2018-00226913-CU-OE

Christopher Salinas vs. JKB Financial, Inc.

Nature of Proceeding: Motion to Approve Private Attorneys General Act Settlement

Filed By: Shimoda, Galen T.

Plaintiff Christopher Salinas’s (“Plaintiff”) motion to approve Private Attorneys General Act (“PAGA”) settlement is unopposed but denied without prejudice.

The first amended complaint (“FAC”) alleges the following causes of action: (1) failure to pay minimum wages; (2) failure to pay overtime; (3) failure to provide rest periods;

(4) failure to provide accurate wage statements; (5) waiting time penalties; (6) violation of Labor Code section 558; (7) unfair competition; and (8) PAGA.

The briefing asks the Court to dismiss Plaintiff’s class action claims without prejudice, approve the PAGA settlement, dismiss the PAGA claims with prejudice, and dismiss Plaintiff’s individual claims with prejudice.

The proposed settlement is for a $50,000 PAGA settlement, with deductions as follows: (1) reasonable costs in the amount of $7,500; (2) settlement administration fees in the amount of $5,000; (3) attorney’s fees in the amount of $20,000 (40% of the settlement); and (4) the employer’s share of the payroll taxes. Of the remainder, the proposed settlement seeks to allocate 75% to the class members and 25% to the Labor and Workforce Development Agency (“LWDA”). As such, the proposed settlement anticipates approximately $14,125 to be distributed to aggrieved employees.

The Court denies the motion without prejudice for the following reasons:

· The proposed order asks for dismissal of the class claims without prejudice but the memorandum of points and authorities and counsel’s declaration do not provide any discussion or analysis. (See Cal. R. Ct. 3.770(a) (“A dismissal of an entire class action, or of any party or cause of action in a class action, requires court approval. . . . Requests for dismissal must be accompanied by a declaration setting forth the facts on which the party relies. The declaration must clearly state whether consideration, direct or indirect, is being given for the dismissal and must describe the consideration in detail.”).)

· The settlement appears to be predominantly related to Plaintiff’s PAGA claim related to Labor Code section 558 but Plaintiff’s FAC indicates that the PAGA claim was predicated under violations of Labor Code sections 510 and 1194 (failure to pay overtime wages); 1194 and 1197.1 (failure to pay minimum wages); 226 and 226.3 (failure to provide accurate wage statements); 201-203 (failure to pay final wages); 558 and 558.1 (provisions regulating hours and days of work in any Industrial Welfare Commission order); and 226.7 (failure to provide rest periods or pay premiums in lieu thereof). Plaintiff’s briefing does not discuss the allocation of the PAGA settlement.

· The motion allocates the settlement payment proceeds to be distributed as

75% to class members and 25% to the LWDA. While the briefing acknowledges that this is a deviation from the typical allocation because unpaid wages attributed to Labor Code section 558 settlements are paid in full to individuals, the briefing does not separate the penalties and the unpaid wages. (See Lab. Code § 2699(i); id. § 558; Thurman v. Bayshore Transit Mgmt., Inc. (2012) 203 Cal.App.4th 1112, 1145.) The motion does not, however, allocate the total settlement between penalties and unpaid wages, and it is unclear whether it recognizes that 25% of the penalties portion is to go to aggrieved employees.

The motion is denied without prejudice due to the failure to adequately brief and explain the above points. (See Lab. Code § 2699(l)(2) (requiring court approval for PAGA settlement).)

The minute order is effective immediately. No formal order pursuant to CRC Rule 3.1312 or further notice is required.