Conde et al v. 2020 Companies LLC et al

Filing 301

ORDER Requiring Supplemental Briefing re #297 MOTION for Settlement Approval. Supplemental brief due by August 6, 2018 at 12:00 p.m. PST. Signed by Judge Kandis A. Westmore on 7/27/2018. (kawlc2, COURT STAFF) (Filed on 7/27/2018)

1
2
3
4

UNITED STATES DISTRICT COURT

5

NORTHERN DISTRICT OF CALIFORNIA

6
7

CARLOS CONDE, et al.,
Plaintiffs,

8
9

ORDER REQUIRING SUPPLEMENTAL
BRIEFING

v.

10

OPEN DOOR MARKETING, LLC, et al.,

11
United States District Court
Northern District of California

Case No. 15-cv-04080-KAW

Defendants.

Re: Dkt. No. 297

12
13

The Court has reviewed Plaintiffs' motion for settlement approval, and hereby orders

14

Plaintiffs to provide a supplemental brief regarding the following issues. The supplemental brief

15

should be filed no later than August 6, 2018 at 12:00 p.m.

16

A.

17

It is unclear how many opt-in Plaintiffs are affected by the Settlement Agreement. The

Number of Opt-In Plaintiffs

18

motion for settlement approval states there are 177 individuals, whereas the Settlement Agreement

19

and Plaintiffs' notice to the opt-in Plaintiffs state there are 160 individuals. (Plf.'s Mot. for

20

Settlement Approval at 3, Dkt. No. 297; Liss-Riordan Decl., Exh. A ("Settlement Agreement") ¶

21

6; Liss-Riordan Decl., Exh. B at 1.) Plaintiffs shall clarify the number of opt-in Plaintiffs.

22

B.

23

The settlement will be allocated based on the number of weeks worked. (Settlement

24

Agreement ¶ II.D.5.) Specifically, Plaintiffs' counsel will calculate the number of weeks each opt-

25

in Plaintiff claims to have worked for Defendants in California and Nevada. Each week worked in

26

Nevada shall count as one "share," and each week in California shall constitute two "shares."

27

(Settlement Agreement ¶ II.D.5.a.) The total number of shares will be calculated. (Settlement

28

Agreement ¶ II.D.5.b.) The total shares that each individual opt-in Plaintiff shall then be divided

Calculation of Workweeks

1

by the total number of shares to determine the percent of the net settlement amount to which the

2

individual is entitled to. (Settlement Agreement ¶ II.D.5.c-d.) Plaintiffs must explain why the

3

California weeks are being doubled.

4

C.

5

The Settlement Agreement defines "Released Claims" as "the wage and hour claims,

Released Claims

6

known or unknown, that could be asserted under the Fair Labor Standards Act [("FLSA")] or any

7

state law, as defined in Section III A . . . ." (Settlement Agreement ¶ 11.) Section III.A, however,

8

states that the released claims shall be any claims that were pled or "could have been pled in

9

Plaintiffs' Fourth Amended Collective and Class Action Complaint based on the factual
allegations in that complaint, including but not limited to any claims under state or federal statutes

11
United States District Court
Northern District of California

10

or common law regarding the payment of wages . . . ." (Settlement Agreement ¶ III.A.) This

12

suggests a broader release than the wage and hour claims only. Plaintiffs shall confirm that the

13

Settlement Agreement is limited to wage and hour claims as to the opt-in Plaintiffs who are not

14

named Plaintiffs.

15

D.

16

Plaintiffs estimate the maximum liability in this case to be $511,379.05 (excluding civil

Reasonableness of the Settlement

17

penalties under California's Private Attorneys General Act ("PAGA")). (Plf.'s Mot. for Settlement

18

Approval at 3.) The $125,000 settlement amount is 24.4% of the full verdict value. In order for

19

the Court to determine whether this amount is "a fair and reasonable resolution of a bona fide

20

dispute," the Court requires further information. Lynn's Food Stores, Inc. v. United States, 679

21

F.2d 1350, 1354-55 (11th Cir. 1982).

22
23
24

First, Plaintiff must explain how maximum liability was calculated, sufficient for the Court
to determine that this number is a reasonable estimate of Defendants' potential liability.
Second, the Court requires further information on the litigation risks faced by Plaintiffs

25

with respect to the outside salespeople exemption under both the FLSA and the California Labor

26

Code. Specifically, Plaintiffs point to decisions in Vasto v. Credico (USA) LLC, 15 Civ. 9298

27

(PAE), 2017 WL 4877424 (S.D.N.Y. Oct. 27. 2017) and Dailey v. Just Energy Marketing Corp.,

28

Case No. 14-cv-2012-HSG, 2015 WL 4498430 (N.D. Cal. July 23, 2015), but provide no analysis
2

1

of how the facts of the instant case compare to those cases. Without such information, the Court

2

cannot determine if the 75% discount is warranted. Plaintiffs must explain how the outside

3

salespeople exemptions would apply to the facts of the instant case.

4

E.

5

The Settlement Agreement provides that the parties and their counsel shall not discuss the

Non-Disclosure Requirements

6

litigation or settlement with any person, except in limited circumstances. (Settlement Agreement ¶

7

V.) In Gonzalez-Rodriguez v. Mariana's Enterprises, the district court found that "[t]he weight of

8

authority holds that the FLSA does not support confidentiality provisions in settlement

9

agreements. To further Congressional intent of 'private-public' rights under the FLSA, numerous
courts have determined that confidentiality provisions in FLSA settlement agreements do not

11
United States District Court
Northern District of California

10

further resolution of a bona fide dispute between the parties." Case No. 2:15-cv-152-JCM-PAL,

12

2016 WL 3869870, at *4 (D. Nev. July 14, 2016). The district court thus refused to approve a

13

confidentiality provision. Id. The district court also noted that "as a practical matter, the provision

14

was rendered unenforceable when the parties elected to file the settlement agreement in the public

15

record and publicly disclosed the terms of the settlement agreement in the joint motion." Id.

16

In light of Gonzalez-Rodriguez and the authority cited therein, and the fact that the

17

settlement agreement has already been filed on the public record, Plaintiffs must explain whether

18

the non-disclosure provision should be forced

19

F.

20

Plaintiffs state that the "release shall be equally binding on the State of California, and

Binding Effect on California

21

shall preclude it from seeking to recover civil penalties from 2020 with respect to any violation of

22

the California Labor Code arising out of such allegations." (Plf.'s Mot. for Settlement Approval at

23

10.) Plaintiffs shall clarify whether this is limited to the PAGA claims only. (See Settlement

24

Agreement ¶ III.C ("This release shall be equally binding on the State of California, and shall

25

preclude it from seeking to recover civil penalties from Defendant with respect to any Released

26

PAGA Claim.").)

27

///

28

///
3

1
2
3
4

Additionally, Plaintiffs shall state whether they received any response from the California
Labor Workforce Development Agency regarding the PAGA settlement.
IT IS SO ORDERED.
Dated: July 27, 2018
__________________________________
KANDIS A. WESTMORE
United States Magistrate Judge

5
6
7
8
9
10

United States District Court
Northern District of California

11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
4