Case Name: Gutierrez v. Google Inc.
Case No.: 2015-1-CV-277104

This is a putative class action brought by plaintiff Rosa Gutierrez (“Plaintiff”). Plaintiff alleges she and the putative class members were employed by Defendant Google, Inc. (Complaint, ¶ 9.) Defendant failed to pay Plaintiff and the class members all wages due, including by: failing to pay overtime premiums; failing to properly maintain records; failing to provide accurate itemized statements for each pay period; failing to properly compensate Plaintiff and class members for necessary expenditures; and requiring or permitting employees to work off the clock. (Ibid.)

The Complaint, filed on February 23, 2015, sets forth the following causes of action: [1] Failure to Provide Required Meal Periods; [2] Failure to Provide Required Rest Periods; [3] Failure to Pay Overtime Wages; [4] Failure to Pay Minimum Wages; [5] Failure to Pay Timely Wages During Employment; [6] Failure to Pay All Wages Due to Discharged and Quitting Employees; [7] Failure to Maintain Required Records; [8] Failure to Furnish Accurate Itemized Wage Statements; [9] Failure to Indemnify Employees for Necessary Expenditures Incurred in Discharge of Duties; [10] Unfair and Unlawful Business Practices; and [11] Representative Action for Civil Penalties. On February 19, 2016, this Court granted Google’s demurrer with leave to amend and on February 22, 2016, Plaintiff filed a First Amended Complaint (“FAC”) alleging similar causes of action to what was pled in the original Complaint.

On May 19, 2016, the parties participated in a mediation presided over by David Rotman, an experienced wage and hour mediator. After a full day of mediation, the parties agreed to settle the matter for a total sum of $4,750,000 which includes approximately 4730 current and former non-exempt employees who work or have worked at Google from Feb. 23, 2011.

Plaintiffs now move for Preliminary Approval of Class Action Settlement.

I. Plaintiff’s Motion for Preliminary Approval of Class Action Settlement

A. 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.)

B. Terms of the Settlement

According to the moving papers, the Total Settlement Amount is $4,750,000 which is broken down as follows: (1) Settlement Administrator fees and expenses not to exceed $30,000; (2) a proposed class representative incentive payment to Plaintiff in the amount of $15,000; (3) attorney’s fees in the amount of $1,583,333.33 representing one-third of the Total Settlement Amount; (4) costs and expenses not to exceed $50,000; (5) a payment to the California Labor and Workforce Development Agency in the amount of $35,625 in settlement of the PAGA claim. The remaining amount of the settlement proceeds (“Net Settlement Amount”) in the sum of $3,036,041.67 will be distributed to the eligible Class Members. The Settlement Allocation Formula for the distribution is set forth below.

According to the terms of the Settlement Agreement, the settlement shares will be determined by the number of workweeks that each Class Member worked. Each Class Member will be credited with one unit for each workweek that he or she worked in a position covered by the Settlement. According to the moving papers, the average Settlement Share for a Class Member will be approximately 641.87, although the amounts will vary depending on the number of workweeks that each Class Member worked.

In assessing the fairness of the Settlement, the Court notes that the settlement was achieved with the assistance of an experienced mediator after a full day of arms-length negotiations. According to the moving papers, the settlement came after extensive investigation and research and the parties engaged in pre-settlement discovery including depositions of two “persons most knowledgeable,” interrogatories, requests for admissions and document requests which included Google’s applicable wage-and-hour policies and related training and information documents as well as timekeeping and payroll data for all non-exempt employees state-wide over the relevant time period. After this was produced, Plaintiff and her counsel obtained an expert and analyzed the data in order to properly evaluate the strength and weaknesses of her case. Google also provided to Plaintiff the results of an independent expert survey that it engaged Field Research Corporation to conduct which was completed by 1933 Class Members.

The moving papers outline the strength and weaknesses of the respective claims and the risks inherent with proceeding with the litigation in lieu of settlement. Specifically, the moving papers discuss the meal and rest period claims, the “off the clock” claims, the expense reimbursement claims, and the derivative claims for inaccurate wage statement penalties, waiting time penalties, failure to maintain required records and unfair competition. Plaintiff discusses the legal defenses raised by Google and the challenges of certifying a class in light of these defenses. Plaintiff’s estimate that the total maximum potential recovery for the Class (exclusive of interest and derivative penalties) to be approximately $34,754,736.27. In terms of the PAGA claim, the proposed payment to the LWDA is $35, 625. There is little discussion in the moving papers as to how this amount was reached and why it represents a fair settlement of the PAGA claim. Without additional information addressing how the PAGA payment to the LWDA was reached, the Court cannot fully assess this aspect of the Settlement.

The Declaration of Matthew J. Matern sets forth the background and experience of counsel in litigating these type of class action lawsuits and the Court is satisfied with the experience and expertise of counsel in handling these type of cases.

