SUPERIOR COURT OF CALIFORNIA
COUNTY OF SANTA CLARA

DERMAR MOSES and EDESSA YOUHANA, on behalf of themselves and all others similarly situated,

Plaintiffs,

vs.

ADECCO USA, INC., and DOES 1 through 50 inclusive,

Defendants.
Case No. 2017-1-CV-311980

TENTATIVE RULING RE: MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT

The above-entitled action comes on for hearing before the Honorable Thomas E. Kuhnle on March 23, 2018, at 9:00 a.m. in Department 5. The Court now issues its tentative ruling as follows:

I. INTRODUCTION

This is a putative class action arising out of various alleged Labor Code Violations. According to the allegations of the Second Amended Complaint (“SAC”), filed on November 13, 2017, plaintiffs Dermar Moses and Edessa Youhana (collectively, “Plaintiffs”) and the putative class members were employed by defendant Adecco USA, Inc. (“Defendant”) as recruiters, senior recruiters, staff recruiters, and in other similar, non-management positions. (SAC, ¶ 1.) Plaintiffs allege that during the California class period, Defendant had a policy and/or practice of (1) requiring recruiters to work in excess of eight hours per day and/or in excess of forty hours per week without paying overtime compensation; (2) failing to provide meal periods; (3) failing to provide rest periods; (4) failing to pay compensation owed upon termination; and (5) failing to furnish timely, accurate wage statements. (SAC, ¶ 6.)

The SAC sets forth the following causes of action: (1) Failure to Pay Overtime; (2) Failure to Provide and/or Authorize Meal and Rest Periods; (3) Failure to Provide Accurate, Itemized Wage Statements; (4) Failure to Pay Earned Wages Upon Discharge and Waiting Time Penalties; (5) Violations of the Unfair Competition Law; and (6) Violation of the Labor Code Private Attorneys General Act (“PAGA”).
The parties have reached a settlement. Plaintiffs move for preliminary approval of the settlement.

II. LEGAL STANDARD

Generally, “questions whether a settlement was fair and reasonable, whether notice to the class was adequate, whether certification of the class was proper, and whether the attorney fee award was proper are matters addressed to the trial court’s broad discretion.” (Wershba v. Apple Computer, Inc. (2001) 91 Cal.App.4th 224, 234-235, citing Dunk v. Ford Motor Co. (1996) 48 Cal.App.4th 1794.)
In determining whether a class settlement is fair, adequate and reasonable, the trial court should consider relevant factors, such as “the strength of plaintiffs’ case, the risk, expense, complexity and likely duration of further litigation, the risk of maintaining class action status through trial, the amount offered in settlement, the extent of discovery completed and the stage of the proceedings, the experience and views of counsel, the presence of a governmental participant, and the reaction of the class members to the proposed settlement.”

(Wershba v. Apple Computer, Inc., supra, 91 Cal.App.4th at pp. 244-245, citing Dunk, supra, 48 Cal.App.4th at p. 1801 and Officers for Justice v. Civil Service Com’n, etc. (9th Cir. 1982) 688 F.2d 615, 624.)

“The list of factors is not exclusive and the court is free to engage in a balancing and weighing of factors depending on the circumstances of each case.” (Wershba v. Apple Computer, Inc., supra, 91 Cal.App.4th at p. 245.) The court must examine the “proposed settlement agreement to the extent necessary to reach a reasoned judgment that the agreement is not the product of fraud or overreaching by, or collusion between, the negotiating parties, and that the settlement, taken as a whole, is fair, reasonable and adequate to all concerned.” (Ibid., quoting Dunk, supra, 48 Cal.App.4th at p. 1801 and Officers for Justice v. Civil Service Com’n, etc., supra, 688 F.2d at p. 625, internal quotation marks omitted.)

The burden is on the proponent of the settlement to show that it is fair and reasonable. However “a presumption of fairness exists where: (1) the settlement is reached through arm’s-length bargaining; (2) investigation and discovery are sufficient to allow counsel and the court to act intelligently; (3) counsel is experienced in similar litigation; and (4) the percentage of objectors is small.”

(Wershba v. Apple Computer, Inc., supra, 91 Cal.App.4th at p. 245, citing Dunk, supra, 48 Cal.App.4th at p. 1802.)

III. DISCUSSION

A. Provisions of the Settlement

The case has been settled on behalf of all recruiters employed in California by Defendant at any time from June 19, 2013, through the date of preliminary approval of the settlement. (Declaration of Bryan Schwartz in Support of Plaintiffs’ Unopposed Motion for Preliminary Approval of Class Action Settlement, Certification of Settlement Class, and Approval of Class Representatives, Class Counsel, and Class Notice (“Schwartz Decl.”), Ex. 1 (“Settlement Agreement”), ¶ 26.) There are 268 class members. (Settlement Agreement, ¶ 35.)

Pursuant to the settlement, Defendant will pay a total of $1,100,000. (Settlement Agreement, ¶ 35.) The settlement amount includes attorneys’ fees and costs up to $250,000, enhancement payments to the two class representatives ($10,000 to Moses and $5,000 to Youhana), claims administration expenses up to $10,000 , and PAGA penalties of $55,000 (of which $41,250 will be paid to the LWDA). (Id. at ¶¶ 58-61.)

