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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1 2 3 4 Munger, Tolles & Olson LLP MALCOLM A. HEINICKE (SBN 194174) 560 Mission Street Twenty-Seventh Floor San Francisco, CA 94105-2907 Telephone: (415) 512-4000 Facsimile: (415) 512-4077 5 6 Attorneys for Defendant YELP! INC. 7 8 UNITED STATES DISTRICT COURT 9 NORTHERN DISTRICT OF CALIFORNIA 10 SAN FRANCISCO DIVISION 11 12 13 JUSTIN LARKIN, ANTHONY TIJERINO, and AHMAD DEANES, on behalf of themselves and all others similarly situated, 14 Plaintiffs, 15 CASE NO. CV 11-1503 EMC DEFENDANT’S NOTICE OF NONOPPOSITION TO MOTION FOR PRELIMINARY APPROVAL OF CLASS AND COLLECTIVE ACTION SETTLEMENT v. 16 YELP! INC., 17 Defendant. Date: June 4, 2012 Time: 1:30 Courtroom: 5, 17th Floor Judge: Honorable Edward M. Chen 18 19 20 21 22 23 24 25 26 27 28 17479496.1 DEF’S NON-OPPOSITION TO MOTION FOR PRELIMINARY APPROVAL OF SETTLEMENT CASE NO CV 11-1503 EMC 1 Pursuant to Civil L.R. 7-3(b), Defendant Yelp! Inc. hereby states that it does not 2 oppose, and instead respectfully requests that the Court grant, Plaintiffs’ Motion for Preliminary 3 Approval of Class and Collective Action Settlement. See Docket Entry No. 32. 4 As stated in the motion, Defendant does not admit and instead denies any 5 wrongdoing or liability. Furthermore, and most pertinent to this Court’s review of the pending 6 settlement, Defendant contends that if this matter were litigated further, Plaintiffs would face 7 significant obstacles to obtaining class or collective action certification and establishing liability. 8 First, as Defendant demonstrated to Plaintiffs in the discussions that led up to the 9 settlement, a large number of the former employees in the proposed California class (including 10 the two named California plaintiffs themselves) executed severance agreements with general 11 releases, which covered the state law claims at issue here. Courts throughout California have 12 consistently held that a general release signed by an employee in a severance agreement bars that 13 employee from later seeking overtime or other wage claims under California law -- in other 14 words, courts consistently uphold the exact sort of release at issue here. See, e.g. Jimenez v. JP 15 Morgan Chase & Co., 2008 WL 2036896, *3 (S.D. Cal. 2008); Renov v. ADP Claims Services 16 Group, Inc., 2007 WL 5307977, *3 (N.D. Cal. 2007). In so holding, these courts have rejected 17 any argument that California Labor Code section 206.5 voids the general release for the simple 18 reason that section 206.5 applies only when the employer retains wages that the employer 19 concedes are due the employee. Id. As Judge Wilken explained in Renov, section 205.6 was 20 enacted to prevent an employer from withholding wages concededly due to force an employee to 21 release a claim to the full amount of compensation owed; if the employer contests that the wages 22 are due or additional compensation is paid for the release, then section 206.5 simply does not 23 apply and the release is valid. Renov, 2007 WL 5307977 at *3. 24 In addition, and also in exchange for monetary consideration, a majority of the 25 current employees within the proposed class voluntarily executed release agreements, which 26 expressly and specifically released the claims subsequently filed in this lawsuit. Just as California 27 courts have made clear that separation releases are valid, they have also held that pre-certification 28 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 1 Stix, Inc., 171 Cal. App. 4th 796, 803 (2009). Chindarah squarely held that an employer may 2 obtain a general release from current employees in exchange for monetary payment even if a class 3 action lawsuit for unpaid overtime is imminent or has been filed, and such releases bar putative 4 class members from recovering damages as part of the eventual lawsuit. Finally, many of the employees not subject to releases executed arbitration 5 6 agreements that contain class and collective action waivers. Defendant submits that there can be 7 little doubt that these arbitration provisions are enforceable in the context of standard wage and 8 hour claims. See AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740, 1745 (2011); Valle v. 9 Lowe's HIW, Inc., No. 11–1489 SC, 2011 WL 3667441 (N.D.Cal. Aug. 22, 2011) (upholding the 10 validity of a class action waiver in the context of a wage and hour action and citing cases for the 11 proposition that “in light of Concepcion, Gentry is no longer good law”). Indeed, even if Gentry 12 somehow remained good law, the class/collective action waiver provision would still be 13 enforceable because employees were given the option to opt out of the arbitration program. See 14 Arellano v. T-Mobile USA, Inc., No. C 10–05663 WHA, 2011 WL 1362165 (N.D. Cal. 2011) 15 (holding that a class waiver was not unconscionable under former California law because the 16 individuals in question had an opportunity to opt out of the arbitration program) (citing Circuit 17 City Stores, Inc., v. Ahmed, 283 F.3d 1198, 1199–200 (9th Cir. 2002) and Circuit City Stores, 18 Inc., v. Najd, 294 F.3d 1104, 1108 (9th Cir. 2002)). 