Stonehocker v. Kindred Healthcare Operating, LLC

Filing 71

ORDER GRANTING MOTION FOR FINAL APPROVAL OF CLASS ACTION SETTLEMENT; GRANTING IN PART MOTION FOR ATTORNEYS FEES, COSTS, AND SERVICE AWARDS; JUDGMENT; by Judge Yvonne Gonzalez Rogers granting in part 65 Motion for Attorney Fees; granting 66 Motion for Final Approval of Class Action Settlement. Post-distribution Accounting Report due by 8/20/2021. Compliance Deadline to verify timely filing of post-distribution accounting set for 8/27/2021 09:01 AM. (Attachments: # 1 Exhibit 1, # 2 Exhibit 2)(fs, COURT STAFF) (Filed on 4/27/2021)

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Exhibit 1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 ELIZABETH STAGGS-WILSON, Bar No. 183160 estaggs-wilson@littler.com LITTLER MENDELSON, P.C. 633 West 5th Street, 63rd Floor Los Angeles, California 90071 Telephone: 213.443.4300 Facsimile: 213.443.4299 LISA LIN GARCIA, Bar No. 260582 llgarcia@littler.com ALICE H. WANG, Bar No. 289631 awang@littler.com LITTLER MENDELSON, P.C. 333 Bush Street, 34th Floor San Francisco, CA 94104 Telephone: 415.433.1940 Facsimile: 415.399.8490 Attorneys for Defendant KINDRED HEALTHCARE OPERATING, LLC MATTHEW D. CARLSON, Bar No. 273242 mdcarlson@mdcarlsonlaw.com LAW OFFICE OF MATTHEW D. CARLSON 50 Fountain Plaza, Suite 1400, #206 Buffalo, NY 14202 Telephone: (716) 242-1234 Attorneys for Plaintiff SARAH STONEHOCKER 17 UNITED STATES DISTRICT COURT 18 NORTHERN DISTRICT OF CALIFORNIA 19 20 SARAH STONEHOCKER, on behalf of herself and all others similarly situated, 21 22 23 24 25 Plaintiff, v. KINDRED HEALTHCARE OPERATING, LLC and DOES 1 through 25, Case No. 4:19-cv-02494-YGR JOINT STIPULATION AND CLASS AND REPRESENTATIVE ACTION SETTLEMENT AGREEMENT AND RELEASE Complaint Filed: February 14, 2019 Defendants. 26 27 28 LITTLER M ENDELSON, P.C. 633 West 5th Street 63rd Floor Los Angeles, CA 90071 213.443.4300 JOINT STIPULATION AND CLASS AND REPRESENTATIVE ACTION SETTLEMENT AGREEMENT AND RELEASE 1. CASE NO. 4:19-cv-02494-YGR 1 This Joint Stipulation and Class and Representative Action Settlement Agreement and Release 2 (“Settlement,” “Agreement” or “Settlement Agreement”) is made and entered into by on the one hand 3 Plaintiff SARAH STONEHOCKER, individually and as representative of the Class, as defined below 4 (“Plaintiff or “Class Representative”), and on the other hand Defendant KINDRED HEALTHCARE 5 OPERATING, LLC (“KHO”) and the defendants to be added in the proposed Second Amended 6 Complaint, KINDRED REHAB SERVICES, LLC, KINDRED REHAB SERVICES, INC., 7 REHABCARE GROUP EAST, LLC, REHABCARE GROUP EAST, INC., AMERICAN 8 VITALCARE, LLC, and REHABCARE GROUP OF CALIFORNIA, LLC (collectively 9 “Defendants”). 10 This Agreement is subject to the approval of the Court, pursuant to Rule 23(e) of the Federal 11 Rules of Civil Procedure, 28 U.S.C. § 1711 et seq. and California Labor Code section 2699, and is 12 made for the sole purpose of attempting to consummate settlement of this Action on a class-wide and 13 representative basis subject to the following terms and conditions. As detailed below, in the event the 14 Court does not enter an order granting approval of the PAGA Settlement, as defined below, final 15 approval of the Class Settlement, as defined below, or the conditions precedent are not met for any 16 reason, this Agreement is void and of no force or effect whatsoever. 17 NOW THEREFORE, in consideration of the promises and warranties set forth below, and 18 intending to be legally bound and acknowledging the sufficiency of the consideration and undertakings 19 set forth below, Plaintiff, individually and as representative of the Class, and Defendants agree that 20 the Action shall be, and is finally and fully compromised and settled on the following terms and 21 conditions: 22 1. 23 FACTUAL AND PROCEDURAL BACKGROUND OF ACTION 1.1 On February 14, 2019, Plaintiff filed a putative class action in San Francisco County 24 Superior Court entitled: Sarah Stonehocker, on behalf of herself and all others similarly situated, vs. 25 Kindred Healthcare Operating, LLC, Case No. CGC-19-573756 (the “Complaint”). On April 1, 2019, 26 Plaintiff filed a First Amended Complaint in the Action (the “First Amended Complaint”). 27 28 LITTLER M ENDELSON, P.C. 633 West 5th Street 63rd Floor Los Angeles, CA 90071 213.443.4300 1.2 The Complaint and the First Amended Complaint allege the following causes of action: (1) Failure to Pay Overtime Wages [Cal. Labor Code §§ 510, 1194, 1198; Wage Order No. 4]; JOINT STIPULATION AND CLASS AND REPRESENTATIVE ACTION SETTLEMENT AGREEMENT AND RELEASE 2. CASE NO. 4:19-cv-02494-YGR 1 (2) Failure to Pay Wages When Due [Cal. Labor Code §§ 201-203]; and (3) Unlawful Business 2 Practices [Cal. Bus. & Prof. Code § 17200 et seq.]. 1.3 3 On May 8, 2019, KHO removed the class action to the United States District Court, 4 Northern District of California, where the action is currently pending as Case No. 4:19-cv-02494- 5 YGR. 6 1.4 Prior to mediation, the Parties engaged in discovery, including an exchange of 7 information and documentation about inter alia: the number of current and former putative class 8 members who worked during the relevant time period; Defendants’ operational structure, including 9 breakdown of locations; Defendants’ timekeeping, meal period and rest break policies; documents 10 evidencing Defendants’ communications, training materials, and procedures for managing payment 11 for all hours worked, meal periods and rest breaks; electronic time and pay records for putative class 12 members; arbitration provisions; data necessary to value Plaintiff’s claims; Defendants’ PatientPlus 13 Bonus Plans; and other relevant information, including management-level correspondence, data in 14 Plaintiff’s possession and Plaintiff’s personnel and payroll file. Additionally, prior to mediation, KHO 15 filed, and Plaintiff opposed, an early summary judgment motion (“MSJ”) regarding the release 16 Plaintiff signed as part of another class action settlement entitled Cashon v. Kindred Healthcare 17 Operating, Inc., et al., United States District Court for the Northern District of California No. 3:16- 18 cv-04889-RS. Following the Court’s denial of KHO’s MSJ in September 2019, the Parties focused 19 their efforts on resolving the Action and the Parties agreed to proceed with a mediation before a neutral 20 third party. 21 1.5 On May 20, 2020, the Parties participated in a mediation before Tripper Ortman in an 22 attempt to negotiate a resolution of the Action, a highly-respected neutral mediator who specializes in 23 wage and hour mediations. With mediator Ortman’s assistance, the Parties agreed, subject to approval 24 by the Court, to the Settlement of the Action. The Parties further agreed to enter into this Agreement 25 to memorialize their settlement of the Action. 26 1.6 As part of this Settlement, on or about June 15, 2020, Plaintiff submitted a notice to the 27 LWDA pursuant to the Private Attorneys General Act of 2004 (Cal. Labor Code §§ 2698 et seq.) (the 28 “PAGA Notice”). The PAGA Notice alleged the following causes of action: (1) Failure to Pay Wages LITTLER M ENDELSON, P.C. 633 West 5th Street 63rd Floor Los Angeles, CA 90071 213.443.4300 JOINT STIPULATION AND CLASS AND REPRESENTATIVE ACTION SETTLEMENT AGREEMENT AND RELEASE 3. CASE NO. 4:19-cv-02494-YGR 1 (including minimum, straight, and overtime wages) [Cal. Labor Code §§ 510, 1194, 1197, 1198; Wage 2 Order Nos. 4 and 5; and corresponding California Code of Regulations]; (2) Failure to Pay Wages 3 When Due [Cal. Labor Code §§ 201-204]; (3) Failure to Provide Compliant Meal Breaks [Cal. Labor 4 Code §§ 226.7 and 512; Wage Order Nos. 4 and 5; and corresponding California Code of Regulations]; 5 (4) Failure to Authorize and Permit Compliant Rest Breaks [Cal. Labor Code § 226.7 and Wage Order 6 Nos. 4 and 5; and corresponding California Code of Regulations]; and (5) Failure to Issue Accurate 7 Itemized Wage Statements and Maintain Proper Payroll Records [Cal. Labor Code §§ 226, 1174 and 8 1174.5; Wage Order Nos. 4 and 5; and corresponding California Code of Regulations]. The LWDA 9 did not respond to Plaintiff’s notice during the time prescribed by Cal. Lab. Code § 2699.3. 10 1.7 The Parties believe this Settlement is a fair, adequate and reasonable Settlement of this 11 Action and have arrived at this Settlement after lengthy, extensive arms-length negotiations, facilitated 12 by an experienced wage and hour class action mediator, taking into account all relevant factors, present 13 and potential. This Settlement Agreement shall not be construed in favor of or against any of the 14 Parties by reason of their participation in the drafting of this Settlement Agreement. 15 1.8 Defendants denied and continue to deny each and all of the allegations, claims, and 16 contentions alleged by Plaintiff in the Action. Defendants have expressly denied and continue to deny 17 all charges of wrongdoing or liability against it arising out of any of the conduct, statements, acts or 18 omissions alleged in the Action. Defendants contend that they complied in good faith with California 19 wage and hour laws and has dealt legally and fairly with Plaintiff and Class Members. Defendants 20 further deny that, for any purpose other than settling the Action, these claims are appropriate for class 21 or representative treatment. Nonetheless, Defendants have concluded that further proceedings in the 22 Action would be protracted and expensive and that it is desirable that the Action be fully and finally 23 settled in the manner and upon the terms and conditions set forth in this Agreement in order to dispose 24 of burdensome and protracted litigation, to permit the operation of Defendants’ business without 25 further expensive litigation and the distraction and diversion of its personnel with respect to matters 26 at issue in the Action. Defendants have also taken into account the uncertainty and risks inherent in 27 any litigation, especially in complex cases such as the Action. Defendants have, therefore, determined 28 LITTLER M ENDELSON, P.C. 633 West 5th Street 63rd Floor Los Angeles, CA 90071 213.443.4300 JOINT STIPULATION AND CLASS AND REPRESENTATIVE ACTION SETTLEMENT AGREEMENT AND RELEASE 4. CASE NO. 4:19-cv-02494-YGR 1 that it is desirable and beneficial to it that the Action be settled in the manner and upon the terms and 2 conditions set forth in this Stipulation. 1.9 3 The Settlement set forth herein intends to achieve the following: (1) entry of an order 4 approving the PAGA Settlement; (2) entry of an order approving the Class Settlement; (3) entry of 5 judgment of the Action; (4) discharge of Released Parties from liability for any and all of the PAGA 6 Claims by the PAGA Releasees; (5) discharge of Released Parties from liability for any and all of the 7 Released Claims by Plaintiff Class Members; and (6) discharge of Released Parties from liability for 8 any and all claims that Plaintiff may have against them. 9 2. DEFINITIONS 10 As used in this Agreement, the following terms shall have the meanings specified below. To 11 the extent terms or phrases used in this Agreement are not specifically defined below, but are defined 12 elsewhere in this Agreement, they are incorporated by reference into this definition section. 2.1 13 “Action” refers to the class action litigation entitled Sarah Stonehocker, on behalf of 14 herself and all others similarly situated, vs. Kindred Healthcare Operating, LLC, which is pending in 15 the United States District Court for the Northern District of California as Case No. 4:19-cv-02494- 16 YGR. 17 2.2 “Administrative Expenses” include all costs and expenses associated with and paid to 18 the Settlement Administrator for the administration of the Settlement and related matters as described 19 in this Agreement, which are anticipated not to exceed $22,500.00. 20 2.3 “Agreement,” “Settlement” and “Settlement Agreement” mean this Joint 21 Stipulation and Class and Representative Action Settlement Agreement and Release, including all 22 attached exhibits. 23 2.4 “CAFA” shall mean the Class Action Fairness Act, 28 U.S.C. § 1715 et seq. 24 2.5 “Claims” means all claims for wages and related penalties actually alleged or that could 25 have been alleged in the Action by the Plaintiff, on behalf of herself and the Class Members, based on 26 the facts alleged in the Complaint, the Amended Complaint, the proposed Second Amended 27 Complaint, and the PAGA Notice including but not limited to: (1) Failure to Pay Wages (including 28 minimum, straight, and overtime wages) [Cal. Labor Code §§ 510, 1194, 1197, 1198; Wage Order LITTLER M ENDELSON, P.C. 633 West 5th Street 63rd Floor Los Angeles, CA 90071 213.443.4300 JOINT STIPULATION AND CLASS AND REPRESENTATIVE ACTION SETTLEMENT AGREEMENT AND RELEASE 5. CASE NO. 4:19-cv-02494-YGR 1 Nos. 4 and 5; and corresponding California Code of Regulations]; (2) Failure to Pay Wages When 2 Due [Cal. Labor Code §§ 201-204]; (3) Failure to Provide Compliant Meal Breaks [Cal. Labor Code 3 § 226.7 and 512; Wage Order Nos. 4 and 5; and corresponding California Code of Regulations]; 4 (4) Failure to Authorize and Permit Compliant Rest Breaks [Cal. Labor Code § 226.7 Wage Order 5 Nos. 4 and 5; and corresponding California Code of Regulations]; (5) Failure to Issue Accurate 6 Itemized Wage Statements [Cal. Labor Code § 226]; (6) Failure to Maintain Proper Employment 7 Records [Cal. Labor Code §§ 226, 1174 and 1174.5; Wage Order Nos. 4 and 5; and corresponding 8 California Code of Regulations]; (7) Unfair Competition [Business & Professions Code § 17200]; 9 (8) Penalties Pursuant to PAGA; and (9) Failure to Pay Wages pursuant to the Fair Labor Standards 10 11 Act, 29 U.S.C. §§ 201, et seq. 2.6 “Class” and “Class Members” mean all persons who are or were employed by one or 12 more Defendants as non-exempt Skilled Clinicians to work at a skilled nursing facility in California 13 at any time from February 14, 2015 through September 1, 2020. 14 15 16 2.7 “Class Counsel” means Matthew D. Carlson of Law Office of Matthew D. Carlson, 50 Fountain Plaza, Suite 1400, #206, Buffalo, NY 14202. 2.8 “Class Counsel’s Fees and Expenses” means the amount awarded to Class Counsel 17 by the Court to compensate them for their fees in prosecuting the Action, not to exceed one-third (1/3) 18 of the Gross Settlement Fund, including any interest, plus reasonable costs and expenses not to exceed 19 $15,000, subject to approval of the Court. 20 2.9 “Class Notice” means the Notice of PAGA and Class Action Settlement, as set forth 21 in the form of Exhibit C attached hereto, or as otherwise approved by the Court, which is to be mailed 22 to Class Members and PAGA Releasees. 23 2.10 “Class Pay Periods” means the number of pay periods worked by Class Members for 24 one or more Defendants during the Settlement Period as regularly recorded on Defendants’ payroll 25 system. 26 2.11 “Class Representative” means Plaintiff Sarah Stonehocker. 27 2.12 “Class Settlement” means the non-PAGA portion of the settlement embodied in this 28 LITTLER M ENDELSON, P.C. 633 West 5th Street 63rd Floor Los Angeles, CA 90071 213.443.4300 Agreement, which is subject to Court’s preliminary and final approval. JOINT STIPULATION AND CLASS AND REPRESENTATIVE ACTION SETTLEMENT AGREEMENT AND RELEASE 6. CASE NO. 4:19-cv-02494-YGR 1 2 2.13 “Complaint” means the Class Action Complaint filed by Plaintiff in San Francisco County Superior Court on February 14, 2019. 3 2.14 “Court” means the United States District Court for the Northern District of California. 4 2.15 “Defendants” mean Kindred Healthcare Operating, LLC, Kindred Rehab Services, 5 LLC, Kindred Rehab Services, Inc., RehabCare Group East, LLC, RehabCare Group East, Inc., 6 American VitalCare, LLC and RehabCare Group of California, LLC. 7 8 9 10 11 2.16 “Defense Counsel” and “Counsel for Defendants” mean Elizabeth Staggs-Wilson, Lisa Lin Garcia, and Alice Wang of Littler Mendelson, P.C. 2.17 “Effective Date” of this Agreement means the date when all of the conditions set forth in Paragraph 7.7 have occurred. 2.18 “Employee’s Taxes and Required Withholdings” means the employee’s share of any 12 and all applicable federal, state or local payroll taxes, including those collected under authority of the 13 Federal Insurance Contributions Act (“FICA”), FUTA and/or SUTA on the portion of any Plaintiff 14 Class Member’s Individual Settlement Payment that constitutes wages. The Employee’s Taxes and 15 Required Withholdings will be withheld from and paid out of the Net Settlement Fund. 16 2.19 “Employer’s Taxes” means and refers to the employer’s share of corporate federal, 17 state and/or local payroll taxes, including Medicare taxes, Social Security taxes, federal unemployment 18 taxes, state unemployment insurance taxes, and employment training taxes, that is owed on the portion 19 of any Plaintiff Class Member’s Individual Settlement Payment that constitutes wages and any Service 20 Award that constitutes wages. The Employer’s Taxes shall be paid separate and apart from the Gross 21 Settlement Fund. 22 2.20 “Final Approval Hearing” means the hearing held to determine whether the Court 23 will enter a Final Approval Order finally approving the Class Settlement and enter a Judgment 24 dismissing the Action consistent with this Agreement. 25 26 27 28 LITTLER M ENDELSON, P.C. 633 West 5th Street 63rd Floor Los Angeles, CA 90071 213.443.4300 2.21 “Final Approval Order” means the Court’s entry of an Order finally approving and granting final approval of the Class Settlement. 2.22 “First Amended Complaint” means the First Amended Class Action Complaint filed by Plaintiff in San Francisco County Superior Court on April 1, 2019. JOINT STIPULATION AND CLASS AND REPRESENTATIVE ACTION SETTLEMENT AGREEMENT AND RELEASE 7. CASE NO. 4:19-cv-02494-YGR 1 2.23 “Gross Settlement Fund” means the agreed upon non-reversionary settlement amount 2 totaling One Million Nine Hundred Ninety-Five Thousand Dollars ($1,995,000.00) to be paid by 3 Defendants in full settlement of the Released Claims and the PAGA Claims asserted in the Action, 4 including the Administrative Expenses, Class Counsel’s Fees and Expenses, any Court approved 5 Service Award, the PAGA Payment, Employee’s Taxes and Required Withholdings, the Net 6 Settlement Fund and all other costs associated with the Settlement. 7 2.24 “Individual Settlement Payment” means the amount which is ultimately distributed 8 to each Plaintiff Class Member from the Net Settlement Fund, net of any Employee’s Taxes and 9 Required Withholdings, separate and distinct from the Plaintiff Class Member’s share of the PAGA 10 Payment. 11 2.25 “KHO” means Kindred Healthcare Operating, LLC. 12 2.26 “LWDA” means the California Labor and Workforce Development Agency. 13 2.27 “Mailing Date” means the date that the Settlement Administrator initially mails by 14 15 Regular United States Mail the Class Notices to the Class Members and the PAGA Releasees. 2.28 “Net Settlement Fund” means the portion of the Gross Settlement Fund available for 16 distribution to Plaintiff Class Members after deduction of Class Counsel's Fees and Expenses, the 17 Service Award, the Administrative Expenses, all Employees’ Taxes and Required Withholdings which 18 must be remitted on Individual Settlement Payments and the Service Award, and the PAGA Payment. 19 2.29 “Notice of Objection” means a written request by a Class Member to object to this 20 Settlement, which must be completed and filed or mailed in the manner set forth in this Settlement 21 Agreement and the Class Notices. 