Case Number: BC669708 Hearing Date: June 05, 2018 Dept: 31

The Joint Motion to Approve Settlement Agreement is DENIED. The parties should be prepared to tell the court whether Plaintiff wishes to proceed with the PAGA claim, dismiss the PAGA claim without prejudice, or file a new motion to approve the proposed settlement.

Defendant filed a “joint motion” requesting that the court approve the settlement agreement between the parties for the payment of $1,000.00 in PAGA penalties. Plaintiff contends that he has settled only his PAGA claim and the settlement is to have no effect on the other employees.

Defendant has failed to provide the court with any evidence that the proposed settlement was submitted to LWDA as required by Labor Code § 2699(l)(2), which requires that the proposed settlement be submitted to the Labor and Workforce Development Agency. The proof of service filed in connection with the instant motion does not list the LWDA and the “recitals” indicating the settlement was submitted to LWDA is not evidence. Therefore, Defendant must demonstrate such service should it move to approve the settlement in the future.

“[C]ivil penalties recovered by aggrieved employees shall be distributed as follows: 75 percent to the Labor and Workforce Development Agency for enforcement of labor laws, including the administration of this part, and for education of employers and employees about their rights and responsibilities under this code, to be continuously appropriated to supplement and not supplant the funding to the agency for those purposes; and 25 percent to the aggrieved employees.” (Labor Code § 2699(i).)

Defendant also failed to provide the court with the actual settlement agreement between the parties and do not provide the court with any context for the minimal $100.00 allocated to the PAGA claim. (Kassel Decl. ¶ 4.) Defendant does not provide the total value of the settlement and does not indicate how many aggrieved employees are affected by the settlement.

There are no guiding regulations nor relevant appellate authority relating to the evaluation of a PAGA settlement. However, court approval is similarly required when class actions end in settlement “[t]o prevent fraud, collusion or unfairness to the class.” (Dunk v. Ford Motor Co. (1996) 48 Cal.App.4th 1794, 1800.) The 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.” (Id. at 1801.) “[A]n informed evaluation of a proposed settlement cannot be made without an understanding of the amount that is in controversy and the realistic range of outcomes of the litigation.” (Clark v. American Residential Services LLC (2009) 175 Cal.App.4th 785, 801.) Defendant must provide the court with additional information to permit the court to make an informed evaluation of the settlement.

Defendant similarly fails to demonstrate the manner in which the remaining $25.00 would be distributed. The remaining settlement amount must be distributed to all aggrieved employees, not just the plaintiff. (Iskanian v. CLS Transp. Los Angeles, LLC (2014) 59 Cal.4th 348, 382 (“The PAGA conforms to these traditional criteria, except that a portion of the penalty goes not only to the citizen bringing the suit but to all employees affected by the Labor Code violation.”) (emphasis added). See also Tanguilig v. Bloomingdale’s, Inc. (2016) 5 Cal.App.5th 665, 676 (“Permitting pursuit of only individual penalties appears inconsistent with PAGA’s objectives.”); Perez v. U–Haul Co. of California (2016) 3 Cal.App.5th 408, 421 (“requiring an employee to bring a PAGA claim in his or her individual capacity, rather than in a representative capacity, would undermine the purposes of the statute.”).)

For these reasons, the joint motion is DENIED in its entirety. Defendant is ordered to give notice.