Regarding the request for attorney’s fees and expenses, the Court also has an independent right and responsibility to review the requested attorney’s 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 seeks attorneys’ fees and costs in the amount of $1,583,333.33. The moving papers indicate that this amount is not more than 33% of the Settlement and these type of contingency fee payments are recognized under the common fund doctrine, which allows a party recovering a fund for the benefit of others to recover attorney’s fees from the fund itself. (See City and County of San Francisco v. Sweet (1995) 12 Cal.4th 105, 110-111.) Prior to the final approval hearing, counsel should provide detailed information about the lodestar as well as billing records to allow the Court to conduct a lodestar cross-check to further evaluate the reasonableness of the fee request. (See Lealao v. Beneficial Cal. Inc. (2000) 82 Cal.App.4th 19, 46-47.)

Regarding class representative awards, “‘[t]he 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.’ [Citation.] An incentive award is appropriate ‘“if it is necessary to induce an individual to participate in the suit[.]” … [Citation.]’ [Citation.] ‘[C]riteria 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. [Citations.]’ [Citation.] These ‘incentive awards’ to class representatives must not be disproportionate to the amount of time and energy expended in pursuit of the lawsuit. [Citation.]” (Cellphone Termination Fee Cases (2010) 186 Cal.App.4th 1380, 1394-1395.) The moving papers seek an incentive award for the named Plaintiff in the amount of $15,000. While the Court recognizes the fact that such awards are appropriate and supported by the law, the amount requested is higher than this Court typically awards in similar cases. Counsel should provide detailed information from the class representative documenting her involvement in the case and the amount of time spent on the case. Assuming there is proper evidentiary support, the Court views the reasonable range for incentive awards to be in the $10,000-$15,000 range.

C. Conditional Certification of the Proposed Class:

Plaintiff requests that the following settlement class be provisionally certified: “All persons who work or worked for Google in a non-exempt position in California at any time from Februrary 23, 2011, through the date on which the Court grants preliminary approval of the Settlement or August 18, 2016, whichever is sooner.” (Settlement Agreement, Exhibit 1 to Matern Declaration).

Legal Standard

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 the plaintiff to demonstrate by a preponderance of the evidence (1) an ascertainable class and (2) a well-defined community of interest among the class members. (Sav-On Drug Stores, Inc. v. Superior Court (Rocher) (2004) 34 Cal.4th 319, 326, 332.)

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. (Ibid.) “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 (Botney) (1976) 18 Cal.3d 381, 385.)

In the settlement context, “the court’s evaluation of the certification issues is somewhat different from its consideration of certification issues when the class action has not yet settled.” (Luckey v. Superior Court (Cotton On USA, Inc.) (2014) 228 Cal.App.4th 81, 93.) As no trial is anticipated in the settlement-only context, the case management issues inherent in the ascertainable class determination need not be confronted, and the court’s review is more lenient in this respect. (Id., pp. 93-94.) However, considerations designed to protect absentees by blocking unwarranted or overbroad class definitions require heightened scrutiny in the settlement-only class context, since the court will lack the usual opportunity to adjust the class as proceedings unfold. (Id., p. 94.)

Ascertainable Class

“The trial court must determine whether the class is ascertainable by examining (1) the class definition, (2) the size of the class and (3) the means of identifying class members.” (Miller v. Woods (1983) 148 Cal.App.3d 862, 873.) “Class members are ‘ascertainable’ where they may be readily identified without unreasonable expense or time by reference to official records.” (Rose v. City of Hayward (1981) 126 Cal.App.3d 926, 932.)

Here, plaintiff estimated at the time of mediation that there were 4730 current and former employees who can be identified by Google’s records. Class members are easily identifiable from defendants’ payroll records. The Court consequently finds that the class is numerous and ascertainable.

Community of Interest

With respect to the first community of interest factor, “[i]n order to determine whether common questions of fact predominate the trial court must examine the issues framed by the pleadings and the law applicable to the causes of action alleged.” (Hicks v. Kaufman & Broad Home Corp. (2001) 89 Cal.App.4th 908, 916.) The court must also give due weight to any evidence of a conflict of interest among the proposed class members. (See J.P. Morgan & Co., Inc. v. Superior Court (Heliotrope General, Inc.) (2003) 113 Cal.App.4th 195, 215.) The ultimate question is 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. (Lockheed Martin Corp. v. Superior Court, supra, 29 Cal.4th at pp. 1104-1105.) “As a general rule if the defendant’s liability can be determined by facts common to all members of the class, a class will be certified even if the members must individually prove their damages.” (Hicks v. Kaufman & Broad Home Corp., supra, 89 Cal.App.4th at p. 916.)

Here, common legal and factual issues predominate. These issues include whether defendants’ rounding policy was lawful and whether there were legally compliant meal and rest period policies, off the clock policies and expense reimbursement policies.