22 2.30 “Notice Period” means the forty-five (45) calendar day period which begins on the 23 Mailing Date. An Opt-Out Request must be returned to the Settlement Administrator with a postmark 24 dated during the Notice Period to be valid and effective. An objection must be filed with the Court 25 during the Notice Period to be considered. A written notice disputing the number of Class Pay Periods 26 and PAGA Pay Periods worked must be returned to the Settlement Administrator with a postmark 27 dated during the Notice Period for the Plaintiff Class Member to receive the Individual Settlement 28 Payment. LITTLER M ENDELSON, P.C. 633 West 5th Street 63rd Floor Los Angeles, CA 90071 213.443.4300 JOINT STIPULATION AND CLASS AND REPRESENTATIVE ACTION SETTLEMENT AGREEMENT AND RELEASE 8. CASE NO. 4:19-cv-02494-YGR 1 2 3 4 5 6 7 2.31 “PAGA” means the California Labor Code Private Attorneys General Act of 2004, California Labor Code section 2698, et seq. 2.32 “PAGA Claims” means all disputes, claims, and/or causes of action set forth in Paragraph 4.4 of this Agreement. 2.33 “PAGA Notice” means the notice Plaintiff submitted to the LWDA on or about June 15, 2020 pursuant to PAGA as described in Paragraph 1.6 above. 2.34 “PAGA Pay Periods” means the number of pay periods worked by PAGA Releasees 8 for one or more Defendants during the PAGA Settlement Period as regularly recorded on Defendants’ 9 payroll system. 10 11 12 13 14 2.35 “PAGA Payment” means the payment to the State of California LWDA and the PAGA Releasees in settlement of all claims for PAGA penalties. 2.36 “PAGA Payment Check” means the check issued to each PAGA Releasee for his/her/their share of the PAGA Payment. 2.37 “PAGA Releasees” means all persons who are or were employed by one or more 15 Defendants as non-exempt Skilled Clinicians to work at a skilled nursing facility in California at any 16 time from February 14, 2018 through September 1, 2020. 17 18 2.38 “PAGA Settlement” means the PAGA portion of this Agreement, which is subject to Court’s approval. 19 2.39 20 September 1, 2020. 21 2.40 22 “PAGA Settlement Period” means the period beginning on February 14, 2018 through “Parties” means Plaintiff, individually and on behalf of all Class Members and all PAGA Releasees, and Defendants. 23 2.41 “Plaintiff” means Sarah Stonehocker. 24 2.42 “Plaintiff Class Member” means each Class Member who has not timely and properly 25 26 opted out of the Class Settlement pursuant to Paragraph 6.5 of this Agreement. 2.43 “Preliminary Approval Order and Order Approving PAGA Settlement” means an 27 order from the Court: (1) preliminarily approving the Class Settlement; and (2) approving the PAGA 28 Settlement. LITTLER M ENDELSON, P.C. 633 West 5th Street 63rd Floor Los Angeles, CA 90071 213.443.4300 JOINT STIPULATION AND CLASS AND REPRESENTATIVE ACTION SETTLEMENT AGREEMENT AND RELEASE 9. CASE NO. 4:19-cv-02494-YGR 2.44 1 2 “Released Claims” or “Settled Claims” mean all disputes, claims, and/or causes of action set forth in Paragraph 4.3 of this Agreement. 2.45 3 “Released Parties” shall mean include Defendants, RehabCare Group Management 4 Services, LLC, RehabCare Group, Inc., RehabCare Hospital Holdings, L.L.C., and any of its or their 5 past, present and future direct or indirect parents, subsidiaries, affiliates and any skilled nursing facility 6 clients as to whom any Class Member or PAGA Releasee may have provided services through any or 7 all Defendants as well as each of its or their past, present and future officers, directors, employees, 8 partners, members, shareholders and agents, attorneys, insurers, reinsurers, and any individual or 9 entity which could be jointly liable with any or all Defendants. 2.46 10 “Second Amended Complaint” means the proposed Second Amended Class Action 11 Complaint that Plaintiff is to file in the Action as described in Paragraph 7.2 below. A copy of the 12 proposed Second Amended Complaint subject to the Court’s approval is attached hereto as Exhibit 13 B. 2.47 14 “Service Award” means any additional monetary payment provided to Sarah 15 Stonehocker in her capacity as Class Representative, not to exceed $5,000.00, for her efforts and risks 16 on behalf of the Class in the Action, as determined by the Court, as well as general consideration for 17 the general release and waiver by Plaintiff as set forth in Paragraph 4.7 of this Agreement. 2.48 18 19 “Settlement” means the settlement of the Action effectuated by this Agreement between the Parties (including the Class Settlement and PAGA Settlement). 2.49 20 “Settlement Administrator” means an experienced, neutral third-party administrator 21 that is approved by the Parties and the Court responsible for administration of the Settlement and 22 related matters. 2.50 24 25 26 27 28 LITTLER M ENDELSON, P.C. 633 West 5th Street 63rd Floor Los Angeles, CA 90071 213.443.4300 “Settlement Period” means the period from February 14, 2015, through September 1, 2.51 23 “Settlement Proceeds Distribution Deadline” means a date that is forty (40) calendar 2020. days after the Effective Date. 2.52 “Skilled Clinicians” are all individuals who have held one or more positions included in the job title list attached hereto as Exhibit A. JOINT STIPULATION AND CLASS AND REPRESENTATIVE ACTION SETTLEMENT AGREEMENT AND RELEASE 10. CASE NO. 4:19-cv-02494-YGR 1 2 3. SETTLEMENT PAYMENT PROVISIONS 3.1 Allocation of Gross Settlement Fund. Subject to Court approval and the conditions 3 specified in this Agreement, and in consideration of the mutual covenants and promises set forth 4 herein, Defendants agree to make a total settlement payment under this Agreement in the amount of 5 One Million Nine Hundred Ninety-Five Thousand Dollars ($1,995,000.00), i.e., Gross Settlement 6 Fund. The Gross Settlement Fund includes, but is not limited to, payments to be made for (1) Class 7 Counsel’s Fees and Expenses; (2) Plaintiff’s Service Award; (3) Administrative Expenses; (4) PAGA 8 Payment; (5) Employee’s Taxes and Required Withholdings; (6) and the Net Settlement Fund and all 9 other costs associated with the Settlement. The Parties agree, subject to Court approval, that the Gross 10 Settlement Fund shall be apportioned as follows: (a) 11 Attorneys’ Fees and Costs. At the Final Approval Hearing, Class Counsel will 12 apply to the Court for an award of attorneys’ fees incurred by Class Counsel in an amount not to 13 exceed Six Hundred Fifty Thousand Dollars ($665,000.00), which is one-third (1/3) of the Gross 14 Settlement Fund. At the Final Approval Hearing, Class Counsel will also apply to the Court for 15 recovery of actual costs incurred by Plaintiff’s counsel in the Action in an amount not to exceed Fifteen 16 Thousand Dollars ($15,000.00). Defendants will not oppose such applications provided that Class 17 Counsel does not seek to recover more than the maximum amounts as stated in this Paragraph. 18 Approval of the Settlement shall not be contingent upon approval of the attorneys’ fee award or the 19 costs award. 20 These fees and costs are included in, and shall come from, the Gross Settlement Fund. 21 The Class Counsel’s Fees and Expenses approved by the Court shall encompass: (a) all work 22 performed and costs and expenses incurred by, or at the direction of, any attorney purporting to 23 represent the Class and/or PAGA Releasees through the date of this Agreement; (b) all work to be 24 performed and costs to be incurred in connection with approval by the Court of the Settlement and the 25 termination of this Action; (c) all work to be performed and costs and expenses, if any, incurred in 26 connection with administering the Settlement through the termination of the Action, with prejudice; 27 and (d) may be based inter alia on the Common Fund Doctrine and/or the Catalyst Theory. 28 LITTLER M ENDELSON, P.C. 633 West 5th Street 63rd Floor Los Angeles, CA 90071 213.443.4300 Class Counsel must provide Settlement Administrator with IRS Forms W-9, so that the JOINT STIPULATION AND CLASS AND REPRESENTATIVE ACTION SETTLEMENT AGREEMENT AND RELEASE 11. CASE NO. 4:19-cv-02494-YGR 1 Settlement Administrator may issue IRS Forms 1099 misc. To the extent attorneys’ fees are not 2 approved in the full amount requested, as set forth above, then the amount not approved will be a part 3 of the Net Settlement Fund for distribution to the Plaintiff Class Members on a pro rata basis pursuant 4 to Paragraph 3.1(f). Similarly, to the extent costs sought by Class Counsel are not approved in their 5 entirety, any sum not approved will be a part of the Net Settlement Fund for distribution to the Plaintiff 6 Class Members on a pro rata basis. Except as provided in this Paragraph, upon final approval, each 7 Party shall bear her or its own attorneys’ fees, costs, and expenses incurred in the prosecution, defense, 8 and settlement of the Action. 9 (b) Service Award. At the Final Approval Hearing, Class Counsel will apply to the 10 Court for a Service Award in an amount not to exceed Five Thousand Dollars ($5,000.00) to be paid 11 to the Plaintiff for her services and for assuming the risks associated with this litigation. Defendants 12 will not oppose such application. Approval of the Settlement shall not be contingent upon approval of 13 the Service Award. 14 Any Service Award is included in, and shall come from, the Gross Settlement Fund. If the 15 Court approves and awards an Service Award in an amount less than the Five Thousand Dollars 16 ($5,000.00), as set forth above, the amount not approved will be a part of the Net Settlement Fund for 17 distribution to the Plaintiff Class Members on a pro rata basis pursuant to Paragraph 3.1(f). The Service 18 Award payable to the Plaintiff shall be in addition to any payment she may receive pursuant to 19 Paragraph 3.1(f), below. 20 (c) PAGA Payment. Subject to Court approval, an amount of One Hundred Thirty 21 Thousand Dollars ($130,000) shall be allocated as the PAGA Payment. Ninety-Seven Thousand Five 22 Hundred Dollars ($97,500.00), which is seventy-five percent (75%) of the PAGA Payment, shall be 23 paid to the LWDA. The remaining Thirty-Two Thousand Five Hundred Dollars ($32,500.00), which 24 is twenty-five percent (25%) of the PAGA Payment, shall be distributed to the PAGA Releasees, based 25 on the number of PAGA Pay Periods worked by a PAGA Releasee, as a fraction of the total PAGA 26 Pay Periods worked by all PAGA Releasees. The portion of the PAGA Payment to the PAGA 27 Releasees shall be treated entirely as penalties. PAGA Releasees will not have the opportunity to opt 28 out or object to the PAGA Payment and/or release of PAGA Claims set forth in this Agreement LITTLER M ENDELSON, P.C. 633 West 5th Street 63rd Floor Los Angeles, CA 90071 213.443.4300 JOINT STIPULATION AND CLASS AND REPRESENTATIVE ACTION SETTLEMENT AGREEMENT AND RELEASE 12. CASE NO. 4:19-cv-02494-YGR 1 although the PAGA Settlement will be subject to Court approval. In the event the LWDA rejects this 2 allocation, the Parties will meet and confer with the Court and the LWDA to reach a penalty allocation 3 acceptable to all parties that does not materially alter the terms of Settlement, nor require Defendants 4 to pay more than the Gross Settlement Fund. At the same time that Plaintiff files her Motion for 5 Preliminary Approval, Plaintiff shall send a copy of the Agreement to the LWDA pursuant to the 2016 6 amendments to PAGA. The PAGA Payment shall be paid from the Gross Settlement Fund. 7 (d) Administrative Expenses. Subject to Court approval, an amount of Twenty- 8 Two Thousand Five Hundred Dollars ($22,500) will be set aside from the Gross Settlement Fund to 9 cover any of the Settlement Administrator’s Administrative Expenses. The Parties agree to propose 10 Simpluris, Inc. as the Settlement Administrator. If any portion of the Twenty-Two Thousand Five 11 Hundred Dollars ($22,500) remains unused, it will go to the Net Settlement Fund. 12 (e) Employer’s Taxes. The Settlement Administrator shall calculate the 13 Employer’s Taxes and inform Defendants of the amount of Employer’s Taxes to be paid by 14 Defendants separate and apart from the Gross Settlement Fund. 15 (f) Net Settlement Fund. After deducting the amounts specified in Paragraphs 16 3.1(a)-(d), above, each Plaintiff Class Member shall be entitled to a pro rata portion of the remaining 17 amount of the Gross Settlement Fund, which is known as the Net Settlement Fund. Individual 18 Settlement Payments shall be awarded to each Plaintiff Class Member from the Net Settlement Fund 19 based on the number of Class Pay Periods worked by the Plaintiff Class Member, as a fraction of the 20 total Class Pay Periods worked by all Plaintiff Class Members. 21 The Parties acknowledge and agree that the formula used to calculate Individual 22 Settlement Payments does not imply that all of the elements of damages alleged in the Action are not 23 being taken into account. The above formula was devised as a practical and logistical tool to simplify 24 the settlement process. 25 The Parties agree that the entire amount of the Net Settlement Fund, less applicable 26 Employee’s Taxes and Required Withholdings, shall be distributed to Plaintiff Class Members. Any 27 Class Member who is not a Plaintiff Class Member shall not receive an Individual Settlement Payment 28 but if he/she is a PAGA Releasee, such individual will still receive his/her PAGA Payment Check. LITTLER M ENDELSON, P.C. 633 West 5th Street 63rd Floor Los Angeles, CA 90071 213.443.4300 JOINT STIPULATION AND CLASS AND REPRESENTATIVE ACTION SETTLEMENT AGREEMENT AND RELEASE 13. CASE NO. 4:19-cv-02494-YGR 1 3.2 Taxation of Settlement Proceeds. All Individual Settlement Payments paid to Plaintiff 2 Class Members and any Service Award to Plaintiff shall be paid in a net amount after applicable state 3 and federal withholdings, including payroll taxes, have been deducted. 4 (a) The Parties agree that twenty percent (20%) of the Individual Settlement 5 Payment distributed to each Plaintiff Class Member will be considered wages, and will be, if required, 6 reported as such to each Plaintiff Class Member on an IRS Form W-2. The Parties agree that the 7 remaining eighty percent (80%) of the Individual Settlement Payment distributed to each Plaintiff 8 Class Member will be considered civil penalties and interest, and will be, if required, reported as such 9 to each Plaintiff Class Member on an IRS Form 1099 misc., if applicable. The foregoing tax allocation 10 shall apply to sums paid to Plaintiff described in Paragraph 3.1(b). The Parties further agree that the 11 PAGA Payment Checks distributed to each PAGA Releasee will be treated entirely as civil penalties, 12 and will be reported as such to each PAGA Releasee on an IRS Form 1099 misc., if applicable. 13 (b) The Settlement Administrator shall calculate, withhold from each Individual 14 Settlement Payment and the Service Award, and remit to applicable governmental agencies sufficient 15 amounts as may be owed by the Plaintiff Class Members and Plaintiff for applicable employee taxes. 16 The Settlement Administrator will issue appropriate tax forms to each Plaintiff Class Member and 17 PAGA Releasee consistent with the foregoing breakdown. 18 (c) The Parties agree that the Gross Settlement Fund will qualify as a settlement 19 fund pursuant to the requirements of section 468(B)(g) of the Internal Revenue Code of 1986, as 20 amended, and section 1.468B-1. et seq. of the income tax regulations. Furthermore, the Settlement 21 Administrator is hereby designated as the “Administrator” of the qualified settlement funds for 22 purposes of section 1.46B-2(k) of the income tax regulations. As such, all taxes imposed on the gross 23 income of the Gross Settlement Fund and any tax-related expenses arising from any income tax return 24 or other reporting document that may be required by the Internal Revenue Service or any state or local 25 taxing body will be paid from the Gross Settlement Fund. 26 (d) All Parties represent that they have not received, and shall not rely on, advice 27 or representations from the other Party or her/its agents regarding the tax treatment of payments under 28 federal, state or local law. LITTLER M ENDELSON, P.C. 633 West 5th Street 63rd Floor Los Angeles, CA 90071 213.443.4300 JOINT STIPULATION AND CLASS AND REPRESENTATIVE ACTION SETTLEMENT AGREEMENT AND RELEASE 14. CASE NO. 4:19-cv-02494-YGR 3.3 1 No Credit Towards Benefit Plans. Except as otherwise required by applicable plan 2 documents, the Individual Settlement Payments, Service Award and PAGA Payment Checks made to 3 Plaintiff, Plaintiff Class Members and PAGA Releasees under this Agreement shall not be utilized to 4 calculate any additional benefits under any benefit plans to which any Plaintiff, Plaintiff Class 5 Members and PAGA Releasees may be eligible including, but not limited to: retirement plans, profit- 6 sharing plans, bonus plans, 401(k) plans, stock purchase plans, vacation plans, sick leave plans, PTO 7 plans, pension plans, or any other benefit plan. It is the Parties’ intention that this Agreement will not 8 affect any rights, contributions, or amounts to which Plaintiff, Plaintiff Class Members and PAGA 9 Releasees may be entitled under any benefit plans. 10 11 4. RELEASE PROVISIONS 4.1 Non-Admission of Liability. The Parties enter into this Agreement to resolve the 12 dispute that has arisen between them and to avoid the burden, expense and risk of continued litigation. 