Case Name: Salvatierra v. Intuitive Surgical, Inc.
Case No.: 2014-1-CV-272069

This is a putative employment class action alleging that defendant Intuitive Surgical, Inc. misclassified certain employees as exempt. Currently before the Court are plaintiffs’ motions (1) for leave to file a third amended complaint and (2) for preliminary approval of a class action settlement.

I. Factual and Procedural Background

Plaintiffs are former employees in Intuitive’s Customer Service Group. (Second Amended Complaint (“SAC”), ¶ 1.) They allege that defendants required them and other putative class members to work approximately 50 or more hours per week without overtime pay, and sent generic pre-litigation “acknowledgement” forms and correspondence with vague and confusing terms to former employees in lieu of full payment of owed wages. (Id. at ¶¶ 47-49.) This correspondence offered less than the wages actually owed, implying that all class members worked only 44 hours per week. (Id. at ¶ 49.) The pre-litigation correspondence, as well as additional post-litigation correspondence of a similar nature, violated several provisions of the Labor Code. (Ibid.) Intuitive has also failed to provide accurate time records to members of the class. (Id. at ¶ 50.)

Plaintiffs filed this action on October 21, 2014, and filed the operative SAC on May 29, 2015. The SAC asserts claims for (1) failure to pay overtime wages, (2) failure to furnish timely/accurate wage statements, (3) waiting time penalties, (4) unlawful business practices, (5) conversion, and (6) violation of the Private Attorney General Act (“PAGA”).

The parties have reached a settlement. They now jointly move for an order granting plaintiffs leave to file a third amended complaint adding a seventh cause of action for violation of the Fair Labor Standards Act (“FLSA”), so that the settlement may include a waiver of such claims. Plaintiffs also move for an order preliminarily approving the settlement, provisionally certifying the settlement class, appointing plaintiffs as the class representatives and their counsel as class counsel for settlement purposes, approving the form and method for providing notice to the class, and scheduling a final fairness hearing.

On June 30, 2016, the Court issued a tentative ruling continuing the hearing on this matter to allow supplemental briefing addressing the following issues concerning the settlement: (1) the propriety of resolving this action on a claims-made basis (including a proposal for a more robust notice procedure), or a proposal to eliminate the claim form submission requirement for California class members; (2) the propriety of requiring class members to opt in to an FLSA settlement to receive the benefits of a class settlement, or a proposal for the separate resolution of the FLSA and class claims from separate funds; (3) the adequacy of the settlement amount in light certain issues identified by the Court; (4) the basis for the division of the class into and the allocation of the settlement proceeds among the various subclasses, including a statement of the number of members of each subclass; and (5) the basis for the individual settlement payments to the class representatives and a discussion of their membership in the subclasses.

Plaintiffs and defendant filed separate supplemental briefs on July 25, 2016. Having read and considered the briefs, the Court is satisfied that the structure and value of the claims-made settlement is fair and adequate, so long as more robust notice procedures are adopted to ensure class members are able to receive their settlement payments or opt out of the settlement without releasing their claims if they choose. Furthermore, the Court finds that the requirements of an ascertainable class and a well-defined community of interest are satisfied for purposes of settlement. Class counsel and the currently-named plaintiffs will adequately represent the entire class.

The motion for leave to file a third amended complaint and motion for preliminary approval of the existing settlement are consequently GRANTED, subject to the following modifications to the notice and notice procedures:

1. The Class List will include class members’ last known phone numbers.

2. Before the class notices are sent, the claims administrator will run the Class List through the United States Postal Service’s National Change of Address database to obtain class members’ current addresses.

3. If a written notice is returned as undeliverable, the claims administrator will call the class member’s last known phone number and take other reasonable measures (such as searching in electronic databases) to attempt to locate a current address for that class member within 7 calendar days of receiving the returned notice. The administrator will re-mail the notice to the class member upon confirming a current address.

4. The Notice Period will be 90 days, and class members will also have 90 days to opt in to the FLSA collective action.

5. The portion of page two of the notice set forth in bold font (beginning “PLEASE READ THIS NOTICE CAREFULLY.”) will clearly identify the subclass to which each class member belongs.

6. The notice will be modified to state that class members may appear and object at the final fairness hearing without filing or mailing any written objection with the Court or to counsel.

Finally, the Court has an independent right and responsibility to review the requested attorney fees and only award so much as it determines reasonable. (See Garabedian v. Los Angeles Cellular Telephone Co. (2004) 118 Cal.App.4th 123, 127-128.) Plaintiffs’ counsel should submit billing records and lodestar information prior to the final approval hearing in this matter so the Court can compare the lodestar information with the requested fees. In addition and as previously noted, the $34,951.75 proposed enhancement payments to the class representatives are unusually high. The Court will address the propriety of the enhancement payments at the final fairness hearing.