19 Second, Defendant contends that even if those individuals not subject to the 20 release agreements could somehow proceed in court, they would still be unable to obtain class or 21 collective action certification. This is because Plaintiffs are essentially alleging that they worked 22 off-the-clock during the pertinent period and that Defendant knew that they were doing so, but 23 did not make additional payments. 24 Although Plaintiffs do not and cannot allege that Defendant required the pertinent 25 employees to work overtime without extra compensation, Plaintiffs argued that Defendant knew 26 or should have known about such overtime work because, they contend, (a) Yelp encourages 27 overtime work by offering incentive compensation; and (b) any overtime work would occur in the 28 office. 17479496.1 -2- DEF’S NON-OPPOSITION TO MOTION FOR PRELIMINARY APPROVAL OF SETTLEMENT CASE NO CV 11-1503 EMC 1 The mere fact that an employer offers incentive compensation does not establish 2 that employees choose to work unrecorded overtime and that the company has actual or 3 constructive knowledge of such practices. Companies frequently offer incentive compensation to 4 encourage efficient and high quality work, and doing so is not a per se violation of either 5 California or federal overtime law. See Koike v. Starbucks Corp., 2008 WL 7796650 (N.D. Cal. 6 2008) (“it does not follow that simply because [the employees] had an incentive to work off the 7 clock that they actually did so and that [the employer] knew of such off-the-clock work”). 8 Similarly, though it is true that any overtime would occur in the office, this alone does not 9 establish that employees actually worked overtime or that Defendant’s management knew or 10 should have known of such work. Indeed, Account Executives are not required to arrive and 11 leave at a specific hour, but instead have the flexibility to arrive in a general time frame, i.e., one 12 Account Executive could arrive at 7 a.m. and leave at 3:30 p.m (which occurs, for example, when 13 a west coast based Account Executive has a territory on the east coast), while another Account 14 Executive could arrive at 9 a.m. and leave at 5:30 p.m. In addition, Account Executives are given 15 the freedom to stop work to perform personal errands during the day, so that an Account 16 Executive could come in at 8 a.m., take an hour for lunch, run an errand at 2:30 p.m. for an hour, 17 and then leave at 6 p.m. The resulting fluctuations in work hours means that there is no reason 18 management could or should know about isolated instances of work over eight hours per day or 19 forty hours per week by individual Account Executives. 20 Similarly, Plaintiffs have not alleged that they ever told management that they 21 worked more than eight hours a day or forty hours per week, that they ever discussed working 22 unpaid overtime with management, or that Yelp ever received a meaningful number of 23 complaints about unpaid overtime. As such, Defendant takes the position if litigation were to 24 proceed, primary contested factual issues would include (a) whether each Account Executive 25 worked overtime; (b) whether Yelp knew or should have known that the Account Executive 26 worked overtime; (c) if so, whether such time was de minimis; and (d) if any wages are owed for 27 uncompensated time, whether such wages are subject to an offset for payments for time that was 28 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 1 Third, Defendant vigorously disputes the notion that any of the Account 2 Executives in question worked significant amounts of overtime without additional compensation. 3 Because the key component of an Account Executive’s job is communicating with local 4 businesses, an Account Executive’s hours necessarily mimic the hours that local businesses are 5 open. In addition, one reason why Yelp is so popular with its employees is that its culture 6 encourages Account Executives to work less than eight hours a day and to frequently take breaks 7 for lunch, personal errands, and in-office socializing. Perhaps more importantly, Defendant analyzed objective data from the company’s 8 9 data systems, and these data confirmed that during the pertinent periods, Account Executives 10 generally did not work more than eight hours a day or forty hours per week. Defendant also 11 obtained statements from pertinent employees confirming that they did not work uncompensated 12 overtime. And, Defendant is not aware of any objective data sample to the contrary. ****** 13 14 Despite these strong defenses to the instant claims, Defendant chose to work with 15 Plaintiffs and their counsel to resolve this matter. Nevertheless, Defendant respectfully submits 16 that the presence of these significant defenses underscores the risks face by the Plaintiffs and the 17 absent class members of proceeding with litigation and thus confirms the fairness of this 18 settlement to the putative class. Defendant therefore respectfully joins Plaintiffs in requesting 19 that the Court grant preliminary approval for the class and collective action settlement. 20 21 DATED: May 21, 2012 Munger, Tolles & Olson LLP 22 By: /s/ Malcolm A. Heinicke Malcolm A. Heinicke Attorneys for Defendant YELP! INC. 23 24 25 26 27 28 17479496.1 -4- DEF’S NON-OPPOSITION TO MOTION FOR PRELIMINARY APPROVAL OF SETTLEMENT CASE NO CV 11-1503 EMC

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