13 In entering into this Agreement, Defendants do not admit, and specifically denies, that it has violated 14 any federal, state, or local law; violated any regulations or guidelines promulgated pursuant to any 15 statute or any other applicable laws, regulations or legal requirements; breached any contract, violated 16 or breached any duty; engaged in any misrepresentation or deception; or engaged in any other unlawful 17 conduct with respect to the Plaintiff or any Class Member and/or PAGA Releasee. Neither this 18 Agreement, nor any of its terms or provisions, nor any of the negotiations connected with it, shall be 19 construed as an admission or concession by Defendants of any such violations or failures to comply 20 with any applicable law. Except as necessary in a proceeding to enforce the terms of this Agreement, 21 this Agreement and its terms and provisions shall not be offered or received as evidence in any action 22 or proceeding to establish any liability or admission on the part of Defendants or to establish the 23 existence of any condition constituting a violation of, or a non-compliance with, federal, state, local 24 or other applicable law. 25 4.2 Dismissal of Claims. Subject to final Court approval and the conditions specified in 26 this Agreement, and in consideration of the mutual covenants and promises set forth herein, Plaintiff 27 and all Plaintiff Class Members shall dismiss with prejudice all Released Claims, to the greatest extent 28 LITTLER M ENDELSON, P.C. 633 West 5th Street 63rd Floor Los Angeles, CA 90071 213.443.4300 JOINT STIPULATION AND CLASS AND REPRESENTATIVE ACTION SETTLEMENT AGREEMENT AND RELEASE 15. CASE NO. 4:19-cv-02494-YGR 1 permitted by law, and Plaintiff and all PAGA Releasees shall dismiss with prejudice the PAGA Claims 2 to the greatest extent permitted by law. 3 4.3 Release of All Settled Claims. Upon the entry of the Final Approval Order and to the 4 maximum extent permitted by law, Plaintiff and all Plaintiff Class Members (i.e., all Class Members 5 who do not properly opt-out) and all persons purporting to act on the Plaintiff Class Members’ behalf 6 or purporting to assert a claim under or through them, hereby do and shall be deemed to have fully, 7 finally, and forever released, settled, compromised, relinquished, and discharged any and all of the 8 Released Parties of and from all disputes, claims and/or causes of action pleaded or which could have 9 been pleaded arising, in whole or in part, from the facts, claims and/or allegations contained in the 10 Complaint, the First Amended Complaint, the Second Amended Complaint, and/or the PAGA Notice 11 during the Settlement Period, including the following: 12 (a) Any claims for unpaid wages (including minimum, regular and overtime 13 wages), untimely wage payments both during and at the end of employment, non-compliant meal 14 periods, non-compliant rest periods, non-compliant wage statements, non-compliant recordkeeping, 15 and claims for interest, penalties (including but not limited to waiting time penalties), or premiums in 16 connection therewith, as well as any claims under the Fair Labor Standards Act, the California Labor 17 Code, California Industrial Welfare Commission Wage Orders and corresponding California Code of 18 Regulations, alleged or which could have been alleged based, in whole or in part, on the facts, 19 allegations and/or claims pleaded in the Complaint, the First Amended Complaint or the Second 20 Amended Complaint in this Action or the PAGA Notice; 21 (b) Any claims for injunctive relief, declaratory relief, restitution, fraudulent 22 business practices or punitive damages alleged or which could have been alleged based, in whole or 23 in part, on the facts, allegations and/or claims pleaded in the Complaint, the First Amended Complaint 24 or the Second Amended Complaint in this Action or the PAGA Notice; and 25 (c) Any and all other claims under California common law, the California Labor 26 Code including but not limited to the Private Attorneys General Act, the Fair Labor Standards Act, 27 California Industrial Welfare Commission Wage Orders, corresponding California Code of 28 Regulations, and the California Business and Professions Code alleged in or that could have been LITTLER M ENDELSON, P.C. 633 West 5th Street 63rd Floor Los Angeles, CA 90071 213.443.4300 JOINT STIPULATION AND CLASS AND REPRESENTATIVE ACTION SETTLEMENT AGREEMENT AND RELEASE 16. CASE NO. 4:19-cv-02494-YGR 1 alleged under the allegations and/or claims pleaded in Complaint, the First Amended Complaint or the 2 Second Amended Complaint in this Action or the PAGA Notice. (d) 3 The claims set forth in Paragraph 4.3 shall be collectively referred to as the 4 “Released Claims” or “Settled Claims.” The Plaintiff Class Members are bound by the release of 5 the Settled Claims in their entirety regardless of whether they cash their Individual Settlement Payment 6 check. 7 4.4 Release of PAGA Claims. Upon the Court’s approval of the PAGA Payment and this 8 release of PAGA Claims, Plaintiff and the PAGA Releasees and all persons purporting to act on the 9 PAGA Releasees’ behalf or purporting to assert a claim under or through them, hereby do and shall 10 be deemed to have fully, finally, and forever released, settled, compromised, relinquished and 11 discharged any and all of the Released Parties of and from any and all PAGA claims premised in whole 12 or in part on any of the claims set forth in Paragraph 4.3 above during the PAGA Settlement Period 13 (collectively, the “PAGA Claims”). The PAGA Releasees will not have the opportunity to opt out 14 of, or object to, the PAGA Payment and release of the PAGA Claims set forth in this Paragraph. The 15 PAGA Releasees are bound by the release of the PAGA Claims regardless of whether they cash their 16 PAGA Payment Check. 17 4.5 Communication to the Class. The Parties agree for settlement purposes only that, 18 because the Class Members are so numerous, it is impossible or impracticable to have each Class 19 Member execute this Agreement. Accordingly, the Class Notice will advise all Class Members of the 20 binding nature of the release of claims and such notice shall have the same force and effect as if the 21 Agreement were executed by each Class Member. 22 4.6 Representation by Plaintiff. Plaintiff and Class Counsel represent, covenant, and 23 warrant that they have not directly or indirectly assigned, transferred, encumbered or purported to 24 assign, transfer, or encumber to any person or entity any portion of any liability, claim, demand, action, 25 cause of action, or rights herein released and discharged, except as set forth herein. 26 4.7 General Release and Waiver of California Civil Code § 1542 by Plaintiff. Upon the 27 Court’s final approval of the Class Settlement and entry of the Judgment, Plaintiff and all persons 28 purporting to act on Plaintiff’s behalf or purporting to assert a claim under or through Plaintiff, hereby LITTLER M ENDELSON, P.C. 633 West 5th Street 63rd Floor Los Angeles, CA 90071 213.443.4300 JOINT STIPULATION AND CLASS AND REPRESENTATIVE ACTION SETTLEMENT AGREEMENT AND RELEASE 17. CASE NO. 4:19-cv-02494-YGR 1 do and shall be deemed to have fully, finally, and forever released, settled, compromised, relinquished, 2 and discharged any and all of the Released Parties from any and all claims, known or unknown, 3 asserted and unasserted, that she has or may have had against any or all Defendants or any of the 4 Released Parties from the beginning of time through the date Plaintiff this Agreement. Such claims 5 include, but are not limited to the Released Claims; the PAGA Claims; breaches of contract, whether 6 written, oral or implied; violations of any public policy; tort claims, including but not limited to 7 intentional infliction of emotional distress and negligent infliction of emotional distress, defamation, 8 misrepresentation, and fraud; retaliation claims; common law claims; any other claims for damages, 9 costs, fees, or other expenses, including attorneys’ fees; and any violations of the following statutes, 10 laws, and regulations and amendments thereto: Title VII of the Civil Rights Act of 1964; the Civil 11 Rights Act of 1991; Sections 1981 through 1988 of Title 42 of the United States Code; the Americans 12 with Disabilities Act of 1990; the Employment Retirement Income Security Act of 1974; the 13 Occupational Safety and Health Act; the Sarbanes-Oxley Act of 2002; the Family and Medical Leave 14 Act of 1993; the Fair Labor Standards Act; the California Fair Employment and Housing Act – 15 California Government Code § 12900 et seq.; the California Family Rights Act – California 16 Government Code § 12945.2 et seq.; the California Unruh Civil Rights Act – California Civil Code 17 § 51 et seq.; the California Whistleblower Protection Law – California Labor Code § 1102.5; the 18 California Occupational Safety and Health Act – California Labor Code § 6300 et seq.; the California 19 Private Attorneys General Act – California Labor Code § 2698 et seq.; the California Business and 20 Professions, Civil, Government and Labor Code; and any other federal, state, or local civil 21 employment law, statute, regulation, or ordinance capable of being released by Plaintiff, excluding 22 any claims that cannot be released as a matter of law. Plaintiff shall be deemed to have, and by 23 operation of the Final Approval Order shall have, expressly waived and relinquished to the fullest 24 extent permitted by law the provisions, rights, and benefits of Section 1542 of the California Civil 25 Code, or any other similar provision under federal or state law that purports to limit the scope of a 26 general release. Plaintiff, for herself, has read Section 1542 of the California Civil Code, which 27 provides as follows: 28 LITTLER M ENDELSON, P.C. 633 West 5th Street 63rd Floor Los Angeles, CA 90071 213.443.4300 A general release does not extend to claims that the creditor or releasing party does not JOINT STIPULATION AND CLASS AND REPRESENTATIVE ACTION SETTLEMENT AGREEMENT AND RELEASE 18. CASE NO. 4:19-cv-02494-YGR 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 know or suspect to exist in his or her favor at the time of executing the release and that, if known by him or her, would have materially affected his or her settlement with the debtor or released party. Plaintiff understands that Section 1542 gives the right not to release existing claims of which she is not now aware, unless Plaintiff voluntarily chooses to waive this right. Having been so apprised, Plaintiff nevertheless voluntarily waives the rights described in Section 1542, and elects to assume all risks for claims that now exist in her favor, known or unknown. The release of the claims of Plaintiff as set forth in this Paragraph 4.7 is a condition precedent to enforcement of this Agreement. 4.8 No Pending or Future Lawsuits by Plaintiff. Other than this Action, Plaintiff represents that she does not have any pending lawsuits, administrative complaints or charges against Defendants or the Released Parties in any local, state or federal court or administrative agency. Plaintiff further acknowledges that all claims raised therein, if any, shall be fully and finally extinguished by virtue of this Settlement Agreement and the Court’s Final Approval Order. Plaintiff further represents that she will not bring any action in the future in which she seeks to recover any damages from Defendants or the Released Parties relating to or arising from Plaintiff’s employment, other than an action to enforce her rights under this Settlement Agreement. 4.9 Release of Claims by Class Counsel. Upon receipt of Class Counsel's Fees and Expenses, as ordered by the Court on final approval of the Settlement, Class Counsel shall fully and finally release Defendants and the Released Parties from any and all claims for attorneys' fees and expenses arising from the Action and any claims released by the Plaintiff, Class Members and PAGA Releasees, whether known and unknown, whether under federal, state and/or local law, statute, ordinance, regulation, common law, or other source of law. Class Counsel's Released Claims and PAGA Claims include, but are not limited to, claims for attorneys' fees and expenses arising from or dependent on the California Civil Code, the California Code of Civil Procedure, the California Labor Code; the wage orders of the California Industrial Welfare Commission; corresponding California Code of Regulations; California Business and Professions Code sections 17200, et seq.; California Labor Code sections 2698, et seq.; the California common law of contract and tort, and the Fair Labor Standards Act. 28 LITTLER M ENDELSON, P.C. 633 West 5th Street 63rd Floor Los Angeles, CA 90071 213.443.4300 JOINT STIPULATION AND CLASS AND REPRESENTATIVE ACTION SETTLEMENT AGREEMENT AND RELEASE 19. CASE NO. 4:19-cv-02494-YGR 4.10 1 Labor Code Sections Do Not Apply To Releases. The Parties agree that California 2 Labor Code section 206.5 and 2804 do not invalidate any provision of this Agreement, because among 3 other things, the claims and Released Claims and PAGA Claims are disputed and contested, and the 4 Settlement was bargained for at arms' length and approved by the Court. 5 5. 6 CONDITIONAL CLASS CERTIFICATION AND CLASS COUNSEL 5.1 Class Certification. Solely for the purposes of this Settlement, the Parties stipulate and 7 agree that in order for this Settlement to occur, the Court must certify the following class as defined 8 in Paragraph 2.6: all persons who are or were employed by one or more Defendants as non-exempt 9 Skilled Clinicians (as defined in Paragraph 2.52) to work at a skilled nursing facility in California at 10 any time from February 14, 2015 through September 1, 2020. (a) 11 For settlement purposes only, the Parties agree that the Class as defined in 12 Paragraph 2.6 herein and which will run through September 1, 2020, may be certified in the Action 13 pursuant to Federal Rule of Civil Procedure 23. The Parties are not certifying any PAGA claims. In 14 support of this Agreement, Plaintiff will request that the Court certify for settlement purposes the Class 15 as to all non-PAGA claims that have been asserted, which Defendants shall not oppose or object to. 16 5.2 The Parties intend the Class Settlement to be contingent upon the preliminary and final 17 approval of each and every term of this Agreement, without material or substantive modification, 18 unless the Parties agree to such modification. Except as expressly set forth in this Agreement, if the 19 Court does not so approve this Agreement, the Parties intend this Agreement to become null and void, 20 and unenforceable, in which event the settlement terms set forth herein, including any modifications 21 made with the consent of the Parties, and any action taken or to be taken in connection with this 22 Agreement shall be terminated and shall become null and void and have no further force or effect, and 23 the Class certified pursuant to this Agreement will be decertified for all purposes. 24 5.3 In the event that the Court does not grant approval of the PAGA Settlement, preliminary 25 or final approval of the Class Settlement, or in the event that this Agreement shall terminate or the 26 Settlement embodied herein does not become effective for any reason, the Agreement and all 27 negotiations, court orders and proceedings relating thereto shall be without prejudice to the rights of 28 Plaintiff, Class Members, PAGA Releasees and Defendants, stricken from the record, each of whom LITTLER M ENDELSON, P.C. 633 West 5th Street 63rd Floor Los Angeles, CA 90071 213.443.4300 JOINT STIPULATION AND CLASS AND REPRESENTATIVE ACTION SETTLEMENT AGREEMENT AND RELEASE 20. CASE NO. 4:19-cv-02494-YGR 1 shall be restored to her/their/its respective positions existing prior to the execution of this Agreement, 2 and evidence relating to the Agreement and all negotiations shall not be discoverable or admissible in 3 the Action or any other litigation. Defendants do not waive, and instead expressly reserve, their rights 4 to challenge the propriety of class certification for any purpose should the Court not grant preliminary 5 or final approval of the Parties' Settlement. 5.4 6 If the Court grants approval of the PAGA Settlement and preliminary approval of the 7 Class Settlement but does not grant final approval of the Class Settlement, then the Preliminary 8 Approval Order shall be vacated in its entirety. In addition, this Agreement, the Preliminary Approval 9 Order, and any other document in any way relating to the Agreement or Settlement shall be stricken 10 from the record and may not be relied upon, referred to or used in any way for any purpose in 11 connection with any further proceedings in this or any related action, including class certification 12 proceedings. Defendants do not waive, and instead expressly reserve, their rights to challenge the 13 propriety of class certification for any purpose should the Court not grant final approval of the Class 14 Settlement. 15 5.5 Appointment of Class Representative. Solely for the purposes of this Settlement, the 16 Parties stipulate and agree that Plaintiff Sarah Stonehocker shall be appointed as a representative for 17 the Class. 5.6 18 Appointment of Class Counsel. Solely for the purposes of this Settlement, the Parties 19 stipulate and agree that Matthew D. Carlson of the Law Office of Matthew D. Carlson shall be 20 appointed as Class Counsel for the Class. 21 6. 22 NOTICE AND SETTLEMENT ADMINISTRATION PROCESS 6.1 Identification of Class Members and PAGA Releasees. Within thirty (30) days after 23 entry of the Preliminary Approval Order and Order Approving PAGA Settlement, Defendants shall 24 provide to the Settlement Administrator a list of PAGA Releasees and Class Members that includes: 25 (1) the names, last known addresses, last known personal telephone numbers (if known), and social 26 security numbers of each Class Member/PAGA Releasee; (2) the total number of Class Pay Periods 27 worked by each Class Member and the total number of PAGA Pay Periods worked by each PAGA 28 Releasee; and (3) such other information that the Settlement Administrator requires to identify Class LITTLER M ENDELSON, P.C. 633 West 5th Street 63rd Floor Los Angeles, CA 90071 213.443.4300 JOINT STIPULATION AND CLASS AND REPRESENTATIVE ACTION SETTLEMENT AGREEMENT AND RELEASE 21. CASE NO. 4:19-cv-02494-YGR 1 Members and PAGA Releasees. 2 reasonably acceptable to the Settlement Administrator. The Settlement Administrator will keep the 3 list confidential, use it only for the purposes described herein, and return it to Defendants upon 4 completion of the settlement administration process. The Settlement Administrator shall not share the 5 list with Plaintiff, Class Counsel, or any other person without Defendants’ written approval. 6 6.2 Defendants agree to provide the list in an electronic format Individual Settlement Payment Calculation. Based on the information in the Class 7 Member/PAGA Releasee list and the formula set forth in Paragraphs 3.1(c) and 3.1(f) above, the 8 Settlement Administrator shall promptly calculate the estimated PAGA Settlement Check for every 9 PAGA Releasee and the estimated Individual Settlement Payment for every Class Member, to be 10 included in the individualized Class Notice to be sent to that Class Member and/or PAGA Releasee, 11 and shall prepare and e-mail a spreadsheet setting forth those calculations to Defense Counsel no fewer 12 than five (5) days before mailing the Class Notice to Class Members and PAGA Releasees. The Class 13 Notice will inform each Class Member and/or PAGA Releasee of his/her right to opt out of the non- 14 PAGA payment and release of non-PAGA claims or to object to the non-PAGA payment and release 15 of non-PAGA claims. It will also inform Class Members that if they first request exclusion from, and 16 opt out of, the Class Settlement and then object, the objections would not be considered valid and that 17 if the Class Members object and then request exclusion from, and opt out of the Class Settlement, the 18 Class Members would be deemed to have waived their objection. 19 6.3 Notice Procedure. Within fifteen (15) days after receipt of the list of Class 20 Members/PAGA Releasees described in Paragraph 6.1 above, the Settlement Administrator shall mail 21 the Class Notices to each Class Member/PAGA Releasee whose address information is known. Prior 22 to this mailing, the Settlement Administrator shall conduct a National Change of Address check as to 23 each address. The mailing shall be sent by first-class U.S. Mail, postage pre-paid. The date that the 24 Settlement Administrator mails the Class Notices is the Mailing Date. It shall be conclusively 25 presumed that each and every Class Member/PAGA Releasee whose Class Notice are not returned to 26 the Settlement Administrator as undeliverable within thirty (30) calendar days after the Mailing Date 27 has received the Class Notices. 28 LITTLER M ENDELSON, P.C. 633 West 5th Street 63rd Floor Los Angeles, CA 90071 213.443.4300 JOINT STIPULATION AND CLASS AND REPRESENTATIVE ACTION SETTLEMENT AGREEMENT AND RELEASE 22. CASE NO. 4:19-cv-02494-YGR 1 (a) The Settlement Administrator shall promptly re-mail any Class Notice returned 2 by the Post Office with a forwarding address. It shall be conclusively presumed that those Class 3 Members/PAGA Releasees whose re-mailed Class Notice are not returned to the Settlement 4 Administrator as undeliverable within thirty (30) days after re-mailing has received the Class Notice. 5 (b) The Settlement Administrator shall conduct one additional address 6 search/check via an appropriate skip tracing search for any Class Notice returned by the Post Office 7 as “undeliverable.” If an updated address is found, the Settlement Administrator shall promptly re- 8 mail the Class Notice to that address one time. 9 (c) Class Counsel shall provide to the Court, at or before the Final Approval 10 Hearing, a declaration from the Settlement Administrator confirming that the Class Notices were 11 mailed to all Class Members/PAGA Releasees as required by this Agreement, as well as any additional 12 information Class Counsel and Defense Counsel both deem appropriate to provide to the Court. 