As to the second factor,

The typicality requirement is meant to ensure that the class representative is able to adequately represent the class and focus on common issues. It is only when a defense unique to the class representative will be a major focus of the litigation, or when the class representative’s interests are antagonistic to or in conflict with the objectives of those she purports to represent that denial of class certification is appropriate. But even then, the court should determine if it would be feasible to divide the class into subclasses to eliminate the conflict and allow the class action to be maintained.

(Medrazo v. Honda of North Hollywood (2008) 166 Cal. App. 4th 89, 99, internal citations, brackets, and quotation marks omitted.) Here, like other members of the class, plaintiff was employed as a nonexempt employee and suffered alleged violations due to defendants’ failure to provide meal and rest periods. The anticipated defenses are not unique to plaintiff, and there is no indication that plaintiff’s interests are otherwise in conflict with those of the class.

Finally, adequacy of representation “depends on whether the plaintiff’s attorney is qualified to conduct the proposed litigation and the plaintiff’s interests are not antagonistic to the interests of the class.” (McGhee v. Bank of America (1976) 60 Cal.App.3d 442, 450.) The class representative does not necessarily have to incur all of the damages suffered by each different class member in order to provide adequate representation to the class. (Wershba v. Apple Computer, Inc. (2001) 91 Cal.App.4th 224, 238.) “Differences in individual class members’ proof of damages [are] not fatal to class certification. Only a conflict that goes to the very subject matter of the litigation will defeat a party’s claim of representative status.” (Ibid., internal citations and quotation marks omitted.)

Plaintiff has the same interest in maintaining this action as any class member would have. Further, she has hired experienced counsel. Plaintiff has sufficiently demonstrated adequacy of representation.

Substantial Benefits of Class Certification

“[A] class action should not be certified unless substantial benefits accrue both to litigants and the courts. . . .” (Basurco v. 21st Century Ins. (2003) 108 Cal.App.4th 110, 120, internal quotation marks omitted.) The question is whether a class action would be superior to individual lawsuits. (Ibid.) “Thus, even if questions of law or fact predominate, the lack of superiority provides an alternative ground to deny class certification.” (Ibid.) Generally, “a class action is proper where it provides small claimants with a method of obtaining redress and when numerous parties suffer injury of insufficient size to warrant individual action.” (Id. at pp. 120-121, internal quotation marks omitted.)

Here, there are an estimated 4730 members of the proposed class. It would be inefficient for the Court to hear and decide the same issues separately and repeatedly for each class member. Further, it would be cost prohibitive for each class member to file suit individually, as each member would have the potential for little to no monetary recovery. It is clear that a class action provides substantial benefits both to the litigants and the Court in this case.

In sum, plaintiff has demonstrated that this action is appropriate for class treatment, and that he and his counsel will adequately represent the class.

Regarding 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. The notice must contain an explanation of the proposed settlement and procedures for class members to follow in filing written objections to it and in arranging to appear at the settlement hearing and state any objections to the proposed settlement. (Cal. Rules of Court, rule 3.769(f).)

In determining the manner of the notice, the court must consider:

(1) The interests of the class;
(2) The type of relief requested;
(3) The stake of the individual class members;
(4) The cost of notifying class members;
(5) The resources of the parties;
(6) The possible prejudice to class members who do not receive notice; and
(7) The res judicata effect on class members.

(Cal. Rules of Court, rule 3.766(e).)

Here, the Proposed Notice is attached as Exhibit A to the Settlement Agreement. The Notice describes the lawsuit, explains the settlement, and instructs class members that they may receive a payment, opt out of the settlement, or object. The release language is provided. The maximum settlement amount is set forth along with itemized estimated deductions for attorney’s fees and expenses, administrator costs and the incentive award with the remainder representing a net settlement fund. The Class Member information sheet is attached which includes for each Class Member the number of covered workweeks upon which his or her individual settlement share will be calculated as well as the estimated amount of the settlement share. The Proposed Notice does need to be changed to indicate that Class Members can either object in writing as set forth in the current Notice, or can appear at the hearing and object at that time without submitting a written objection.

With this minor modification, the notice procedures are adequate. The notice itself complies with the requirements for class notice. It provides basic information about the settlement, including the settlement amount and plan of allocation. It also explains what claims will be released by the settlement and the compensation that will be requested by plaintiffs’ counsel. It instructs potential class members how to dispute their work history information and how to opt out of the class.

Counsel is instructed to submit Supplemental Briefing of the reasonableness of the PAGA Settlement so that the Court can fully assess this aspect of the Settlement. Counsel is also instructed to amend the Notice to advise Class Members that they can object in writing or in person at the Final Fairness Hearing. The Motion for Preliminary Approval will be continued to August 22nd, 2016 at 9 a.m. and Supplemental Briefing will be due no later than August 15, 2016.