Larkin v. Yelp! Inc.

Filing 35

Statement of Non-Opposition re 32 MOTION for Settlement Preliminary Approval of Class and Collective Action Settlement filed byYelp! Inc.. (Related document(s) 32 ) (Heinicke, Malcolm) (Filed on 5/21/2012)

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Munger, Tolles & Olson LLP
MALCOLM A. HEINICKE (SBN 194174)
[e-mail]
560 Mission Street
Twenty-Seventh Floor
San Francisco, CA 94105-2907
Telephone:
[phone]
Facsimile:
[phone]

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Attorneys for Defendant
YELP! INC.

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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SAN FRANCISCO DIVISION

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JUSTIN LARKIN, ANTHONY
TIJERINO, and AHMAD DEANES, on
behalf of themselves and all others
similarly situated,

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Plaintiffs,
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CASE NO. CV 11-1503 EMC
DEFENDANT’S NOTICE OF NONOPPOSITION TO MOTION FOR
PRELIMINARY APPROVAL OF CLASS
AND COLLECTIVE ACTION
SETTLEMENT

v.
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YELP! INC.,
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Defendant.

Date:
June 4, 2012
Time:
1:30
Courtroom: 5, 17th Floor
Judge:
Honorable Edward M. Chen

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17479496.1

DEF’S NON-OPPOSITION TO MOTION FOR
PRELIMINARY APPROVAL OF SETTLEMENT
CASE NO CV 11-1503 EMC

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Pursuant to Civil L.R. 7-3(b), Defendant Yelp! Inc. hereby states that it does not

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oppose, and instead respectfully requests that the Court grant, Plaintiffs’ Motion for Preliminary

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Approval of Class and Collective Action Settlement. See Docket Entry No. 32.

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As stated in the motion, Defendant does not admit and instead denies any

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wrongdoing or liability. Furthermore, and most pertinent to this Court’s review of the pending

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settlement, Defendant contends that if this matter were litigated further, Plaintiffs would face

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significant obstacles to obtaining class or collective action certification and establishing liability.

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First, as Defendant demonstrated to Plaintiffs in the discussions that led up to the

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settlement, a large number of the former employees in the proposed California class (including

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the two named California plaintiffs themselves) executed severance agreements with general

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releases, which covered the state law claims at issue here. Courts throughout California have

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consistently held that a general release signed by an employee in a severance agreement bars that

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employee from later seeking overtime or other wage claims under California law -- in other

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words, courts consistently uphold the exact sort of release at issue here. See, e.g. Jimenez v. JP

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Morgan Chase & Co., 2008 WL 2036896, *3 (S.D. Cal. 2008); Renov v. ADP Claims Services

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Group, Inc., 2007 WL 5307977, *3 (N.D. Cal. 2007). In so holding, these courts have rejected

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any argument that California Labor Code section 206.5 voids the general release for the simple

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reason that section 206.5 applies only when the employer retains wages that the employer

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concedes are due the employee. Id. As Judge Wilken explained in Renov, section 205.6 was

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enacted to prevent an employer from withholding wages concededly due to force an employee to

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release a claim to the full amount of compensation owed; if the employer contests that the wages

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are due or additional compensation is paid for the release, then section 206.5 simply does not

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apply and the release is valid. Renov, 2007 WL 5307977 at *3.

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In addition, and also in exchange for monetary consideration, a majority of the

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current employees within the proposed class voluntarily executed release agreements, which

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expressly and specifically released the claims subsequently filed in this lawsuit. Just as California

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courts have made clear that separation releases are valid, they have also held that pre-certification

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releases like those signed by Account Executives here are valid. See, e.g. Chindarah v. Pick Up
17479496.1
-1DEF’S NON-OPPOSITION TO MOTION FOR
PRELIMINARY APPROVAL OF SETTLEMENT
CASE NO CV 11-1503 EMC

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Stix, Inc., 171 Cal. App. 4th 796, 803 (2009). Chindarah squarely held that an employer may

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obtain a general release from current employees in exchange for monetary payment even if a class

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action lawsuit for unpaid overtime is imminent or has been filed, and such releases bar putative

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class members from recovering damages as part of the eventual lawsuit.
Finally, many of the employees not subject to releases executed arbitration

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agreements that contain class and collective action waivers. Defendant submits that there can be

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little doubt that these arbitration provisions are enforceable in the context of standard wage and

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hour claims. See AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740, 1745 (2011); Valle v.

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Lowe's HIW, Inc., No. 11–1489 SC, 2011 WL 3667441 (N.D.Cal. Aug. 22, 2011) (upholding the

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validity of a class action waiver in the context of a wage and hour action and citing cases for the

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proposition that “in light of Concepcion, Gentry is no longer good law”). Indeed, even if Gentry

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somehow remained good law, the class/collective action waiver provision would still be

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enforceable because employees were given the option to opt out of the arbitration program. See

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Arellano v. T-Mobile USA, Inc., No. C 10–05663 WHA, 2011 WL 1362165 (N.D. Cal. 2011)

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(holding that a class waiver was not unconscionable under former California law because the

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individuals in question had an opportunity to opt out of the arbitration program) (citing Circuit

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City Stores, Inc., v. Ahmed, 283 F.3d 1198, 1199–200 (9th Cir. 2002) and Circuit City Stores,

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Inc., v. Najd, 294 F.3d 1104, 1108 (9th Cir. 2002)).