13 (d) The Class Notice shall state the formula to be used in calculating Individual 14 Settlement Payments and PAGA Payment Checks as calculated by the Settlement Administrator. A 15 Plaintiff Class Member and/or PAGA Releasee may seek to challenge his or her estimated Individual 16 Settlement Payment and PAGA Payment Check amount set forth in his or her Class Notice. Such 17 challenges must: (i) be in writing; (ii) state the full name of the Class Member/PAGA Releasee seeking 18 the challenge; (iii) include a statement that the Class Member/PAGA Releasee is seeking to challenge 19 his or her estimated Individual Settlement Payment and/or PAGA Payment Check set forth in the Class 20 Notice; (iv) state the number of Class Pay Periods and/or PAGA Pay Periods that the Class 21 Member/PAGA Releasee believes he or she has worked; (v) include documentation to support the 22 challenge; (vi) signed by the Class Member/PAGA Releasee seeking the challenge; and (vii) mailed 23 to the Settlement Administrator with a postmark date on or before the expiration of the Notice Period. 24 A Plaintiff Class Member and/or PAGA Releasee challenging his or her Individual Settlement 25 Payment amount and/or PAGA Payment Check amount must produce documentary evidence to the 26 Settlement Administrator for consideration and/or challenge. The Settlement Administrator will 27 resolve the challenge with input from Class Counsel and Defense Counsel and make a final and 28 binding determination without hearing or right of appeal. The personnel records, including payroll LITTLER M ENDELSON, P.C. 633 West 5th Street 63rd Floor Los Angeles, CA 90071 213.443.4300 JOINT STIPULATION AND CLASS AND REPRESENTATIVE ACTION SETTLEMENT AGREEMENT AND RELEASE 23. CASE NO. 4:19-cv-02494-YGR 1 records, of Defendants shall be considered by the Settlement Administrator as the presumptive best 2 evidence of the number of Class Pay Periods and PAGA Pay Periods worked. (e) 3 The Class Notice shall explain that if a Class Member does not opt out of the 4 Class Settlement, such Class Member will receive the Individual Settlement Payment pursuant to the 5 terms of this Agreement. The Parties intend that reasonable means be used to maximize the probability 6 that all Class Members shall receive the Class Notice. (f) 7 Within ten (10) days after the close of the Notice Period, the Settlement 8 Administrator will provide Defense Counsel with a report by name and last four digits of Social 9 Security Number listing the amount of all Individual Settlement Payments to be made to the Plaintiff 10 Class Members, the amount of all PAGA Payment Checks to be made to the PAGA Releasees, a list 11 by name of all Class Members who timely opted out under Paragraph 6.5, below, and a list by name 12 of all Plaintiff Class Members who timely objected under Paragraph 6.7 below. Within that same time 13 period, the Settlement Administrator will provide to Class Counsel a report stating the total number 14 of Plaintiff Class Members, the total number of Class Members who timely opted out under Paragraph 15 6.5, below and the total number of Plaintiff Class Members who timely objected under Paragraph 6.7 16 below. 17 18 19 6.4 Class Settlement Payment. Any Class Member who wishes to become a Plaintiff Class Member and receive an Individual Settlement Payment must not opt out of the Class. 6.5 Opt-Out Procedure. Any Class Member who wishes to be excluded from the Class 20 Settlement may seek exclusion under this Paragraph. However, no PAGA Releasee can seek exclusion 21 from the PAGA portion of the settlement. Unless a Class Member timely and properly opts out of the 22 Class Settlement described in this Agreement, he/she/they shall be a Plaintiff Class Member and shall 23 be bound by all the terms and conditions of this Agreement, and shall also be bound by the Court's 24 Order enjoining all Plaintiff Class Members from pursuing, or seeking to reopen, any of the Settled 25 Claims against the Released Parties. A Class Member will not be entitled to opt out of the Class 26 Settlement established by this Agreement unless he or she submits a timely Opt-Out Request as 27 provided in this Paragraph. An Opt-Out Request must be: (i) made in writing; (ii) state the full name 28 of the Class Member seeking exclusion; (iii) include a statement that the Class Member seeking LITTLER M ENDELSON, P.C. 633 West 5th Street 63rd Floor Los Angeles, CA 90071 213.443.4300 JOINT STIPULATION AND CLASS AND REPRESENTATIVE ACTION SETTLEMENT AGREEMENT AND RELEASE 24. CASE NO. 4:19-cv-02494-YGR 1 exclusion from the Settlement requests exclusion from the Class and does not wish to participate in 2 the Class Settlement; (iv) signed by the Class Member seeking exclusion from the Settlement; and (v) 3 mailed to the Settlement Administrator with a postmark date on or before the expiration of the Notice 4 Period. 5 The Opt-Out Request must be completed by the Class Member seeking exclusion from the 6 Class Settlement. Any Class Member who properly submits a timely, complete and valid Opt-Out 7 Request using this procedure will not be entitled to an Individual Settlement Payment and will not be 8 bound by the Settlement or have any right to object, appeal or comment thereon, except that a Class 9 Member that is also a PAGA Releasee will be bound by the release of PAGA Claims set forth in this 10 11 12 Agreement and will be issued the PAGA Releasee’s PAGA Payment Check. PAGA Releasees will not have the opportunity to opt out or object to the PAGA Payment and/or release of PAGA Claims although the PAGA Settlement will be subject to Court approval. (a) 13 Upon receipt of any Opt-Out Request within the Notice Period, the Settlement 14 Administrator shall review the request to verify the information contained therein, and to confirm that 15 the request complies with the requirements of this Agreement. (b) 16 Any Class Member who fails to submit a timely, complete and valid Opt-Out 17 Request shall be barred from opting out of this Agreement or the Settlement. The Settlement 18 Administrator shall not review or consider any Opt-Out Request postmarked after the end of the Notice 19 Period. It shall be conclusively presumed that, if an Opt-Out Request is not postmarked on or before 20 the end of the Notice Period, or is not received by the Settlement Administrator, the Class Member 21 did not make the request in a timely or valid manner. Under no circumstances shall the Settlement 22 Administrator have the authority to extend the deadline for Class Members to submit an Opt-Out 23 Request. (c) 24 25 26 The Settlement Administrator shall give Class Counsel and Defense Counsel a weekly update on the number of Opt-Out Requests it receives that week. 6.6 Excessive Opt-Out Requests. If twenty (20) or more Class Members timely opt out of 27 the Class Settlement, Defendants shall have the sole and absolute discretion to rescind/void the 28 Settlement within twenty (20) days after receiving from the Settlement Administrator the final list of LITTLER M ENDELSON, P.C. 633 West 5th Street 63rd Floor Los Angeles, CA 90071 213.443.4300 JOINT STIPULATION AND CLASS AND REPRESENTATIVE ACTION SETTLEMENT AGREEMENT AND RELEASE 25. CASE NO. 4:19-cv-02494-YGR 1 opt-outs. In the event that Defendants elect to rescind/void the Settlement Agreement, Defendants 2 shall provide written notice of such rescission to Class Counsel. Such rescission shall have the same 3 effect as a termination of the Settlement Agreement for failure to satisfy a condition of settlement, and 4 the Settlement Agreement shall become null and void and have no further force or effect, and the 5 Settlement Class certified pursuant to the Settlement Agreement will be decertified for all purposes. 6 If Defendants choose to terminate the Settlement Agreement under this provision, it shall be 7 responsible to pay the Settlement Administrator's fees and costs incurred to that point. 8 6.7 Objections to Class Settlement. Any Plaintiff Class Member may object to the Class 9 Settlement. Plaintiff Class Members who wish to object must send their written objections to the Court 10 only by the close of the Notice Period. All objections will be scanned into the electronic case docket 11 and the Parties will receive electronic notices of filing. An objection must state the specific grounds 12 on which it is being made and all supporting facts. The Class Notice will state in substance: 13 14 15 16 17 18 19 20 21 22 23 24 Any member of the Class who has not opted out can ask the Court to deny approval of the settlement by filing an objection. You can’t ask the Court to order a larger settlement; the Court can only approve or deny the settlement. If the Court denies approval, no settlement payments will be sent out and the lawsuit will continue. If that is what you want to happen, you must object. You may object to the proposed settlement in writing, except you may not object to the PAGA Payment and release of PAGA Claims. You may also appear at the Final Approval Hearing, either in person or through your attorney. If you appear through your own attorney, you are responsible for paying that attorney. All written objections and supporting papers must (a) clearly identify the case and number (Stonehocker v. Kindred Healthcare Operating, LLC, Case No. 4:19cv-02494-YGR), (b) be submitted to the Court either by mailing them to the Class Action Clerk, United States District Court for the Northern District of California, 1301 Clay Street, Suite 400 S, Oakland, CA 94612, or by filing them in person at any location of the United States District Court for the Northern District of California, and (c) be filed or postmarked on or before [insert date of the close of the Notice Period]. Class Members who fail to timely mail or file such a written statement of objection shall be foreclosed from making any objection to this Settlement. 25 Class Members who fail to timely file and serve such a written statement of objection shall be 26 foreclosed from making any objection to this Settlement. Only Plaintiff Class Members may object to 27 the Class Settlement. If an objector intends to appear at the Final Approval Hearing, either in person 28 or through an attorney of his/her choice, he or she must also serve and file with his or her objection, a LITTLER M ENDELSON, P.C. 633 West 5th Street 63rd Floor Los Angeles, CA 90071 213.443.4300 JOINT STIPULATION AND CLASS AND REPRESENTATIVE ACTION SETTLEMENT AGREEMENT AND RELEASE 26. CASE NO. 4:19-cv-02494-YGR 1 Notice of Intention to Appear. This Paragraph shall be strictly applied and enforced. Failure to comply 2 with its terms shall render an objection ineffective and waived. 3 6.8 Funding and Distribution of Settlement. Within twenty (20) calendar days after the 4 Effective Date, Defendants shall transfer to the Settlement Administrator an amount equal to the Gross 5 Settlement Fund plus its share of the Employer’s Taxes. The delivery of the Gross Settlement Fund to 6 the Settlement Administrator plus Defendants’ share of Employer’s Taxes shall constitute full and 7 complete discharge of the entire obligation of Defendants under this Agreement. Once Defendants 8 have made such payments, they will be deemed to have satisfied all terms and conditions under this 9 Agreement, shall be entitled to all protections afforded to Defendants under this Agreement, and shall 10 have no further obligations under the terms of the Agreement regardless of what occurs with respect 11 to those sums. Additionally, no Released Party shall have any further obligation or liability to the 12 Plaintiff, PAGA Releases, or Class Members under this Agreement. 13 (a) The distribution of the PAGA Payments to the LWDA and PAGA Releasees 14 and Individual Settlement Payments to Plaintiff Class Members shall occur on the Settlement Proceeds 15 Distribution Deadline. The Settlement Administrator shall be deemed to have timely distributed all 16 such payments if it places in the mail Individual Settlement Payments for all Plaintiff Class Members 17 and the PAGA Payments to the PAGA Releasees and the LWDA by the Settlement Proceeds 18 Distribution Deadline. No person shall have any claim against the Settlement Administrator, 19 Defendants, Class Counsel, Defense Counsel, or any other agent designated by Plaintiff or Defendants 20 based upon the distribution of Individual Settlement Payments and the PAGA Payments made 21 substantially in accordance with this Agreement or further orders of the Court. 22 (b) The Individual Settlement Payments shall be paid to each Plaintiff Class 23 Member by way of a single check. Each Individual Settlement Payment check will contain language 24 in substantially the following form: “I understand that by cashing, depositing, or otherwise negotiating 25 this check I will be deemed to have opted into Sarah Stonehocker, on behalf of herself and all others 26 similarly situated, vs. Kindred Healthcare Operating, LLC et al., Case No. 4:19-cv-02494-YGR for 27 purposes of the federal Fair Labor Standards Act (FLSA) release to the extent required to do so under 28 applicable law for purposes of the court-approved settlement therein.” LITTLER M ENDELSON, P.C. 633 West 5th Street 63rd Floor Los Angeles, CA 90071 213.443.4300 JOINT STIPULATION AND CLASS AND REPRESENTATIVE ACTION SETTLEMENT AGREEMENT AND RELEASE 27. CASE NO. 4:19-cv-02494-YGR (c) 1 PAGA Payment Check shall be paid to each PAGA Releasee by way of a single 2 check. The PAGA Payment Check represents the portion of the civil penalties awarded directly under 3 PAGA. (d) 4 Any settlement checks that are not claimed or not negotiated within ninety (90) 5 days after distribution by the Settlement Administrator shall be void. The Settlement Administrator 6 shall send one reminder postcard to any settlement check recipients who did not claim or not negotiate 7 their settlement checks within forty-five (45) days after distribution by the Settlement Administrator 8 to claim and/or negotiate their settlement checks. Any funds not distributed after the expiration of the 9 settlement checks shall be paid to the Court-approved cy pres beneficiary of the Settlement. The 10 Parties agree to propose the First Responders Children’s Foundation COVID-19 Emergency Response 11 Fund as the cy pres beneficiary. 12 (e) Except as otherwise stated in this Agreement, the Settlement Administrator's 13 distribution of Class Counsel’s Fees and Expenses and the Service Award from the Gross Settlement 14 Fund shall occur on the Settlement Proceeds Distribution Deadline. Upon such payment, Defendants, 15 the Released Parties, Defense Counsel, and the Settlement Administrator shall have no further liability 16 or responsibility to Plaintiff, Class Counsel or to any vendors or third parties employed by the Plaintiff 17 or Class Counsel. 18 (f) 19 Defendants shall not be obligated to make any payments contemplated by this Agreement until the conditions set forth in this Agreement occur. 6.9 20 CAFA Notice. The Court’s subject matter jurisdiction over the Action is based on 21 CAFA. Pursuant to the requirements of the CAFA, within ten (10) days after this Settlement is filed 22 in Court, Defendants will prepare a notice of the Settlement pursuant to CAFA and the Settlement 23 Administrator will serve such notice to the United States Attorney General and appropriate state 24 officials. The notice shall comply with the requirements of the CAFA. 25 7. 26 COURT APPROVAL AND EFFECTIVE DATES 7.1 Binding Effect of Agreement on Class Members. Upon final Court approval of the 27 Class Settlement, all Plaintiff Class Members shall be bound by this Agreement, and the Action and 28 the Settled Claims shall be dismissed with prejudice and released as against the Released Parties to LITTLER M ENDELSON, P.C. 633 West 5th Street 63rd Floor Los Angeles, CA 90071 213.443.4300 JOINT STIPULATION AND CLASS AND REPRESENTATIVE ACTION SETTLEMENT AGREEMENT AND RELEASE 28. CASE NO. 4:19-cv-02494-YGR 1 the greatest extent permitted by law. In addition, unless a Class Member effectively opts out of the 2 Settlement, he or she shall be bound by the Court's Order enjoining all Plaintiff Class Members from 3 pursuing or seeking to reopen Settled Claims against the Released Parties to the greatest extent 4 permitted by law. Upon Court approval of the PAGA Payment and the release of the PAGA Claims, 5 all PAGA Releasees shall be bound by the release of the PAGA Claims and the PAGA Claims shall 6 be dismissed with prejudice and released as against all the Released Parties to the greatest extent 7 permitted by law. 8 7.2 Amendment of the Complaint. Upon execution of this Agreement, Plaintiff shall 9 promptly move to amend the First Amended Complaint to add Kindred Rehab Services, LLC, Kindred 10 Rehab Services, Inc., RehabCare Group East, LLC, RehabCare Group East, Inc., American VitalCare 11 LLC, and RehabCare Group of California, LLC as named defendants and add the following causes of 12 action: (1) failure to provide compliant meal breaks; (2) failure to authorize and permit compliant rest 13 breaks; (3) failure to furnish accurate wage statements; (4) failure to keep accurate employment 14 records; (5) failure to pay wages when due; and (6) PAGA civil penalties. A copy of the proposed 15 Second Amended Complaint to be filed by Plaintiff is attached hereto as Exhibit B. 16 7.3 Preliminary Approval and Order Approving PAGA Settlement. Upon execution of this 17 Agreement, Plaintiff shall file a motion in the Action requesting that the Court enter a Preliminary 18 Approval Order and Order Approving PAGA Settlement as follows: (a) 19 Approving the PAGA Settlement, including the PAGA Payment, distribution 20 plan of the PAGA Payment, and the release of the PAGA Claims set forth in this Agreement and 21 preliminarily approving for settlement purposes only the remaining portions of the proposed 22 Settlement; 23 (b) Dismissing the PAGA Claims asserted in the Action with prejudice as to the 24 Plaintiff and all PAGA Releasees and permanently enjoining all PAGA Releasees from pursuing or 25 seeking to reopen the PAGA Claims against the Released Parties; 26 27 (c) Preliminarily approving the appointment of the Plaintiff as representative of the Class for settlement purposes only; 28 LITTLER M ENDELSON, P.C. 633 West 5th Street 63rd Floor Los Angeles, CA 90071 213.443.4300 JOINT STIPULATION AND CLASS AND REPRESENTATIVE ACTION SETTLEMENT AGREEMENT AND RELEASE 29. CASE NO. 4:19-cv-02494-YGR (d) 1 2 Preliminarily approving the appointment of Class Counsel as counsel for the Class for settlement purposes only; (e) 3 Appointing and approving the Settlement Administrator as chosen by the 4 Parties and approved by the Court, to administer the claims and settlement payment procedures 5 required by this Agreement; (f) 6 7 Notice be sent to Class Members and PAGA Releasees; (g) 8 9 Approving the plan for the provision of notice to Class Members and PAGA Releasees, as stated herein and in the Class Notices; (h) 10 11 Approving the form of the Class Notice, and requiring that individualized Class Scheduling the Final Approval Hearing for consideration of class certification for settlement purposes and final approval of this Agreement; (i) 12 Approving the procedure for Class Members and PAGA Releasees to challenge 13 the estimated Individual Settlement Payment and PAGA Payment Check amount set forth in the Class 14 Notice and the date after which no Class Member and PAGA Releasee shall be allowed to submit a 15 challenge; (j) 16 17 and the date after which no Class Member shall be allowed to submit a request to opt out; and (k) 18 19 Approving the procedure for Class Members to opt out of the Class Settlement Approving the procedure for Plaintiff Class Members to object to the Class Settlement and the date after which no Class Member shall be allowed to object. 