VERONICA CORREA, an individual, SKYE WHITFIELD, an individual, ALEXANDRA CHOATE-BEWLEY, an individual, KELSEY SWANSON, an individual, SENOVEFA MOISES, an individual, on behalf of themselves and all others similarly situated,

Plaintiffs,

vs.

BLAKER EWC INC., a California corporation, EWC EAST BAY INC., a California corporation, AEIEB INC., a California corporation, and CJJ EASE INC., a California corporation, each individually d/b/a/ EUROPEAN WAX CENTER, and DOES 1 through 50, inclusive,

Defendants.
Case No. 2016-1-CV-303880

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 9, 2018, at 9:00 a.m. in Department 5. The Court now issues its tentative ruling as follows:

I. INTRODUCTION

This is a putative wage and hour class action. According to the allegations of the First Amended Complaint (“FAC”), filed on November 6, 2017, defendants Blaker EWC Inc., EWC East Bay Inc., AEIEB Inc., and CJJ Ease Inc. (collectively, “Defendants”) market and sell waxing services and beauty products. (FAC, ¶ 13.) Plaintiffs Veronica Correa, Skye Whitfield, Alexandra Choate-Bewley, Kelsey Swanson, and Senovefa Moises (collectively, “Plaintiffs”) worked for Defendants as wax specialists or guest service associates. (FAC, ¶¶ 12, 15-19.) Plaintiffs allege Defendants have violated various Labor Code provisions.

The FAC sets forth the following causes of action: (1) Failure to Pay Overtime Compensation; (2) Failure to Pay Minimum Wage; (3) Failure to Provide Meal Periods; (4) Failure to Provide Rest Periods; (5) Failure to Pay Vacation Wages; (6) Failure to Reimburse Expenses; (7) Failure to Furnish Accurate Itemized Wage Statements; (8) Waiting Time Penalties; (9) Failure to Timely Pay Earned Wages; (10) Private Attorneys General Act; and (11) Violations of the Unfair Competition Law. 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 the following class:

[A]ll individuals ever employed by [Defendants Blaker EWC Inc. dba European Wax Center, EWC East Bay Inc. dba European Wax Center, AEIEB Inc. dba European Wax Center, and CJJ Ease Inc. dba European Wax Center] as a Wax Specialist or Guest Service Associate for any period of time [from December 9, 2012 through the date of Preliminary Approval].

(Declaration of Christopher D. Banys in Support of Plaintiffs’ Motion for Preliminary Approval of Class Action Settlement (“Banys Decl.”), Ex. A (“Settlement Agreement”), ¶ A(2), (5).) There are approximately 1,049 potential class members. (Banys Decl., ¶ 9.)

Pursuant to the settlement, Defendants will pay a non-reversionary sum of $750,000. (Settlement Agreement, ¶ 36.) This amount includes up to $250,000 for attorneys’ fees (1/3 of the maximum settlement amount), actual costs estimated at $40,000, a PAGA penalty payment of $5,000 of which $3,750 will be paid to the California Labor and Workforce Development Agency, settlement administration costs estimated at $16,000, and an enhancement award of $50,000 total for the five named plaintiffs. (Id. at ¶¶ 1, 12, 23, 33.) Defendants will also make certain changes to their policies and procedures. (Id. at ¶ 46.)

B. Fairness of the Settlement

Plaintiffs assert the settlement was reached through an arms’-length bargaining process that was facilitated by an experienced mediator. Plaintiffs’ counsel states the potential recovery for the case is approximately $3,312,000. (Banys Decl., ¶ 25.) Therefore, the gross recovery for the class is around 22.6 percent of the total potential recovery. This is reasonable considering settlement is a compromise. Additionally, Plaintiffs obtained non-monetary consideration from Defendant. Based on this information, the Court finds the settlement is fair.
Plaintiffs will seek a class representative incentive award of $50,000 to be split between the five named plaintiffs.

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.)
A total of $50,000 for class representative incentive awards is somewhat high. Although each class representative has submitted a declaration discussing the representative’s participation in this action, the declarations do not provide sufficient detail to justify the amount requested for incentive awards. For example, it is not apparent how Kelsey Swanson spent 250 hours on this case. Absent additional information from each named representative specifically detailing the participation in the case, the Court is inclined to grant smaller incentive awards. The Court will make a decision at the time of final approval of settlement. The class representatives may submit supplemental declarations prior to that time with additional information regarding their participation.
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 (1/3 of the total settlement fund) plus costs. While 1/3 of the common fund for attorneys’ fees is generally considered reasonable, Plaintiffs’ counsel should submit lodestar information (including hourly rates and hours worked) prior to the final approval hearing so the Court can compare the lodestar information with the requested fees.

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 Defendants’ records. There are common issues regarding Defendants’ company-wide policies regarding rest breaks, off-the-clock work, and timesheet modifications. 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).)

Notice will be sent by mail and email. (Settlement Agreement, ¶ 51.) The written notice generally complies with the requirements for class notice. (See Settlement Agreement, Ex. 1.) It provides basic information about the settlement, including the settlement terms, and procedures to object or request exclusion. The notice is approved.

E. Conclusion

The motion for preliminary approval is GRANTED. The final approval hearing is set for June 22, 2018, at 9:00 a.m. in Department 5.

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