered into a settlement agreement, and the plaintiffs moved for preliminary approval of the proposed settlement. The court grants the unopposed motion.

         STATEMENT

         1. The Lawsuit

         On November 18, 2018, named plaintiff Wilma Foster filed this wage-and-hours lawsuit on behalf of employees who worked for Advantage as Customer Development Managers-Retail (“CDMRs”) as (1) a FLSA collective action on behalf of a nationwide collective and (2) a class action on behalf of a California class alleging violations of California law.[2] (Shortly after the plaintiff filed the complaint, Advantage reclassified CDMRs from exempt to non-exempt.[3]) The First Amended Complaint (filed on February 4, 2019) added a Private Attorney General Act (“PAGA”) claim.[4] Adam Thimons and Kimberly Schmidt filed consent-to-join forms in December 2018.[5] The Second Amended Complaint (“SAC”) (filed November 20, 2019) added them as named plaintiffs.[6]

         Advantage produced documents and data enabling the plaintiffs to make informed damages assessments, and on March 11, 2019, the parties met in person for a day-long settlement discussion, made progress, and ultimately were unable to settle that day.[7] On March 28, 2019, Advantage filed a motion to compel the opt-in plaintiffs to arbitration and to stay the PAGA claim.[8] The plaintiffs served requests for production relating to the motion to compel, asked the defendant to stipulate to the filing of a SAC, and continued to confer with the defendants about the discovery requests and the SAC.[9] The parties then agreed to a settlement conference and to postpone the plaintiffs' filing their opposition to the motion to compel, and the case was referred to Magistrate Judge Kandis Westmore for a settlement conference.[10] At the settlement conference on September 26, 2019, the parties reached a tentative agreement and memorialized the material terms on the record.[11] They finalized their long-form settlement agreement on November 7, 2019, and agreed to the filing of the SAC, and the plaintiffs thereafter filed the motion for preliminary approval of the settlement and leave to file the SAC.[12]

         The plaintiffs ask for leave to file the SAC, and the court grants leave.[13] The court asks the plaintiffs to file a stand-alone version of the SAC so that it is more obvious on the docket.

         2. Proposed Settlement

         2.1 Settlement Classes

         There are 59 California class members and 261 Non-California opt-in eligible plaintiffs.[14]The proposed California Rule 23 class is as follows:

Individuals employed by Advantage Sales & Marketing LLC d/b/a Advantage Solutions as Customer Development Manager-Retail (“CDMR”) in California during any work week between January 1, 2017 and December 31, 2018 and who were classified as exempt.[15]

         The nationwide proposed FLSA collective is as follows:

Individuals employed by Advantage Sales & Marketing LLC d/b/a Advantage Solutions as Customer Development Manager-Retail (“CDMR”) outside of California during any work week between January 1, 2017 and December 31, 2018 and who were classified as exempt, excluding, however, all California Class Members.[16]

         The settlement agreement specifies the following definitions for the class:

The “California Class” and “California Class Members” means all individuals who are identified by Defendant as having worked as exempt Customer Development Managers-Retail (“CDMR”) for Defendant in California during any workweek between January 1, 2017 and December 31, 2018.
“Non-California Opt-in Eligible Plaintiffs” are the individuals identified by Defendant as having worked as CDMRs in any state other than California during any workweek between January 1, 2017 and December 31, 2018. Non-California Opt-in Eligible Plaintiffs will receive a Notice of Collective Action Settlement and, after final approval of the settlement is granted, a check in the amount of their Individual Payment Amount minus any payroll taxes withheld.
“Non-California Opt-in Plaintiffs” are all Non-California Opt-in Eligible Plaintiffs who elect to opt in to this action pursuant to 29 U.S.C. § 216(b) by cashing their settlement check, as set forth below.
“Participating Claimants” means all California Class Members who do not timely request exclusion from the California Class, and all Non-California Opt-in Plaintiffs.[17]

         2.2 Settlement Amount and Allocation

         The total settlement amount is $1, 200, 000: (1) a “Net Settlement Amount” of $734, 000 ($362, 000 to the California plaintiffs and $372, 000 to the non-California plaintiffs[18]), with allocations to individuals of their pro rata share based on workweeks, and allocated one-third to wages and two-thirds to non-wages; (2) $10, 000 for the PAGA claim (deducted from the allocation to the California class members); (3) service awards of $10, 000 to Ms. Foster and $3, 000 each to Mr. Thimons and Ms. Schmidt; (4) one-third (or $400, 000) for attorney's fees; (5) actual litigation costs not to exceed $20, 000; and (6) settlement administration costs not to exceed $20, 000.[19]