20 Plaintiff agrees to provide her motion for Preliminary Approval Order and Order 21 Approving PAGA Settlement and the proposed order to her motion to Defendants for review as soon 22 as is practicable. 23 7.4 Non-Interference. The Parties and their counsel agree that they shall not seek to solicit 24 or otherwise encourage Class Members to submit an Opt-Out Request or an objection to the Settlement 25 or to appeal from the Preliminary Approval Order and Order Approving PAGA Settlement, Final 26 Approval Order or Judgment. 27 28 LITTLER M ENDELSON, P.C. 633 West 5th Street 63rd Floor Los Angeles, CA 90071 213.443.4300 7.5 Final Approval Order and Judgment. Plaintiff (or Plaintiff jointly with Defendants) will request that the Court enter, after the Final Approval Hearing finally approving the Class JOINT STIPULATION AND CLASS AND REPRESENTATIVE ACTION SETTLEMENT AGREEMENT AND RELEASE 30. CASE NO. 4:19-cv-02494-YGR 1 Settlement, a Final Approval Order and Judgment. Plaintiff (or Plaintiff jointly with Defendants) will 2 request that the Final Approval Order certify the Class for settlement purposes; find that this 3 Agreement is fair, just, equitable, reasonable, adequate and in the best interests of the Class; 4 permanently enjoin all Plaintiff Class Members from pursuing or seeking to reopen Settled Claims 5 against the Released Parties; and require the Parties to carry out the provisions of this Agreement. 6 Plaintiff agrees to provide her motion for final approval of the class settlement and the proposed order 7 to her motion to Defendants for review no later than seven (7) days before the filing date. 8 9 7.6 Entry of Final Judgment. Plaintiff (or Plaintiff jointly with Defendants) will request that the Court enter, after the Final Approval Hearing, a Final Approval Order and Judgment as agreed 10 to by the Parties. 11 7.7 Effective Date of Agreement. The “Effective Date” of this Agreement shall be the 12 latter of the last date by which all appeals of the Judgment could be filed or when actual appeals are 13 exhausted such that the Judgment becomes final. The Effective Date is conditioned upon all of the 14 following occurring: 15 (a) This Agreement has been signed by the Parties and Class Counsel; 16 (b) The Court has entered a Preliminary Approval Order and Order Approving 17 18 PAGA Settlement consistent with this Agreement; (c) The Court has entered an Order granting Plaintiff leave to file a Second 19 Amended Complaint substantially similar to the Second Amended Complaint attached hereto as 20 Exhibit B and the Second Amended Complaint is filed; 21 22 (d) The Class Notice has been mailed to the Class Members and PAGA Releasees as ordered by the Court in this Action; 23 (e) The Court has entered a Final Approval Order consistent with this Agreement; 24 (f) The Court has entered a Judgment dismissing the Action consistent with this 25 26 Agreement; and (g) Settlement Administrator has provided Defense Counsel with written wire/bank 27 transfer instructions, including the Settlement Administrator’s address, the bank name, bank address, 28 account number, account name, ABA number, and SWIFT Code. LITTLER M ENDELSON, P.C. 633 West 5th Street 63rd Floor Los Angeles, CA 90071 213.443.4300 JOINT STIPULATION AND CLASS AND REPRESENTATIVE ACTION SETTLEMENT AGREEMENT AND RELEASE 31. CASE NO. 4:19-cv-02494-YGR 1 7.8 Automatic Voiding of Agreement if Settlement Not Finalized. If for any reason the 2 Settlement set forth in this Agreement does not become final, the Settlement shall be null and void 3 and all orders, judgment, and dismissal entered pursuant to this Agreement shall be vacated, and the 4 Parties will be returned to the status quo prior to entering this Agreement with respect to the Action, 5 as if the Parties had never entered into this Agreement, and the settlement class certified pursuant to 6 this Agreement will be decertified for all purposes. In addition, in such event, the Agreement 7 (including all exhibits, drafts and related documents, papers, and communications) and all 8 negotiations, court orders and proceedings relating thereto shall be without prejudice to the rights of 9 any and all Parties hereto, and evidence relating to the Agreement (including all exhibits, drafts and 10 related documents, papers, and communications) and all negotiations shall not be admissible or 11 discoverable in the Action or otherwise. 12 7.9 Confidentiality and Non-Disparagement and Returning Documents. The Parties agree 13 that the terms of the Agreement shall be confidential until the filing of Plaintiff’s Motion for 14 Preliminary Approval Order and Order Approving PAGA Settlement. This confidentiality agreement 15 shall not prevent any counsel from conferring with and advising clients who have retained them, 16 provided that the clients agree to abide by this temporary confidentiality agreement. 17 (a) Plaintiff agrees that she shall not promote, or publicize the filing of this Action, 18 the Parties’ Settlement, this Agreement and its terms, or the negotiations leading to this Agreement 19 with anyone other than the Court. Notwithstanding the foregoing, Plaintiff may disclose the terms of 20 this Agreement to her spouse, Class Members, to those persons to whom disclosure is necessary for 21 the preparation of tax returns and other financial reports, and to persons to whom disclosure is ordered 22 by a court of competent jurisdiction or otherwise required by law. Plaintiff agrees that she may 23 disclose the terms of the Settlement to her spouse, but only so long as she first obtains her spouse’s 24 express agreement to maintain that information in confidence. 25 (b) Plaintiff and Class Counsel agree that they will not issue any press releases, 26 engage in any communications, or take any other action that would directly or indirectly provide the 27 press or media or any litigation reporting service with information about this Action, this Agreement, 28 or the Parties' Settlement or would otherwise enable or allow the press or other media or any litigation LITTLER M ENDELSON, P.C. 633 West 5th Street 63rd Floor Los Angeles, CA 90071 213.443.4300 JOINT STIPULATION AND CLASS AND REPRESENTATIVE ACTION SETTLEMENT AGREEMENT AND RELEASE 32. CASE NO. 4:19-cv-02494-YGR 1 reporting service to learn or obtain such information. Plaintiff and Class Counsel agree not to post any 2 information concerning this Settlement on the internet or social media, including Facebook, Twitter, 3 Instagram, LinkedIn, Snapchat. Plaintiff and Class Counsel further agree that they will not post any 4 information regarding this Agreement or the Settlement on their internet websites or take any such 5 action that would cause or allow such information to be posted on any other internet website or on the 6 web. 7.10 7 Invalidation of Agreement for Failure to Satisfy Conditions. The terms and provisions 8 of this Agreement are not recitals, but are deemed to constitute contractual terms. In the event that any 9 of the material terms or conditions set forth in this Agreement are not fully and completely satisfied, 10 this Agreement shall terminate and all terms of the Agreement including, but not limited to, the 11 conditional certification of the Class, the payment of Individual Settlement Amounts to Plaintiff Class 12 Members, the payment of attorneys' fees and costs to Class Counsel, the Service Award to Plaintiff, 13 and the payment of the PAGA Payment shall be null and void. In such event, nothing in this Agreement 14 shall be used, construed or admissible as evidence by or against any Party or Released Party as a 15 determination, admission, or concession of any issue of law or fact in this Action, or in any other 16 proceeding for any purpose; and the Parties do not waive, and instead expressly reserve, their 17 respective rights to prosecute and defend this Action as if this Agreement never existed. In addition, 18 notwithstanding the generality of the foregoing, if this Agreement is terminated for failure to satisfy 19 any of the terms or conditions of this Agreement, Defendants shall not be obligated to create or 20 maintain any type of settlement fund, and shall not be obligated to pay any amount in the Gross 21 Settlement Fund to any Class Member and/or PAGA Releasee, to Class Counsel, to the Settlement 22 Administrator, to the State of California or to Plaintiff. 23 8. GENERAL PROVISIONS 8.1 24 Notices. All notices, requests, demands and other communications required or 25 permitted to be given pursuant to this Agreement shall be in writing, and shall be delivered personally 26 or by first class mail to the Settlement Administrator appointed by the Court and to counsel at their 27 respective addresses as set forth below: 28 // LITTLER M ENDELSON, P.C. 633 West 5th Street 63rd Floor Los Angeles, CA 90071 213.443.4300 JOINT STIPULATION AND CLASS AND REPRESENTATIVE ACTION SETTLEMENT AGREEMENT AND RELEASE 33. CASE NO. 4:19-cv-02494-YGR 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 CLASS COUNSEL MATTHEW D. CARLSON, Bar No. 273242 mdcarlson@mdcarlsonlaw.com LAW OFFICE OF MATTHEW D. CARLSON 50 Fountain Plaza, Suite 1400, #206 Buffalo, NY 14202 Telephone: (716) 242-1234 DEFENSE COUNSEL ELIZABETH STAGGS WILSON estaggs-wilson@littler.com LITTLER MENDELSON, P.C. 633 West 5th Street, 63rd Floor Los Angeles, California 90071 Telephone: (213) 443.4300 Facsimile: (213) 443.4299 LISA LIN GARCIA llgarcia@littler.com ALICE WANG awang@littler.com LITTLER MENDELSON, P.C. 333 Bush Street, 34th Floor San Francisco, CA 94104.2842 Telephone: (415) 433-1940 Facsimile: (415) 399-8490 8.2 Nullification of Settlement Agreement. In the event: (1) the Court does not enter the 17 Preliminary Approval Order and Order Approving the PAGA Settlement as provided herein; (2) the 18 Court does not enter a Final Approval Order as provided herein; (3) the Settlement does not become 19 final for any other reason; or (4) Judgment is not entered by the Court dismissing the Action, including 20 all Settled Claims as to all Plaintiff Class Members with prejudice and PAGA Claims as to all PAGA 21 Releasees with prejudice, this Settlement Agreement shall be null and void and any order entered by 22 the Court in furtherance of this Settlement shall be treated as void from the beginning. In such case, 23 the Parties shall be returned to their respective statuses as of the date and time immediately prior to 24 the execution of this Settlement Agreement and the Parties shall proceed in all respects as if this 25 Settlement Agreement had not been executed. 26 27 8.3 Exhibits and Headings. The terms of this Settlement Agreement include the terms set forth in the attached Exhibits A, B and C, which are incorporated by this reference as though fully set 28 LITTLER M ENDELSON, P.C. 633 West 5th Street 63rd Floor Los Angeles, CA 90071 213.443.4300 JOINT STIPULATION AND CLASS AND REPRESENTATIVE ACTION SETTLEMENT AGREEMENT AND RELEASE 34. CASE NO. 4:19-cv-02494-YGR 1 forth herein. The descriptive headings of any paragraphs or sections of this Settlement Agreement are 2 inserted for convenience only and do not constitute a part of this Settlement Agreement. 3 8.4 Interim Stay of Proceedings/Reservation of Jurisdiction. The Parties agree to stay all 4 proceedings in the Action, except such proceedings necessary to implement and complete the 5 Settlement, pending the Final Approval Hearing to be conducted by the Court. 6 7 8 8.5 Amendment or Modification. This Settlement Agreement may be amended or modified only by a written instrument signed by Defense and Class Counsel or their successors-in-interest. 8.6 Entire Agreement. This Agreement constitutes the full, complete and entire 9 understanding, agreement and arrangement between the Plaintiff, the Class Members and the PAGA 10 Releasees on the one hand, and Defendants on the other hand, with respect to the Settlement of the 11 Action, the Settled Claims and the PAGA Claims against the Released Parties. This Agreement 12 supersedes any and all prior oral or written understandings, agreements and arrangements between the 13 Parties with respect to the Settlement of the Action, the Settled Claims and the PAGA Claims against 14 the Released Persons, including the Memorandum of Understanding reached on May 20, 2020 and 15 executed by the Parties thereafter. Except for those set forth expressly in this Agreement, there are no 16 other agreements, covenants, promises, representations or arrangements between the Parties with 17 respect to the Settlement of the Action, the Settled Claims and the PAGA Claims against the Released 18 Parties. The Parties explicitly recognize California Civil Code section 1625 and California Code of 19 Civil Procedure section 1856(a), which provide that a written agreement is to be construed according 20 to its terms, and may not be varied or contradicted by extrinsic evidence, and agree that no such 21 extrinsic oral or written representations or terms shall modify, vary, or contradict the terms of this 22 Agreement. The Settlement and this Agreement shall have no impact on the validity or enforceability 23 of the Dispute Resolution Agreements entered by the Class Members, and the settlement shall not 24 prejudice Defendants or the Released Parties from seeking to enforce such Dispute Resolution 25 Agreements. 26 8.7 Authorization to Enter Into Settlement Agreement. The person or persons signing this 27 Settlement Agreement on behalf of Defendants represent and warrant that he/she/they are authorized 28 to sign this Settlement Agreement on behalf of Defendants. Plaintiff represents and warrants that she LITTLER M ENDELSON, P.C. 633 West 5th Street 63rd Floor Los Angeles, CA 90071 213.443.4300 JOINT STIPULATION AND CLASS AND REPRESENTATIVE ACTION SETTLEMENT AGREEMENT AND RELEASE 35. CASE NO. 4:19-cv-02494-YGR 1 is authorized to sign this Settlement Agreement and that she has not assigned any Claim covered by 2 this Settlement to a third-party. Plaintiff, by signing this Settlement Agreement, is bound by the terms 3 herein and further agrees not to submit any Request for Exclusion from or Notice of Objection to the 4 Settlement. Any such Request for Exclusion or Notice of Objection shall therefore be void and of no 5 force or effect. 6 8.8 Signature of all Class Members Unnecessary to be Binding. The Parties agree that 7 because the Class Members are numerous, it is impossible or impractical to have each Class Member 8 execute this Agreement. The Notice will advise all Class Members of the binding nature of the release 9 provided herein and shall have the same force and effect as if the Agreement were executed by each 10 Class Member. The only Class Members who will not be bound by the terms of this Agreement are 11 those who submit a timely and valid Request for Exclusion. 12 13 14 8.9 Binding on Successors and Assigns. This Settlement Agreement shall be binding upon, and inure to the benefit of, the successors or assigns of the Parties hereto, as previously defined. 8.10 Captions. The captions and section and paragraph numbers in this Agreement are 15 inserted for the reader’s convenience, and in no way define, limit, construe, or describe the scope or 16 intent of the provisions of this Agreement. 17 18 19 8.11 California Law Governs. All terms of this Settlement Agreement shall be governed by and interpreted according to the laws of the State of California. 8.12 Publicity. Plaintiff and Class Counsel agree that they will not issue any press releases, 20 initiate any contact with the press, respond to any inquiry from the press about this case, or otherwise 21 publicize this Action, the facts of this Action, or the outcome of the mediation or Settlement. With 22 the exception of a general description of the case and total settlement amount, with no party identifying 23 information, Plaintiff and Class Counsel also agree not to publish the terms of the settlement or any 24 related information on their website(s), for advertising purposes and/or in publication materials 25 generally available to the public. This provision shall not prevent Class Counsel from referring to this 26 Settlement in court-filed “adequacy of counsel” showings in other class and representative actions. 27 28 LITTLER M ENDELSON, P.C. 633 West 5th Street 63rd Floor Los Angeles, CA 90071 213.443.4300 8.13 Mutual Cooperation. The Parties agree to fully cooperate with each other to accomplish the terms of this Agreement, including but not limited to, execution of such documents and to take JOINT STIPULATION AND CLASS AND REPRESENTATIVE ACTION SETTLEMENT AGREEMENT AND RELEASE 36. CASE NO. 4:19-cv-02494-YGR 1 such other action as may be necessary to implement the terms of this Agreement. The Parties to this 2 Agreement shall use their best efforts, including all reasonable efforts contemplated by this Agreement 3 and any other reasonable efforts that may become necessary by order of the Court, or otherwise, to 4 effectuate this Agreement and the terms set forth herein. 5 8.14 Mutual Preparation. The Parties have had a full opportunity to negotiate the terms and 6 conditions of this Agreement. Accordingly, this Agreement shall not be construed more strictly against 7 one party than another merely by virtue of the fact that it may have been prepared by counsel for one 8 of the Parties, it being recognized that, because of the arms-length negotiations between the Parties, 9 all Parties have contributed to the preparation of this Agreement. 10 8.15 Severability. The Parties to this Agreement agree, covenant, and represent that each 11 and every provision of this Agreement shall be deemed to be contractual, and that they shall not be 12 treated as mere recitals at any time or for any purpose. Therefore, the Parties further agree, covenant, 13 and represent that each and every provision of this Agreement shall be considered severable, except 14 for the release provisions of Paragraphs 4.3 and 4.4 of this Agreement. If a court of competent 15 jurisdiction finds the release provisions of Paragraphs 4.3 or 4.4 of this Agreement to be unenforceable 16 or invalid as against a Class Member/PAGA Releasee, then this Agreement shall become voidable and 17 the payments made pursuant to this Agreement to that Class Member/PAGA Releasee shall be 18 returned to Defendants by that Class Member/PAGA Releasee as to whom the release provisions have 19 been found unenforceable or invalid. If a court of competent jurisdiction finds any provision, other 20 than the release provisions of Paragraphs 4.3 and 4.4, or part thereof to be invalid or unenforceable for 21 any reason, that provision, or part thereof, shall be severed from the Agreement, and all of the 22 remaining provisions of this Agreement shall remain in full force and effect. 23 8.16 Warranties and Representations. With respect to themselves, each of the Parties to this 24 Agreement and or their agent or counsel represents, covenants and warrants that (a) they have full 25 power and authority to enter into and consummate all transactions contemplated by this Agreement 26 and have duly authorized the execution, delivery and performance of this Agreement; and (b) the 27 person executing this Agreement has the full right, power and authority to enter into this Agreement 28 on behalf of the party for whom he/she has executed this Agreement, and the full right, power and LITTLER M ENDELSON, P.C. 633 West 5th Street 63rd Floor Los Angeles, CA 90071 213.443.4300 JOINT STIPULATION AND CLASS AND REPRESENTATIVE ACTION SETTLEMENT AGREEMENT AND RELEASE 37. CASE NO. 4:19-cv-02494-YGR 1 authority to execute any and all necessary instruments in connection herewith, and to fully bind such 2 party to the terms and obligations of this Agreement. 