Case Name: Gerardo Castellanos v. Service by Medallion, et al.
Case No.: 2015-1-CV-288369

This is a putative wage and hour class action by employees of defendant Service by Medallion. Before the Court is plaintiff’s unopposed motion for preliminary approval of a class settlement.

I. Factual and Procedural Background

According to the complaint, defendant is a building services management company offering janitorial and maintenance supplies, facilities temporary staffing, tenant improvement, building repair and maintenance, and other services. (Complaint, ¶ 12.) It has over 800 full time employees and is headquartered in Mountain View, California. (Ibid.) Plaintiff alleges that he and other class members spent a majority of their working hours performing non-exempt duties such as event setup, building repairs and maintenance, janitorial services, cleaning, and servicing customers. (Id. at ¶ 13.) However, defendant did not comply with various wage and hour laws applicable to the putative class. (Id. at ¶ 16.)

Plaintiff filed this action on November 23, 2015. The complaint asserts claims for (1) failure to pay overtime wages; (2) failure to provide meal periods; (3) failure to provide rest periods; (4) failure to furnish accurate wage statements; (5) failure to pay earned wages upon termination or discharge; (6) failure to maintain required records; (7) failure to indemnify for expenses; and (8) unfair competition (Business & Professions Code section 17200 et seq.).

In addition to this putative class action, plaintiff filed an individual action against defendant alleging disability discrimination and wrongful termination. That action was assigned to another department in this Court and was dismissed following a settlement in October 2016. Meanwhile, a second plaintiff filed a related action against defendant under the Private Attorneys Act (“PAGA”) in San Mateo County. That action, Gamarra v. Service By Medallion, et al. (Super. Ct. San Mateo County, No. CIV538661) (hereinafter, “Gamarra”), was stayed in favor of this one in October 2016.

The parties have now reached a global settlement of the instant action and the Gamarra PAGA action. Plaintiff moves for an order preliminarily approving the settlement, provisionally certifying the settlement class, approving the form and method for providing notice to the class, and scheduling a final fairness hearing.

II. Analysis

Plaintiff asks this Court to approve a global settlement of this action and the Gamarra PAGA action. This request is appropriate in the sense that a court must review and approve PAGA settlements (Lab. Code, § 2699, subd. (l)(2)) in addition to class action settlements, and it is desirable for a single court to review the global settlement at issue here. However, the Court does not have jurisdiction to approve a settlement in an action pending before another court. Accordingly, assuming they agree that this Court should review the Gamarra settlement, the parties are directed to take appropriate steps to transfer that action here.

In addition, the Court requires further information about the resolution of plaintiff’s individual claims. While it is not called upon to approve the settlement of these claims, the Court does view their outcome as relevant to its evaluation of the proposed class settlement. Plaintiff is directed to lodge his individual settlement agreement with defendant confidentially, in anticipation of in camera review.

Finally, the Court requires further information regarding plaintiff’s valuation of the class and PAGA claims to assess the fairness of the settlement. While it understands that defendant’s financial condition was a major factor in the settlement achieved in this case, and the settlement is likely entitled to a presumption of fairness based on counsel’s recommendation, the Court retains the duty to “independently and objectively analyze the evidence and circumstances before it in order to determine whether the settlement is in the best interests of those whose claims will be extinguished,” based on a sufficiently developed factual record. (Kullar v. Foot Locker Retail, Inc. (2008) 168 Cal.App.4th 116, 130.) Counsel’s estimate of the maximum values of the claims at issue is an important factor in this analysis. Plaintiff shall file a supplemental declaration addressing this issue for the Court’s review.

If these issues are resolved promptly, the Court will endeavor to hear plaintiff’s motion on February 23 as currently scheduled. If not, it will continue the motion to a later date.