         California class members who worked for the entire class period will receive a payment of around $8, 400, and non-California opt-in eligible plaintiffs who worked for the entire collective period will receive around $2, 305.[20] The median recovery is around $7, 990 for the California class members and $1, 470 for the non-California opt-in eligible plaintiffs.[21] Checks will be mailed automatically (with no claim forms required) except for California class members who opt out.[22]For California Class Members who do not opt out or cash their checks within 180 days, the remaining funds will be given to a cy pres beneficiary, Employee Rights Advocacy Institute for Law and Policy, a non-profit that advocates for employee rights.[23] The parties do not anticipate “much if any monies” that will go to the cy pres recipient.[24] If the non-California CMDRs do not cash their checks, they will not be opting into the settlement, their claims will not be released, and the funds will be returned to Advantage.[25]

         2.3 Release

         The release is limited to the claims that were brought or could have been brought based on the facts alleged.[26] The three named plaintiffs have a general release.[27]

         2.4 Administration

         The proposed settlement administrator is Atticus.[28] Five business days after preliminary approval of the settlement, Advantage will give Atticus the names, social security numbers, last known addresses, and dates worked as an exempt CDMR during the period from January 1, 2017 to December 31, 2018.[29] Within 14 days of preliminary approval, the administrator will mail notice (and perform a national-change-of-address database review before mailing), and it will try to locate any employees through skip-tracing for any mail returned undeliverable.[30] Other administration procedures - including notice, administration, procedures for exclusion, and procedures for objections - are set forth in the settlement agreement.[31]

         ANALYSIS

         1. Jurisdiction

         The court has federal-question jurisdiction under 28 U.S.C. § 1331 for the FLSA claims and supplemental jurisdiction under 28 U.S.C. § 1367 for the state-law claims.

         2. Conditional Certification of Settlement Classes

         The court determines whether the settlement classes meet the requirements for class certification first under Rule 23 and then under the FLSA.

         2.1 Rule 23 Requirements

         The court reviews the propriety of class certification under Federal Rule of Civil Procedure 23(a) and (b). When parties enter into a settlement before the court certifies a class, the court “must pay ‘undiluted, even heightened, attention' to class certification requirements” because the court will not have the opportunity to adjust the class based on information revealed at trial. Staton v. Boeing Co., 327 F.3d 938, 952-53 (9th Cir. 2003) (quoting Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 620 (1997)); Espinosa v. Ahearn (In re Hyundai and Kia Fuel Econ. Litig.), 926 F.3d 539, 557 (9th Cir. 2019) (en banc).

         Class certification requires the following: (1) the class must be so numerous that joinder of all members individually is “impracticable”; (2) there must be questions of law or fact common to the class; (3) the claims or defenses of the class representatives must be typical of the claims or defenses of the class; and (4) the person representing the class must be able to fairly and adequately protect the interests of all class members. Fed.R.Civ.P. 23(a); In re Hyundai and Kia, 926 F.3d at 556. Also, the common questions of law or fact must predominate over any questions affecting only individual class members, and the class action must be superior to other available methods for fairly and efficiently adjudicating the controversy. Fed.R.Civ.P. 23(b)(3).

         The court finds preliminarily (and for settlement purposes only) that the Rule 23(a) factors - numerosity, commonality, typicality, and adequacy - support the certification of the class. It also finds preliminarily under Rule 23(b)(3) (and for settlement purposes only) that the common questions predominate over any questions affecting only individual members, and a class action is superior to other available methods.

         First, there are approximately 59 California Class Members.[32] The class is numerous. See Nelson v. Avon Prods., No. 14-cv-02276-BLF, 2015 U.S. Dist. LEXIS 51104, at *15 (N.D. Cal. Apr. 17, 2015).

         Second, there are questions of law and fact common to the class that predominate over any individual issues. Common fact questions are that Advantage classified all CDMRs as exempt during the class period, the CDMRs had the same job duties, Advantage sent them schedules with no meal-and-rest periods on the schedules, and they all had arbitration agreements. Common law questions include whether the arbitration agreements are valid and whether the CDMRs qualify for any of the exemptions under California law or the FLSA. The claims depend on common contentions that - true or false - will resolve issues central to the validity of the claims. Cf. Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 350 (2011); Betorina v. Ranstad US, L.P., No. 15-cv-03646-EMC, 2017 WL 1278758, at *4 (N.D. Cal. Apr. 6, 2017). These common questions predominate over any questions affecting only individual members.

         Third, the claims of the representative parties are typical of the claims of the class. The representative parties and all class members allege wage-and-hours violations based on similar facts. All representatives possess the same interest and ...


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