8.17 3 Representation by Counsel. The Parties acknowledge that they have been represented 4 by counsel throughout all negotiations that preceded the execution of this Agreement, and that this 5 Agreement has been executed with the consent and advice of counsel. Further, Plaintiff and Class 6 Counsel warrant and represent that there are no liens on the Agreement, and that Defendants may 7 distribute funds to the Plaintiff Class Members, the PAGA Releasees, Class Counsel, and Plaintiff as 8 provided by this Agreement. 8.18 9 Action to Enforce Agreement. In any suit or court action to enforce the terms of this 10 Agreement, the prevailing party shall be entitled to recover his, her, its, or their attorneys’ fees and 11 costs. 8.19 12 Authorization by Plaintiff. Plaintiff authorizes Class Counsel to sign this Agreement 13 and further agrees not to request to be excluded from the Class and not to object to any terms of this 14 Agreement. Any such request for exclusion or objection shall therefore be void and of no force or 15 effect. 8.20 16 Counterparts. This Settlement Agreement shall become effective upon its execution by 17 all of the undersigned. Plaintiff, Class Counsel and Defendants may execute this Settlement 18 Agreement in counterparts, which shall have the same force and effect as if each had signed the same 19 instrument. All executed copies of this Agreement, and photocopies thereof (including facsimile and 20 PDF copies of the signature pages) shall have the same force and effect and shall be as legally binding 21 and enforceable as the original. 22 IN WITNESS WHEREOF, the Parties and their counsel have executed this Agreement on the 23 date below their signatures or the signature of their representatives. The date of the Agreement shall 24 be the date of the latest signature. 25 // 26 // 27 // 28 // LITTLER M ENDELSON, P.C. 633 West 5th Street 63rd Floor Los Angeles, CA 90071 213.443.4300 JOINT STIPULATION AND CLASS AND REPRESENTATIVE ACTION SETTLEMENT AGREEMENT AND RELEASE 38. CASE NO. 4:19-cv-02494-YGR 2 Exhibit A EXHIBIT A Skilled Clinician Positions: CERT OCCUP THERA ASST PRN CERT OCCUP THERAPY ASST OCCUPATIONAL THER PRN OCCUPATIONAL THERAPIST LEAD RT - VITALCARE PHYSICAL THERAPIST PHYSICAL THERAPIST PRN PHYSICAL THERAPY ASST PHYSICAL THERAPY ASST PRN PROGRAM DIR I SLP PROGRAM DIRECTOR I PROGRAM DIRECTOR I COTA PROGRAM DIRECTOR I OT PROGRAM DIRECTOR I PT PROGRAM DIRECTOR I PTA PROGRAM DIRECTOR I SLP RCL OT RCL OTA RCL PT RCL PTA RCL SLP REHAB COORD OT REHAB COORD OT PRN REHAB COORD PT REHAB COORD PT PRN REHAB COORD PTA REHAB COORD SLP REHAB COORD SLP PRN RESPIRATORY THERAPIST RESPIRATORY THERAPIST PRN RESPIRATORY THERAPIST - VC SP LANG PATHOLOGIST PRN SPEECH LANG PATH CFY SPEECH LANG PATH CFY PRN SPEECH LANG PATH PRN SPEECH LANG PATHOLOGIST 4819-7290-6183.3 Exhibit B 1 2 3 4 5 Matthew D. Carlson (State Bar No. 273242) mdcarlson@mdcarlsonlaw.com LAW OFFICE OF MATTHEW D. CARLSON 50 Fountain Plaza, Suite 1400, #206 Buffalo, NY 14202 Telephone: (716) 242-1234 Attorney for Plaintiff SARAH STONEHOCKER 6 7 UNITED STATES DISTRICT COURT 8 NORTHERN DISTRICT OF CALIFORNIA 9 10 11 12 SARAH STONEHOCKER, on behalf of herself and all others similarly situated SECONDED AMENDED COMPLAINT 13 Plaintiff, 14 15 16 17 18 19 20 21 Case No.: 19-cv-02494-YGR v. KINDRED HEALTHCARE OPERATING, LLC, KINDRED REHAB SERVICES, LLC, KINDRED REHAB SERVICES, INC., REHABCARE GROUP EAST, LLC, REHABCARE GROUP EAST, INC., AMERICAN VITALCARE, LLC, REHABCARE GROUP OF CALIFORNIA, LLC and DOES 125, Complaint Filed: February 14, 2019 (San Francisco Superior Court) CLASS ACTION Defendants. 22 23 24 25 26 27 28 SECOND AMENDED COMPLAINT– CASE NO.: 19-CV-02494-YGR 1 2 3 4 5 6 Plaintiff Sarah Stonehocker, by and through her attorney, brings this wage and hour class and Labor Code Private Attorneys General Act representative action against Defendants Kindred HealthCare Operating, LLC, Kindred Rehab Services, LLC, Kindred Rehab Services, Inc., RehabCare Group East, LLC, RehabCare Group East, Inc., American VitalCare, LLC and RehabCare Group of California, LLC (collectively, “Kindred”), and hereby alleges as follows: NATURE OF THE ACTION 7 8 9 1. Plaintiff and similarly situated aggrieved employees are current or former Skilled Clinicians (“Class Members”) who have been employed by Kindred to work at Skilled Nursing 10 Facilities (“SNFs”) throughout the State of California. Class Members include physical 11 therapists, occupational therapists, respiratory therapists, speech therapists, speech language 12 pathologists, rehabilitation coordinators, rehab clinical leaders and other similar positions that 13 provide skilled direct patient care at SNFs. Plaintiff’s claims arise from Kindred’s strict and 14 impracticable minimum Patient Care Ratio (“minimum PCR”) productivity standard and other 15 productivity standards, and its attendant systemic and failure to pay Class Members for all hours 16 worked (including but not necessarily limited to overtime hours), provide Class Members with 17 timely and duty-free meal periods, authorize and permit Class Members to take timely and duty- 18 free rest periods, provide Class Members with accurate itemized wage statements, maintain 19 accurate payroll records for Class Members, and pay Class Members all wages when due. These 20 Labor Code violations are also violations of California’s Unfair Competition Law, Cal. Bus. & 21 Prof. Code § 17200, et seq. (“UCL”), and also subject Kindred to penalties pursuant to the Labor 22 Code Private Attorneys General Act of 2004 (“PAGA”). 23 24 25 26 27 28 JURISDICTION 2. The Court has jurisdiction over this action pursuant to the Class Action Fairness Act of 2005 (“CAFA”), 28 U.S.C. §§ 1331, 1332(d), 1367, and 1453. CAFA vests the United States district courts with original jurisdiction of any civil action: (a) that is a class action with a putative class of more than a hundred members; (b) in which any member of a class of Plaintiff SECOND AMENDED COMPLAINT – CASE NO.: 19-CV-02494-YGR 1 1 2 is a citizen of a state different from any defendant; and (c) in which the matter in controversy exceeds the sum or value of $5,000,000, exclusive of interest and costs. 3 VENUE 4 5 6 3. This Court is the proper venue for this matter because Plaintiff worked for Kindred in the Northern District of California. THE PARTIES 7 8 9 4. Plaintiff Sarah Stonehocker is a citizen of California, domiciled in San Francisco, California. Plaintiff worked for Kindred as an occupational therapist in several of Kindred’s San 10 Francisco SNFs (Tunnell Center and, from time to time, Lawton and Victorian Centers) from 11 October 31, 2006, until October 17, 2016, at which time she transitioned to a home health care 12 position with Kindred. Plaintiff’s employment relationship with Kindred ended on December 28, 13 2019. For a one-month period around July 2015, Plaintiff worked as a temporary first-level 14 Rehabilitation Manager (“RM”), filling in for Plaintiff’s RM and direct superior, during which 15 time Plaintiff worked as both a SC and as a RM/first level manager of her SC colleagues. 16 5. 17 principal place of business in Louisville, Kentucky, doing business throughout California as 18 described herein. 19 6. 20 that subsidiaries, affiliates, parent companies, purchasers, and/or joint venturers of or with 21 Kindred may properly be Defendants in this matter. Discovery may also show that certain 22 23 Kindred Healthcare Operating, LLC is a Delaware limited liability company with its Plaintiff does not know the names or capacities of Does 1-25, but discovery may show individuals currently unknown to Plaintiff may be liable for some or all of the claims asserted herein pursuant to Cal. Lab. Code § 588.1. 24 25 26 27 28 V. FACTUAL ALLEGATIONS 7. Plaintiff and Class Members were or are employed by Kindred at SNFs throughout California. 8. Class Members who are or employed by Kindred to work at SNFs were typically required SECOND AMENDED COMPLAINT – CASE NO.: 19-CV-02494-YGR 2 1 2 3 4 5 6 7 8 9 to see a specific number of patients based on the length of their shifts. For example, Class Members were typically required to see seven to twelve patients in an eight-hour shift. With respect to each “regular” patient visit (i.e., visits that were not for initial evaluations, reassessments, or discharge), Class Members provided skilled direct patient care, and also performed a minimum of approximately 10-20 minutes per patient of unskilled ancillary work, including, for example, paperwork, chart review, and care team communication. Class Members also spent 15-30 minutes each shift checking in at the beginning of their shifts, obtaining their schedules, and checking out at the end of their shifts. On such eight-hour shifts, Class Members 10 were also typically allotted with two ten-minute rest breaks each day. Thus, during an eight-hour 11 shift, Class Members spent, at minimum, 105 minutes of their 420-minute shifts – 25% of their 12 time – on unskilled work: basic ancillary work, breaks, and shift prep and wrap-up tasks. Class 13 Members frequently spent substantially more than 25% of their shift on unskilled work when 14 they saw patients for initial evaluations, reassessments, and discharge. Class Members also 15 attended weekly or biweekly staff meetings that each took between 30 minutes and one hour, 16 which further reduced the amount of skilled work provided on the days on which staff meetings 17 were held. 18 9. 19 PCR, or patient care ratio, pursuant to which Class Members were required to spend at least 87% 20 of their shift time on skilled direct patient care. 21 10. 22 23 24 25 26 27 28 Despite this allocation of work time, Kindred maintained the above-mentioned minimum Kindred and its management rigorously enforced the minimum PCR. For example, Kindred Area Directors (second-level managers) sent to subordinate RMs (first-level managers) throughout California spreadsheets containing, inter alia, individual Class Members’ PCRs, with instructions to “get our therapists up to expectations”, “ameliorate the low time spent in direct pt care”, and to “concentrate on the outliers highlighted” in the spreadsheets. Indeed, some Class Members with PCRs below 87% had their names and statistics highlighted in yellow on such spreadsheets. Thus, Class Members who fell below the minimum PCR were reprimanded by SECOND AMENDED COMPLAINT – CASE NO.: 19-CV-02494-YGR 3 1 2 3 4 5 6 7 8 9 RMs and were forced to meet with RMs to discuss why they did not meet the minimum PCR and to come up with a plan to meet or exceed the minimum PCR, and RMs frequently posted Class Members’ PCRs on viewable bulletin boards. Kindred also implemented a generally applicable policy pursuant to which it paid bonuses to Class Members who maintained PCRs at 87% or higher (87%-89% = 1.5% bonus; 90%-92% = 2.0% bonus; 93%-100% = 2.5% bonus). Thus, Class Members were incentivized and pressured to meet or exceed their minimum PCRs or face adverse employment action, lesser pay, or both. RMs were, in turn, pressured by Area Directors (and likely also incentivized) to have Class Members under their management meet or exceed the 10 minimum PCR, and Area Directors reprimanded RMs when Class Members failed to meet or 11 exceed the minimum PCR. 12 11. 13 standards, Class Members were able to do so by performing unpaid and undocumented work, 14 including overtime work, and/or by working through some or all meal and/or rest periods. 15 12. 16 sought to limit or eliminate overtime hours worked and managers reprimanded Class Members 17 for working overtime hours. Indeed, management circulated an “overtime watch list” for 18 California “areas”. On the infrequent occasions on which Class Members did report overtime 19 hours worked, Kindred management would oftentimes simply change Class Members’ time 20 records so that the records showed fewer overtime hours worked than were actually worked, or 21 no overtime hours worked at all. 22 23 24 25 26 27 28 13. To meet the various productivity standards set by Kindred, including minimum PCR Class Members did not typically report all hours worked to managers, because Kindred As a result of Kindred’s failure to pay Class Members for all hours worked (including but not limited to overtime hours worked), failure to provide duty-free meal periods, and failure to authorize and permit duty-free rest periods, Class Members, or an identifiable subset thereof, were not paid wages owed at the time of quitting or discharge. 14. As a result of Kindred’s failure to pay Class Members for all hours worked (including but not limited to overtime hours worked), failure to provide duty-free meal periods, and failure to SECOND AMENDED COMPLAINT – CASE NO.: 19-CV-02494-YGR 4 1 2 3 4 5 6 7 authorize and permit duty-free rest periods, Class Members were not provided with accurate wage statements. 15. As a result of Kindred’s failure to pay Class Members for all hours worked (including but not limited to overtime hours worked), failure to provide duty-free meal periods, and failure to authorize and permit duty-free rest periods, Kindred failed to maintain accurate payroll records for Class Members. VI. CLASS ACTION ALLEGATIONS 8 9 10 16. Plaintiff’s claims are brought on behalf of herself and all others similarly situated. This putative class is defined as: “All persons who are or were employed by one or more Defendants as nonexempt Skilled Clinicians to work at a skilled nursing facility in California at any time from February 14, 2015 through September 1, 2020.” 11 12 13 A. ASCERTAINABILITY 14 17. It is administratively feasible to determine the Class Members through Kindred’s records 15 because Kindred maintains Class Members’ personal information, including contact information 16 and pay records. 17 18 19 20 21 22 23 24 25 26 27 28 B. NUMEROSITY 18. There are at least 2,000 Class Members. C. COMMONALITY 19. Class Members share common issues of fact, including but not limited to: a. Whether Kindred has had a practice of failing to pay Class Members for all hours worked (including but not limited to minimum wage, straight time and/or overtime compensation) in violation of Cal. Lab. Code §§ 510, 1194, 1197, 1198; Wage Order Nos. 4 and 5; and corresponding California Code of Regulations; b. Whether Kindred has had a practice of failing to provide Class Members with accurate wage statements showing the information required by Cal. Lab. Code § 226; c. Whether Kindred has had a practice of failing to keep accurate payroll records for SECOND AMENDED COMPLAINT – CASE NO.: 19-CV-02494-YGR 5 1 2 3 4 5 6 7 8 9 10 11 Class Members in violation of Cal. Lab. Code §§ 226, 1174 and/or 1174.5; d. Whether Kindred has had a practice of failing to provide Class Members with 30- minute duty-free meal periods when Class Members work more than five hours per day and failing to pay meal break penalties in violation of Cal. Lab. §§ 226.7, 512; Wage Order Nos. 4 and 5; and corresponding California Code of Regulations; e. Whether Kindred has had a practice of failing to authorize and permit Class Members to take 10-minute duty-free rest periods for every four hours of Class Members’ work time or major fraction thereof and failing to pay rest break penalties in violation of Cal. Lab. § 226.7; Wage Order Nos. 4 and 5; and corresponding California Code of Regulations; and f. Whether Kindred has had a practice of failing to timely pay Class Members 12 during employment and Class Members who have been discharged or who have quit their wages 13 when due in violation of Cal. Lab. Code §§ 201-204. 14 20. Class Members share common issues of law, including: 15 a. Whether Kindred’s practice of failing to pay Class Members for all hours worked 16 (including but not limited to overtime hours) is in violation of Cal. Lab. Code §§ 510, 1194, 17 1197, 1198, Wage Order Nos. 4 and/or 5 and/or corresponding California Code of Regulations; 18 b. Whether Kindred’s practice of failing to keep accurate time and payroll records 19 for Class Members is in violation of Cal. Lab. Code §§ 226, 1174, 1174.5, Wage Order Nos. 4 20 and/or 5 and/or corresponding California Code of Regulations; 21 22 23 24 25 26 27 28 c. Whether Kindred’s practice of failing to provide Class Members with accurate wage statements is in violation of Cal. Lab. Code § 226; d. Whether Kindred’s practice of failing to provide Class Members with 30-minute duty-free meal periods when Class Members work more than five hours per day and failing to pay meal break penalties is in violation of Cal. Lab. Code §§ 226.7, 512, Wage Order Nos. 4 and/or 5 and/or corresponding California Code of Regulations; e. Whether Kindred’s practice of failing to authorize and permit Class Members to SECOND AMENDED COMPLAINT – CASE NO.: 19-CV-02494-YGR 6 1 2 3 4 take 10-minute duty-free rest periods for every four hours of Class Members’ work time or major fraction thereof and failing to pay rest break penalties is in violation of Cal. Lab. Code § 226.7, Wage Order Nos. 4 and/or 5 and/or corresponding California Code of Regulations; and f. 5 6 7 8 9 Whether Kindred’s practice of failing to timely pay all wages due to Class Members during their employment and Class Members who have been discharged or who have quit their wages when due is in violation of Cal. Lab. Code §§ 201, 202, 203 and 204. 21. The common issues of law can be answered with proof common to Class Members, including: 10 a. Kindred’s practices with respect to productivity; 11 b. Kindred’s practices with respect to off the clock work performed; 12 c. Kindred’s practices with respect to payroll records 13 d. Kindred’s practices with respect to wage statements; 14 e. Kindred’s practices with respect to meal periods; 15 f. Kindred’s practices with respect to rest periods; 16 g. Kindred’s practices with respect to timely paying employees all wages due during 17 their employment; 18 19 h. have been discharged or who have quit; and 20 21 22 23 24 25 26 27 28 Kindred’s practices with respect to timely paying employees all wages due who i. All other facts common to the putative class alleged above. D. TYPICALITY 22. Plaintiff’s claims are typical, if not identical, to the claims that could be asserted by Class Members, as Plaintiff’s claims arise from Kindred’s systemic failure to (1) properly compensate Plaintiff and Class Members for all hours worked (including but not necessarily limited to overtime hours); (2) provide them with accurate wage statements; (3) provide Class Members with timely and duty-free meal periods; (4) authorize and permit Class Members to take timely and duty-free rest periods; (5) maintain accurate payroll records for Class Members; and (6) pay SECOND AMENDED COMPLAINT – CASE NO.: 19-CV-02494-YGR 7 1 2 3 4 5 6 7 8 9 Class Members all wages when due. E. ADEQUACY 23. Plaintiff is a Class Member and will fairly and adequately represent and protect the interests of Class Members. Plaintiff has no conflicts of interests with Class Members. 24. Counsel for Plaintiff is competent and experienced in litigating wage and hour class action. F. PREDOMINANCE 25. Common questions of law and fact predominate over individual issues in this action 10 because the issue of Kindred’s liability for the wage and hour violations identified herein can be 11 established as to all Class Members with proof of Kindred’s substantially uniform pay practices. 