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Second, Defendant contends that even if those individuals not subject to the

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release agreements could somehow proceed in court, they would still be unable to obtain class or

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collective action certification. This is because Plaintiffs are essentially alleging that they worked

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off-the-clock during the pertinent period and that Defendant knew that they were doing so, but

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did not make additional payments.

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Although Plaintiffs do not and cannot allege that Defendant required the pertinent

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employees to work overtime without extra compensation, Plaintiffs argued that Defendant knew

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or should have known about such overtime work because, they contend, (a) Yelp encourages

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overtime work by offering incentive compensation; and (b) any overtime work would occur in the

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office.
17479496.1

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DEF’S NON-OPPOSITION TO MOTION FOR
PRELIMINARY APPROVAL OF SETTLEMENT
CASE NO CV 11-1503 EMC

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The mere fact that an employer offers incentive compensation does not establish

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that employees choose to work unrecorded overtime and that the company has actual or

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constructive knowledge of such practices. Companies frequently offer incentive compensation to

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encourage efficient and high quality work, and doing so is not a per se violation of either

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California or federal overtime law. See Koike v. Starbucks Corp., 2008 WL 7796650 (N.D. Cal.

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2008) (“it does not follow that simply because [the employees] had an incentive to work off the

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clock that they actually did so and that [the employer] knew of such off-the-clock work”).

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Similarly, though it is true that any overtime would occur in the office, this alone does not

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establish that employees actually worked overtime or that Defendant’s management knew or

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should have known of such work. Indeed, Account Executives are not required to arrive and

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leave at a specific hour, but instead have the flexibility to arrive in a general time frame, i.e., one

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Account Executive could arrive at 7 a.m. and leave at 3:30 p.m (which occurs, for example, when

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a west coast based Account Executive has a territory on the east coast), while another Account

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Executive could arrive at 9 a.m. and leave at 5:30 p.m. In addition, Account Executives are given

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the freedom to stop work to perform personal errands during the day, so that an Account

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Executive could come in at 8 a.m., take an hour for lunch, run an errand at 2:30 p.m. for an hour,

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and then leave at 6 p.m. The resulting fluctuations in work hours means that there is no reason

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management could or should know about isolated instances of work over eight hours per day or

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forty hours per week by individual Account Executives.

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Similarly, Plaintiffs have not alleged that they ever told management that they

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worked more than eight hours a day or forty hours per week, that they ever discussed working

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unpaid overtime with management, or that Yelp ever received a meaningful number of

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complaints about unpaid overtime. As such, Defendant takes the position if litigation were to

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proceed, primary contested factual issues would include (a) whether each Account Executive

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worked overtime; (b) whether Yelp knew or should have known that the Account Executive

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worked overtime; (c) if so, whether such time was de minimis; and (d) if any wages are owed for

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uncompensated time, whether such wages are subject to an offset for payments for time that was

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not actually worked. Those factual issues would require individual analysis.
17479496.1
- 3 - DEF’S NON-OPPOSITION TO MOTION FOR
PRELIMINARY APPROVAL OF SETTLEMENT
CASE NO CV 11-1503 EMC

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Third, Defendant vigorously disputes the notion that any of the Account

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Executives in question worked significant amounts of overtime without additional compensation.

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Because the key component of an Account Executive’s job is communicating with local

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businesses, an Account Executive’s hours necessarily mimic the hours that local businesses are

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open. In addition, one reason why Yelp is so popular with its employees is that its culture

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encourages Account Executives to work less than eight hours a day and to frequently take breaks

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for lunch, personal errands, and in-office socializing.
Perhaps more importantly, Defendant analyzed objective data from the company’s

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data systems, and these data confirmed that during the pertinent periods, Account Executives

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generally did not work more than eight hours a day or forty hours per week. Defendant also

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obtained statements from pertinent employees confirming that they did not work uncompensated

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overtime. And, Defendant is not aware of any objective data sample to the contrary.
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Despite these strong defenses to the instant claims, Defendant chose to work with

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Plaintiffs and their counsel to resolve this matter. Nevertheless, Defendant respectfully submits

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that the presence of these significant defenses underscores the risks face by the Plaintiffs and the

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absent class members of proceeding with litigation and thus confirms the fairness of this

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settlement to the putative class. Defendant therefore respectfully joins Plaintiffs in requesting

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that the Court grant preliminary approval for the class and collective action settlement.

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DATED: May 21, 2012

Munger, Tolles & Olson LLP

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By: /s/ Malcolm A. Heinicke
Malcolm A. Heinicke
Attorneys for Defendant
YELP! INC.

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17479496.1

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DEF’S NON-OPPOSITION TO MOTION FOR
PRELIMINARY APPROVAL OF SETTLEMENT
CASE NO CV 11-1503 EMC