Class members will be paid based on workweeks worked. (Settlement Agreement, ¶ 62.) The minimum settlement allocation per class member is $500 and the average payment is more than $2,900. (Id. at ¶ 65; Schwartz Decl., ¶ 8.) Settlement checks uncashed after 180 calendar days will be distributed to cy pres recipient Legal Aid at Work.

B. Fairness of the Settlement

Plaintiffs assert the settlement is the product of arm’s-length negotiations assisted by an experienced mediator. Plaintiffs contend that, absent this settlement, they would likely be unable to certify a class and recover for the Labor Code claims because all class members have signed arbitration agreements with class waivers. Plaintiffs state further that there is substantial contrary authority as to whether recruiters are entitled to overtime pay.

In light of the meaningful recovery for each class member and the high risk of a low or zero recovery in this case, the Court finds the settlement is fair.

Plaintiffs will seek class representative incentive awards of $10,000 for Moses and $5,000 for Youhana.

The rationale for making enhancement or incentive awards to named plaintiffs is that they should be compensated for the expense or risk they have incurred in conferring a benefit on other members of the class. An incentive award is appropriate if it is necessary to induce an individual to participate in the suit. Criteria courts may consider in determining whether to make an incentive award include: 1) the risk to the class representative in commencing suit, both financial and otherwise; 2) the notoriety and personal difficulties encountered by the class representative; 3) the amount of time and effort spent by the class representative; 4) the duration of the litigation and; 5) the personal benefit (or lack thereof) enjoyed by the class representative as a result of the litigation. These “incentive awards” to class representatives must not be disproportionate to the amount of time and energy expended in pursuit of the lawsuit.

(Cellphone Termination Fee Cases (2010) 186 Cal. App. 4th 1380, 1394-1395, quotation marks, brackets, ellipses, and citations omitted.)

Prior to final approval of the settlement, Moses and Youhana must submit declarations specifically detailing their participation in this action.

The Court also has an independent right and responsibility to review the requested attorneys’ 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 will seek attorneys’ fees of $250,000. Plaintiffs’ counsel states that, as of the filing of this motion, class counsel has documented attorneys’ fees in the amount of approximately $92,545, representing 188.3 hours of work. (Schwartz Decl., ¶ 12.) Plaintiffs’ counsel states he will submit a lodestar cross-check at the time of final approval. The Court will evaluate the reasonableness of the requested attorneys’ fees at that time.

C. Conditional Certification of Class

Plaintiffs request the putative class be conditionally certified for purposes of the settlement. Rule 3.769(d) of the California Rules of Court states that “[t]he court may make an order approving or denying certification of a provisional settlement class after [a] preliminary settlement hearing.”

California Code of Civil Procedure Section 382 authorizes certification of a class “when the question is one of a common or general interest, of many persons, or when the parties are numerous, and it is impracticable to bring them all before the court . . . .” As interpreted by the California Supreme Court, Section 382 requires: (1) an ascertainable class; and (2) a well-defined community of interest among the class members. (Sav-On Drug Stores, Inc. v. Superior Court (2004) 34 Cal.4th 319, 326.) The “community-of-interest” requirement encompasses three factors: (1) predominant questions of law or fact; (2) class representatives with claims or defenses typical of the class; and, (3) class representatives who can adequately represent the class. (Id. at p. 326.) “Other relevant considerations include the probability that each class member will come forward ultimately to prove his or her separate claim to a portion of the total recovery and whether the class approach would actually serve to deter and redress alleged wrongdoing.” (Linder v. Thrifty Oil Co. (2000) 23 Cal.4th 429, 435.) The plaintiff has the burden of establishing that class treatment will yield “substantial benefits” to both “the litigants and to the court.” (Blue Chip Stamps v. Superior Court (1976) 18 Cal.3d 381, 385.)

As explained by the California Supreme Court,
The certification question is essentially a procedural one that does not ask whether an action is legally or factually meritorious. A trial court ruling on a certification motion determines whether the issues which may be jointly tried, when compared with those requiring separate adjudication, are so numerous or substantial that the maintenance of a class action would be advantageous to the judicial process and to the litigants.

(Sav-On Drug Stores, Inc. v. Superior Court, supra, 34 Cal.4th at p. 326, internal quotation marks, ellipses, and citations omitted.)
Class members can be ascertained from Defendant’s records. There are common issues in this case regarding Defendant’s uniform policies and whether they violated the Labor Code. No issue has been raised regarding the typicality or adequacy of Plaintiffs as class representatives. In sum, the Court finds that the proposed class should be conditionally certified.

D. Class Notice

The content of a class notice is subject to court approval. “If the court has certified the action as a class action, notice of the final approval hearing must be given to the class members in the manner specified by the court.” (Cal. Rules of Court, rule 3.769(f).)

The notice generally complies with the requirements for class notice. (See Schwartz Decl., Ex. 2.) It provides basic information about the settlement, including the settlement terms, and procedures to object or request exclusion. However, the notice must be modified to make it clear that class members may appear at the final approval hearing and object to the settlement even if no written objection has been submitted and no prior notice has been given.

E. Conclusion

Subject to modification of the class notice, the motion for preliminary approval is GRANTED. The final approval hearing is set for June 29, 2018, at 9:00 a.m. in Department 5.

The Court will prepare the final order if this tentative ruling is not contested.