12 G. SUPERIORITY 13 26. A class action is superior to all other available methods for the fair and efficient 14 adjudication of this controversy. Because of the relatively small monetary value of the claims 15 asserted by Class Members, most if not all Class Members would likely find the cost of 16 individually litigating their claims against Kindred to be prohibitive. Further, thousands of 17 individual proceedings in lieu of a class action would be an unnecessary burden on the court 18 system as well as the parties. Additionally, many Class Members may be unaware that they have 19 legal recourse against Kindred for the conduct alleged herein. 20 VII. FIRST CLAIM 21 Failure to Pay Minimum Wage, Straight Time and/or Overtime Wages 22 Cal. Lab. Code §§ 510, 1194, 1197, 1198, Wage Order 4 and/or 5 and Corresponding 23 24 25 26 27 28 California Code of Regulations 27. Plaintiff, on behalf of herself and Class Members, realleges and incorporates by reference the allegations in the preceding paragraphs as if fully alleged herein. 28. Pursuant to California law, Kindred was and/or is the employer of Plaintiff and Class Members. SECOND AMENDED COMPLAINT – CASE NO.: 19-CV-02494-YGR 8 1 2 3 4 5 6 7 8 9 29. Cal. Lab. Code § 1198, Wage Order 4 and 5 and corresponding California Code of Regulations require employers to pay their employees at their overtime rate of pay for hours worked in excess of eight per day and/or 40 per week. 30. Cal. Lab. Code § 1194 states that any employee receiving less than the legal overtime compensation applicable to the employee is entitled to recover in a civil action the unpaid balance of the full amount of this minimum wage or overtime compensation, including interest thereon, reasonable attorneys’ fees, and costs of suit. 31. Cal. Lab. Code § 1197, Wage Order 4 and 5 and corresponding California Code of 10 Regulations require that minimum wage for employees fixed by the Industrial Welfare 11 Commission or by any applicable state or local law, is the minimum wage to be paid to 12 employees, and the payment of a lower wage than the minimum so fixed is unlawful. 13 32. 14 such work. Kindred therefore have violated the provisions of the applicable Wage Orders, 15 California Code of Regulations and Labor Code sections that require proper compensation for all 16 hours worked. 17 33. 18 payment for their hours worked, plus attorneys’ fees and costs of suit. Plaintiff and Class Members worked for Kindred but were not properly compensated for As a result of Kindred’s unlawful conduct, Plaintiff and Class Members or are owed back 19 VIII. SECOND CLAIM 20 Failure to Furnish Accurate Wage Statements 21 Cal. Lab. Code § 226 22 23 24 25 26 27 28 34. Plaintiff, on behalf of herself and Class Members, realleges and incorporates by reference the allegations in the preceding paragraphs as if fully alleged herein. 35. Pursuant to California law, Kindred was and/or is the employer of Plaintiff and Class Members. 36. Cal. Lab. Code § 226 states that every employer shall, semimonthly or at the time of each payment of wages, furnish each of his or her employees, either as a detachable part of the check, SECOND AMENDED COMPLAINT – CASE NO.: 19-CV-02494-YGR 9 1 2 3 4 5 6 7 8 9 draft, or voucher paying the employee's wages, or separately when wages are paid by personal check or cash, an accurate itemized statement in writing showing (1) gross wages earned, (2) total hours worked by the employee, except for any employee whose compensation is solely based on a salary and who is exempt from payment of overtime under subdivision (a) of Section 515 or any applicable order of the Industrial Welfare Commission, (3) the number of piece-rate units earned and any applicable piece rate if the employee is paid on a piece-rate basis, (4) all deductions, provided that all deductions made on written orders of the employee may be aggregated and shown as one item, (5) net wages earned, (6) the inclusive dates of the period for 10 which the employee is paid, (7) the name of the employee and only the last four digits of his or 11 her social security number or an employee identification number other than a social security 12 number, (8) the name and address of the legal entity that is the employer and, if the employer is a 13 farm labor contractor, as defined in subdivision (b) of Section 1682, the name and address of the 14 legal entity that secured the services of the employer, and (9) all applicable hourly rates in effect 15 during the pay period and the corresponding number of hours worked at each hourly rate by the 16 employee and, beginning July 1, 2013, if the employer is a temporary services employer as 17 defined in Section 201.3, the rate of pay and the total hours worked for each temporary services 18 assignment. 19 37. 20 wage statements in writing showing total hours worked and/or all applicable hourly rates. 21 Further, for example, as a result of Kindred failing to pay all wages and meal and/or rest break 22 23 24 25 26 27 28 Kindred unlawfully failed to provide Plaintiff and Class Members with accurate itemized premiums owed to Plaintiff and Class Members, the listed gross wages are also inaccurate. 38. Plaintiff and Class Members suffered injury as a result of Kindred’s conduct because, for example, they could not readily ascertain their true hours worked and their true wages owed from the wage statements provided. 39. The injuries suffered by Plaintiff and Class Members as a result of this misconduct were as a result of Kindred’s knowing and intentional failure to comply with Cal. Lab. Code § 226(a). SECOND AMENDED COMPLAINT – CASE NO.: 19-CV-02494-YGR 10 1 2 3 4 5 40. Accordingly, Plaintiff and each Class Member are entitled to recover fifty dollars for the initial pay period in which a violation of § 226 occurred, and one hundred dollars for each violation of § 226 in a subsequent pay period, not to exceed a penalty of four thousand dollars per Class Member plus attorney fees, costs, and injunctive relief. IX. THIRD CLAIM 6 Failure to Provide Compliant Meal Periods 7 8 Cal. Lab. Code §§ 226.7, 512, Wage Order 4 and/or 5 and Corresponding California Code of Regulations 9 10 41. 11 the allegations in the preceding paragraphs as if fully alleged herein. 12 42. 13 Members. 14 43. 15 Regulations require employers to provide all employees with one 30-minute duty-free meal 16 period if such employee works more than five hours in one day and a second 30-minute duty-free 17 meal period if such employee work more than 10 hours in one day and require employers to pay 18 a meal break penalty for non-compliance with California meal break requirements. 19 44. 20 periods as required by California law 21 45. 22 23 24 25 26 27 28 Plaintiff, on behalf of herself and Class Members, realleges and incorporates by reference Pursuant to California law, Kindred was and/or is the employer of Plaintiff and Class Cal. Lab. Code §§ 226.7, 512, Wage Order 4 and 5 and corresponding California Code of Kindred did not provide Plaintiff and Class Members with 30-minute duty-free meal Accordingly, pursuant to Cal. Lab. Code § 226.7, Wage Order 4 and/or 5 and corresponding California Code of Regulations, Plaintiff and Class Members are entitled one hour of pay at their regular rate of pay for each day on which the Class Member was not provided with a 30-minute duty-free meal period, plus interest. // // // SECOND AMENDED COMPLAINT – CASE NO.: 19-CV-02494-YGR 11 1 X. FOURTH CLAIM 2 3 4 Failure to Authorize and Permit Compliant Rest Periods Cal. Lab. Code § 226.7, Wage Order 4 and/or 5 and Corresponding California Code of Regulations 5 6 7 8 9 46. Plaintiff, on behalf of herself and Class Members, realleges and incorporates by reference the allegations in the preceding paragraphs as if fully alleged herein. 47. Pursuant to California law, Kindred was and/or is the employer of Plaintiff and Class Members. 10 48. Wage Order 4 and 5 and corresponding California Code of Regulations require 11 employers to authorize and permit all employees to take one 10-minute duty-free rest period for 12 every four hours worked each day, or major fraction thereof and require employers to pay a rest 13 break penalty for non-compliance with California rest break requirements. 14 49. 15 with 10-minute duty-free rest periods as required by California law. 16 50. 17 corresponding California Code of Regulations, Plaintiff and Class Members are entitled one hour 18 of pay at their regular rate of pay for each day on which the Class Member was not provided 19 with a 10-minute duty-free rest period, plus interest. Kindred did not provide Plaintiff and Class Members or an identifiable subset thereof Accordingly, pursuant to Cal. Lab. Code § 226.7, Wage Order 4 and/or 5 and 20 XI. FIFTH CLAIM 21 Failure to Pay Wages When Due 22 23 24 25 26 27 28 Cal. Lab. Code §§ 201, 202, 203, 204 51. Plaintiff, on behalf of herself and Class Members, realleges and incorporates by reference the allegations in the preceding paragraphs as if fully alleged herein. 52. Pursuant to California law, Kindred was and/or is the employer of Plaintiff and Class Members. 53. Cal. Lab. Code § 201 states that if an employer discharges an employee, the wages SECOND AMENDED COMPLAINT – CASE NO.: 19-CV-02494-YGR 12 1 2 3 4 5 6 7 8 9 earned and unpaid at the time of discharge are due and payable immediately. Cal Lab. Code § 202 states If an employee not having a written contract for a definite period quits his or her employment, his or her wages shall become due and payable not later than 72 hours thereafter, unless the employee has given 72 hours previous notice of his or her intention to quit, in which case the employee is entitled to his or her wages at the time of quitting. Cal. Lab. Code § 204 require wages be due at least twice during each calendar month. 54. Kindred failed to timely pay Plaintiff and Class Members or an identifiable subset thereof all of their wages earned during their employment and upon the termination of their respective 10 employment relationships with Kindred. 11 55. 12 to waiting time penalties. Accordingly, pursuant to Cal. Lab. Code § 203, Plaintiff and Class Members are entitled 13 XII. SIXTH CLAIM 14 Failure to Keep Accurate Employment Records 15 Cal. Lab. Code §§ 226, 1174, 1174.5, Wage Order 4 and/or 5 and Corresponding California 16 Code of Regulations 17 56. 18 the allegations in the preceding paragraphs as if fully alleged herein. 19 57. 20 Members. 21 58. 22 23 24 25 26 27 28 Plaintiff, on behalf of herself and Class Members, realleges and incorporates by reference Pursuant to California law, Kindred was and/or is the employer of Plaintiff and Class Labor Code § 1174(d) requires that every employer in California maintain “payroll records showing the hours worked daily by and the wages paid to, and the number of piece-rate units earned by and any applicable piece rate paid to, employees employed” in California. In addition, Cal. Lab. Code § 1174(d) requires that these records “be kept in accordance with rules established for this purpose by the [Industrial Welfare] commission.” 59. Rules established by the Industrial Welfare Commission, Wage Order 4 and 5, § 7, and the corresponding California Code of Regulations require that every employer in California SECOND AMENDED COMPLAINT – CASE NO.: 19-CV-02494-YGR 13 1 2 3 4 5 6 7 8 9 “keep accurate information with respect to each employee,” including without limitation, “time records showing when the employee begins and ends each work period,” as well as “[m]eal periods, split shift intervals and total daily hours worked.” 60. Cal. Lab. Code § 226 requires employers to keep information specified by Cal. Lab. Code § 226(a). 61. Kindred failed to maintain accurate records in compliance with Cal. Lab. Code § 1174(d), § 226, Wage Order 4 and/or 5 and corresponding California Code of Regulations for Plaintiff and Class Members. 10 62. Accordingly, Plaintiff and Class Members are entitled to collect and seek a civil penalty 11 from Kindred pursuant to Cal. Lab. Code § 1174.5 and/or § 226. 12 XIII. SEVENTH CLAIM 13 Unlawful, Unfair, or Fraudulent Business Practices 14 Cal. Bus. & Prof. Code § 17200, et seq. 15 63. 16 the allegations in the preceding paragraphs as if fully alleged herein. 17 64. 18 Members. 19 65. 20 and/or corresponding California Code of Regulations constitute unlawful, unfair and/or 21 fraudulent business practices prohibited by California Business & Professions Code § 17200, et 22 23 24 25 26 27 28 Plaintiff, on behalf of herself and Class Members, realleges and incorporates by reference Pursuant to California law, Kindred was and/or is the employer of Plaintiff and Class Kindred’s violations of the above cited Labor Code provisions, Wage Order 4 and/or 5 seq. and are independently actionable under California Business & Professions Code § 17200, et seq. 66. As described above, Kindred’s violations of the California Labor Code, Wage Order 4 and/or 5 and/or corresponding California Code of Regulations caused Plaintiff and Class Members irreparable harm, and Plaintiff and Class Members are therefore entitled to restitution in the amount of this harm, as well as injunctive and declaratory relief. SECOND AMENDED COMPLAINT – CASE NO.: 19-CV-02494-YGR 14 1 2 3 4 5 67. Plaintiff are further entitled to, and do, seek a declaration that the above described business practices are unlawful, unfair and/or fraudulent and also seek injunctive relief restraining Kindred from engaging in any of these unlawful, unfair and/or fraudulent business practices. XIV. EIGHTH CLAIM 6 Penalties Pursuant to the Labor Code Private Attorneys General Act of 2004 7 (Representative Action) 8 9 68. Plaintiff, on behalf of “All persons who are or were employed by one or more Kindred- 10 Affiliated Entities as non-exempt Skilled Clinicians to work at a skilled nursing facility in 11 California at any time from February 14, 2018 through September 1, 2020”, realleges and 12 incorporates by reference the allegations in the preceding paragraphs as if fully alleged herein. 13 69. 14 provisions that may be recovered through a civil action brought by an aggrieved employee. 15 70. 16 by Cal. Lab. Code § 2699(c) because they suffered injury as a result the following Labor Code 17 violations committed by Kindred: Cal. Lab. Code §§ 201, 202, 203, 204 (failure to pay SCs 18 wages when due); § 226 (failure to provide SCs with properly itemized statements); §§ 226.7, 19 512 (failure to provide or authorize and permit SCs with uninterrupted, duty-free meal and rest 20 periods); §§ 510, 1194, 1197, and 1198 (failure to pay SCs wages for hours worked, including 21 but not limited to overtime hours)); §§ 226, 1174, 1174.5 (failure to maintain employment and/or 22 23 24 25 26 27 28 Cal. Lab. Code § 2699 provides for civil penalties for violations of California Labor Code Plaintiff and all current and former SCs in California are aggrieved employees as defined payroll records). 71. Plaintiff has complied with the notice requirement of Cal. Lab. Code § 2699.3 by sending written notice by certified mail to Defendant and electronic notice to the California Labor & Workforce Development Agency (“LWDA”) with respect to all Labor Code, Industrial Welfare Commission Wage Order and California Code of Regulations violations asserted in this Complaint. SECOND AMENDED COMPLAINT – CASE NO.: 19-CV-02494-YGR 15 1 2 3 4 5 6 7 72. It has been 65 days or more since the LWDA was notified of certain Labor Code violations asserted in this Complaint, and the LWDA has not provided any notice that it will or will not investigate the alleged violations of which it was informed. 73. Kindred has not cured the Labor Code violations of which it was informed. 74. As a result, Plaintiff are entitled to recover, and seek, civil penalties, attorney fees, and costs of suit herein. PRAYER FOR RELIEF 8 9 10 75. Plaintiff, on behalf of themselves and the members of each putative class, pray for relief as follows: 11 a. Certification of this action as a class action as described herein; 12 b. Designation of Plaintiff as representatives of the putative class; 13 c. Designation of Plaintiff’s Counsel as Class Counsel for the putative class; 14 d. Damages (including liquidated damages) for failure to pay minimum, straight 15 time and/or overtime wages, failure to provide meal periods, and failure to 16 authorize and permit rest periods; 17 e. 18 In the alternative to such damages, restitution pursuant to Cal. Bus. & Prof. Code § 17200, et seq. 19 f. Statutory penalties, including pursuant to Cal. Lab. Code §§ 226, 203, and 1174.5; 20 g. Civil penalties pursuant to the Labor Code Private Attorneys General Act of 2004; 21 h. Injunctive and declaratory relief pursuant to Cal. Bus. & Prof. Code § 17200, et 22 23 seq.; i. 24 25 26 27 28 Pre-judgment and post-judgment interest pursuant to the California Labor Code and Cal. Civ. Code § 3287; j. Declaratory relief; k. Attorneys’ fees as provided by the California Labor Code, or as provided by the parties’ agreement, if any; SECOND AMENDED COMPLAINT – CASE NO.: 19-CV-02494-YGR 16 1 l. 2 54-3, and/or Cal. Code Civ. P. § 1021, or as provided by the parties’ agreement, if 3 any; and 4 5 Costs as provided by the California Labor Code, Fed. R. Civ. P. 54(d), Local Rule m. Any other relief the Court deems proper. DEMAND FOR JURY TRIAL 6 7 Plaintiff, by and through her attorney, hereby request a jury trial on all issues so triable. 8 9 Dated: October 1, 2020 LAW OFFICE OF MATTHEW D. CARLSON 10 11 12 By: _/s/ Matthew D. Carlson___ ______ Matthew D. Carlson Attorney for Plaintiff 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 SECOND AMENDED COMPLAINT – CASE NO.: 19-CV-02494-YGR 17 Exhibit C NOTICE OF PAGA AND CLASS ACTION SETTLEMENT UNITED STATES DISTRICT COURT, NORTHERN DISTRICT OF CALIFORNIA SARAH STONEHOCKER, on behalf of herself CASE NO.: 4:19-cv-02494-YGR and all others similarly situated, Plaintiff, NOTICE OF PAGA AND CLASS ACTION SETTLEMENT v. KINDRED HEALTHCARE OPERATING, LLC, KINDRED REHAB SERVICES, LLC, KINDRED REHAB SERVICES, INC., REHABCARE GROUP EAST, LLC, REHABCARE GROUP EAST, INC., REHABCARE GROUP OF CALIFORNIA, LLC, AMERICAN VITALCARE LLC and DOES 1 through 25 inclusive, Defendants.   <<FIRST AND LAST NAME>> <<ADDRESS>> <<CITY AND ZIP CODE>> To: All persons who are or were employed by Defendants Kindred Healthcare Operating, LLC, Kindred Rehab Services, LLC, Kindred Rehab Services, Inc., RehabCare Group East, LLC, RehabCare Group East, Inc., American VitalCare LLC or RehabCare Group of California, LLC as non-exempt Skilled Clinicians at a skilled nursing facility in California at any time from February 14, 2015 through September 1, 2020. PLEASE READ THIS NOTICE CAREFULLY. YOUR RIGHTS MAY BE AFFECTED. YOU MAY BE ENTITLED TO RECEIVE MONEY FROM THIS PROPOSED SETTLEMENT. TO RECEIVE YOUR SHARE OF THIS SETTLEMENT, YOU DO NOT NEED TO DO ANYTHING. This Notice is Court Approved. This is not a solicitation from an attorney. 1. WHY DID I GET THIS NOTICE? You received this Notice because a proposed settlement (the “Settlement”) has been reached in the class action and representative lawsuit entitled Sarah Stonehocker, on behalf of herself and all others similarly situated, vs. Kindred Healthcare Operating, LLC, et al. which is 1 pending in the United States District Court for the Northern District of California as Case No. 4:19cv-02494-YGR (hereinafter referred to as the “Action”). The Notice explains the nature of the Action, the general terms of the proposed Settlement, and your legal rights and obligations. To obtain more information about the Settlement, including information about how you can see a copy of the Settlement Agreement, see Section 17, below. 2. WHAT IS THE ACTION ABOUT? This Action alleges that Defendants Kindred Healthcare Operating, LLC, Kindred Rehab Services, LLC, Kindred Rehab Services, Inc., RehabCare Group East, LLC, RehabCare Group East, Inc., American VitalCare, LLC and RehabCare Group of California, LLC (collectively referred to as “Defendants”) violated applicable provisions of the California Labor Code, the California Business and Professions Code and the California Industrial Welfare Commission’s (the “IWC”) Wage Orders including the following: (1) Failure to Pay Minimum Wage, Straight Time and/or Overtime Wages [Cal. Labor Code §§ 510, 1194, 1197, 1198; Wage Order Nos. 4 and 5; and corresponding California Code of Regulations]; (2) Failure to Furnish Accurate Wage Statements [Cal. Labor Code § 226]; (3) Failure to Provide Compliant Meal Periods [California Labor Code §§ 226.7 and 512; Wage Order Nos. 4 and 5; and corresponding California Code of Regulations]; (4) Failure to Authorize and Permit Compliant Rest Periods [California Labor Code § 226.7 and Wage Order Nos. 4 and 5; and corresponding California Code of Regulations]; (5) Failure to Pay Wages When Due [California Labor Code §§ 201, 202, 203 and 204] (6) Failure to Keep Accurate Employment Records [California Labor Code §§ 226, 1174, 1174.5; Wage Order Nos. 4 and 5; and corresponding California Code of Regulations] (7) Unlawful, Unfair, or Fraudulent Business Practices (California Business & Professions Code § 17200 et seq.); and (8) Penalties Pursuant to the Labor Code Private Attorneys General Act of 2004 (“PAGA”) [Cal. Labor Code § 2698 et seq.]. Defendants deny all allegations of wrongdoing and maintains that they complied at all times with applicable laws, rules, and regulations at issue in this litigation. The Parties engaged in contested litigation, including discovery of hundreds of pages of documents over the Class Period, including documents and information concerning Defendants’ timekeeping; meal period and rest break policies; Defendants’ communications, training materials, procedures for managing payment for all hours worked; and time and payroll data. The Parties engaged in motion practice before the Court, and participated in extensive settlement negotiations, including a private mediation. Those negotiations led to an agreement to settle the case, which was memorialized in a formal Joint Stipulation and Class and Representative Action Settlement Agreement and Release. The Court has approved the PAGA portion of the Settlement and preliminarily approved the Class portion of the Settlement. The Court has not ruled on the merits of the lawsuit. 3. WHAT IS A CLASS ACTION? In a class action lawsuit, one or more persons sue on behalf of other people who have similar claims. Plaintiff Sarah Stonehocker (hereinafter “Plaintiff”) is the person who is bringing this Action on your behalf and on behalf of other similarly situated employees. 2 In the Action, Plaintiff seeks to represent you on a class basis. A class action allows the Court to resolve the claims of all the members of the Class at the same time. A class member is bound by the determination or judgment entered in the case, whether the class wins or loses, and may not file his or her own lawsuit on the same claims that were decided in the class action. A class action allows one court to resolve all of the issues in a lawsuit for all the members of the Class who choose not to exclude themselves from the class. 4. WHO IS INCLUDED IN THE SETTLEMENT CLASS? All persons who are or were employed by one or more Defendants as non-exempt Skilled Clinicians at a skilled nursing facility in California at any time from February 14, 2015 through September 1, 2020 (the “Class”). The period from February 14, 2015 through September 1, 2020 is the “Class Period.” The term “Skilled Clinicians” mean all individual who have held one or more of the following positions: CERT OCCUP THERA ASST PRN, CERT OCCUP THERAPY ASST, OCCUPATIONAL THER PRN, OCCUPATIONAL THERAPIST, LEAD RT – VITALCARE, PHYSICAL THERAPIST, PHYSICAL THERAPIST PRN, PHYSICAL THERAPY ASST, PHYSICAL THERAPY ASST PRN, PROGRAM DIR I SLP, PROGRAM DIRECTOR I, PROGRAM DIRECTOR I COTA, PROGRAM DIRECTOR I OT, PROGRAM DIRECTOR I PT, PROGRAM DIRECTOR I PTA, PROGRAM DIRECTOR I SLP, RCL OT, RCL OTA, RCL PT, RCL PTA, RCL SLP, REHAB COORD OT, REHAB COORD OT PRN, REHAB COORD PT, REHAB COORD PT PRN, REHAB COORD PTA, REHAB COORD SLP, REHAB COORD SLP PRN, RESPIRATORY THERAPIST, RESPIRATORY THERAPIST PRN, RESPIRATORY THERAPIST – VC, SP LANG PATHOLOGIST PRN, SPEECH LANG PATH CFY, SPEECH LANG PATH CFY PRN, SPEECH LANG PATH PRN, and/or SPEECH LANG PATHOLOGIST. The identities of the members of the Class have been ascertained from records of Defendants. You are receiving this Notice because such records show that you are a member of the Class. 5. WHAT ARE THE BENEFITS OF SETTLEMENT TO THE CLASS? Plaintiff, on one hand, and Defendants, on the other hand, disagree as to whether there is any liability, including but not limited to: (1) whether the case is appropriate for treatment as a class or representative action; (2) whether the settlement Class is owed any unpaid wages, premiums, or penalties; and (3) the amount of unpaid wages, premiums, or penalties owed, if any. Defendants raised numerous defenses to Plaintiff’s claims and those defenses could significantly reduce or even eliminate any liability or damages owed to the Class. Accordingly, there were significant risks to the Class associated with continuing the lawsuit and significant benefits to settling the lawsuit short of trial. The Settlement was negotiated by the Parties after thorough examination of time and payroll records. Having considered the benefits and risks associated with further litigation, counsel for Plaintiff (“Class Counsel”) determined that settlement of the case under the terms described in this Notice is a fair and reasonable compromise that is in the best interests of the Class. Finally, there was a hearing on [insert Preliminary Approval Date] in the United States District Court in the Northern District of California, at which time the Court approved the PAGA portion of the Settlement and preliminarily approved the Class portion of the Settlement as being fair and reasonable to the members of the Class. 3 6. WHAT ARE THE TERMS OF THE PAGA SETTLEMENT? In bringing this lawsuit, Plaintiff is seeking, among other things, civil penalties pursuant to the Labor Code Private Attorneys General Act (“PAGA”), a law which allows Plaintiff to stand in the shoes of the government and try and recover penalties on the government’s behalf and on behalf of those employees Plaintiff claims were “aggrieved” by Defendants’ alleged violation of California Labor laws, including claims for unpaid wages (including minimum, regular and overtime wages), untimely wage payments both during and at the end of employment, noncompliant meal periods, non-compliant rest periods, and non-compliant wage statements and employment records, and failure to pay penalties (including but not limited to waiting time and wage statement penalties) in connection with work performed by all persons who are or were employed by one or more Defendants as non-exempt Skilled Clinicians to work at a skilled nursing facility in California at any time from February 14, 2018 through September 1, 2020 (the “PAGA Releasees”). It is important to note that Defendants deny these claims and they further deny that they owe any penalties to the government or to you, and assert that they have fully complied with all applicable wage and hour laws. Nevertheless, to avoid further costs and time in defending the lawsuit, Defendants have agreed to settle the case. Defendants have agreed to pay a total of $1,995,000 (the “Gross Settlement Fund”) to settle all claims arising out of the lawsuit. The Court has approved the PAGA portion of the Settlement, and $130,000 of the Gross Settlement Fund is being paid to resolve the PAGA Claims described below (“PAGA Payment”). $97,500, or seventy-five percent (75%) of the PAGA Payment, will be paid to the California Labor and Workforce Development Agency, as required by law. $32,500, or twenty-five percent (25%) of the PAGA Payment will be paid to the PAGA Releasees. The PAGA Releasees will receive a payment representing their pro-rata share of the PAGA Payment (the “PAGA Payment Checks”). A PAGA Releasee’s portion of the PAGA Payment is based on the proportionate number of PAGA Pay Periods the PAGA Releasee worked as compared to the total number of PAGA Pay Periods worked by all PAGA Releasees. A “PAGA Pay Period” means the number of pay periods worked by PAGA Releasees for one or more Defendants during the PAGA Settlement Period as regularly recorded on Defendants’ payroll system. The “PAGA Settlement Period” means the period beginning on February 14, 2018 through September 1, 2020. Based on Defendants’ records, you [are not a PAGA Releasee and are not eligible to receive a portion of the PAGA Payment or you are a PAGA Releasee and had worked ___ PAGA Pay Periods between February 14, 2018 and September 1, 2020 and your estimated share of the PAGA Payment is $___]. If you will receive a PAGA Payment Check, 100% of the PAGA Payment Check is considered penalties and you may be issued an IRS Form 1099 for your share of the PAGA Payment. Any questions or disagreements regarding your PAGA Pay Periods or the amount of your PAGA Payment Check should be directed to the Settlement Administrator at the address listed in Section 17 below. 4 7. WHAT ARE THE TERMS OF THE CLASS PORTION OF THE SETTLEMENT? As stated above, Defendants have agreed to pay a total of $1,995,000 to settle all claims arising out of the Action. After the PAGA Payment, the remainder of the Gross Settlement Fund will be used to pay members of the Class for the settlement and release of the Settled Claims described below, settlement administration costs estimated to be no greater than $22,500, attorneys’ fees for Class Counsel estimated not to exceed $665,000, reasonable costs/expenses for Class Counsel not to exceed $15,000, and a “service award” to Plaintiff as the Class Representative not to exceed $5,000. The balance of the settlement (the “Net Settlement Fund”) will be distributed to members of the Class who do not timely and properly opt out (the “Plaintiff Class Members”). The Plaintiff Class Members will receive a payment representing their pro-rata share of the Net Settlement Amount (the “Individual Settlement Payments”). A Plaintiff Class Member’s Individual Settlement Payment is based on the proportionate number of the Class Pay Periods the Plaintiff Class Member worked as compared to the total number of Class Pay Periods worked by all Plaintiff Class Member. A “Class Pay Period” means the number of pay periods worked by Class Members for one or more Defendants during the Settlement Period as regularly recorded on Defendants’ payroll system. The “Settlement Period” means the period beginning on February 14, 2015 through September 1, 2020. Based on Defendants’ records, you had worked ___ Class Pay Periods between February 14, 2015 and September 1, 2020 and your estimated share of the Individual Settlement Payment is $___. 20% of the Individual Settlement Payment will be considered wages, and will be reported on an IRS Form W-2, and 80% of the Individual Settlement Payment will be considered civil penalties and interest, and will be reported on an IRS Form 1099 misc., if required. 8. WHAT DO I NEED TO DO TO RECEIVE A SETTLEMENT PAYMENT? You do not need to do anything to participate in the Settlement. You will be mailed your PAGA Settlement Payment (if applicable) and Individual Settlement Payment from this Settlement approximately 70 days after the Final Approval Hearing on [Date of Final Approval Hearing], if the Court approves the Class Settlement and no appeals are filed. Class Counsel have been appointed and approved by the Court and Class Counsel will represent you. You also will be bound by the Settlement, including the release of claims stated above. Upon receipt of your settlement checks, it will be your responsibility to cash the checks before the expiration date of the checks (90 days after mailing). You will not be retaliated against for cashing your settlement checks. Any funds payable to Plaintiff Class Members and/or PAGA Releasees whose checks are not cashed within 90 days after mailing will be transferred by the Settlement Administrator to a court-approved cy pres beneficiary. The Parties have proposed the First Responders Children’s Foundation COVID-19 Emergency Response Fund, an organization that provides financial and other support to COVID-19 first responders, including skilled clinicians at skilled nursing facilities who provide care to COVID-19 patients, and their families, to be the cy pres beneficiary. The failure to cash any check within 90 days after mailing does not affect the binding nature of the Settlement or the binding nature of any release of claims. 5 You may dispute your Individual Settlement Payment and your share of the PAGA Payment by following the below instructions. Your Individual Settlement Payment award is based on the proportionate number of Class Pay Periods. Your share of the PAGA Payment is based on the proportionate number of PAGA Pay Periods. The information contained in Defendants’ records regarding this information, along with your estimated Individual Settlement Payment and your estimated share of the PAGA Payment, is listed above. If you disagree with the number of Class Pay Periods and/or the number of PAGA Pay Periods, you may submit a written challenge. For the challenge to be deemed valid, it must include: (i) the full name of the person making the challenge; (ii) a statement that the person seeking the challenge are seeking to challenge his or her estimated Individual Settlement Payment and/or PAGA Payment Check set forth in the Class Notice; (iii) state the number of Class Pay Periods the person seeking the challenge believes he or she has worked between February 14, 2015 and September 1, 2020 and/or the number of PAGA Pay Periods the person seeking the challenge believes he or she has worked between February 14, 2018 and September 1, 2020; (iv) include documentation to support the challenge (such as paystubs, cancelled checks, etc.); and (v) the person seeking the challenge must sign the document. All such challenges must be mailed to the Settlement Administrator at the address listed in Section 17 below with a postmark date on or before [insert date]. Please be advised that the number of Class Pay Periods and PAGA Pay Periods stated in this Notice is presumed to be correct unless the documents you submit prove otherwise. DO NOT SEND ORIGINALS; DOCUMENTATION SENT TO THE SETTLEMENT ADMINISTRATOR WILL NOT BE RETURNED OR PRESERVED. The Parties and the Settlement Administrator will evaluate the evidence submitted and discuss in good faith how to resolve any disputes submitted by Class Members and/or PAGA Releasees. Defendants’ personnel records, including payroll records, will be considered by the Settlement Administrator and the Parties as the presumptive best evidence of the number of Class Pay Periods and the number of PAGA Pay Periods. 9. HOW DOES THE SETTLEMENT AFFECT MY RIGHTS? The Settlement is intended to settle and fully release and discharge any and all claims against Defendants, RehabCare Group Management Services, LLC, RehabCare Group, Inc., RehabCare Hospital Holdings, L.L.C., and any of its or their past, present and future direct or indirect parents, subsidiaries, affiliates and any skilled nursing facility clients as to whom any Class Member or PAGA Releasee may have provided services through any or all Defendants as well as each of its or their past, present and future officers, directors, employees, partners, members, shareholders and agents, attorneys, insurers, reinsurers, and any individual or entity which could be jointly liable with any or all Defendants (collectively referred to as the “Released Parties”) from any and all PAGA Claims (defined below) and Released Claims (defined below) to the maximum extent permitted by law. Upon the entry of the Final Approval Order and to the maximum extent permitted by law, Plaintiff and all Plaintiff Class Members (i.e., all Class Members who do not properly opt-out) and all persons purporting to act on the Plaintiff Class Members’ behalf or purporting to assert a claim under or through them, hereby do and shall be deemed to have fully, finally, and forever released, settled, compromised, relinquished, and discharged any and all of the Released Parties of and from 6 all disputes, claims and/or causes of action pleaded or which could have been pleaded arising, in whole or in part, from the facts, claims and/or allegations contained in the Complaint, the First Amended Complaint, the Second Amended Complaint, and/or the PAGA Notice during the Settlement Period, including the following: a. Any claims for unpaid wages (including minimum, regular and overtime wages), untimely wage payments both during and at the end of employment, non-compliant meal periods, non-compliant rest periods, non-compliant wage statements, noncompliant recordkeeping, and claims for interest, penalties (including but not limited to waiting time penalties), or premiums in connection therewith, as well as any claims under the Fair Labor Standards Act, the California Labor Code, California Industrial Welfare Commission Wage Orders and corresponding California Code of Regulations, alleged or which could have been alleged based, in whole or in part, on the facts, allegations and/or claims pleaded in the Complaint, the First Amended Complaint or the Second Amended Complaint in this Action or the PAGA Notice; b. Any claims for injunctive relief, declaratory relief, restitution, fraudulent business practices or punitive damages alleged or which could have been alleged based, in whole or in part, on the facts, allegations and/or claims pleaded in the Complaint, the First Amended Complaint or the Second Amended Complaint in this Action or the PAGA Notice; and c. Any and all other claims under California common law, the California Labor Code including but not limited to the Private Attorneys General Act, the Fair Labor Standards Act, California Industrial Welfare Commission Wage Orders, corresponding California Code of Regulations, and the California Business and Professions Code alleged in or that could have been alleged under the allegations and/or claims pleaded in Complaint, the First Amended Complaint or the Second Amended Complaint in this Action or the PAGA Notice. The above claims will be collectively referred to as the “Released Claims” or “Settled Claims.” Plaintiff Class Members will receive an Individual Settlement Payment check containing the following language: “I understand that by cashing, depositing, or otherwise negotiating this check I will be deemed to have opted into Sarah Stonehocker, on behalf of herself and all others similarly situated, vs. Kindred Healthcare Operating, LLC et al., Case No. 4:19-cv-02494-YGR for purposes of the federal Fair Labor Standards Act (FLSA) release to the extent required to do so under applicable law for purposes of the court-approved settlement therein.” The Plaintiff Class Members are bound by the release of the Settled Claims in its entirety regardless of whether they cash their Individual Settlement Payment check. Upon the Court’s approval of the PAGA Payment and release of PAGA Claims, but contingent upon entry of the Final Approval Order, Plaintiff and the PAGA Releasees and all persons purporting to act on the PAGA Releasees’ behalf or purporting to assert a claim under or through them, hereby do and shall be deemed to have fully, finally, and forever released, settled, compromised, relinquished and discharged any and all of the Released Parties of and from any and all PAGA claims premised in whole or in part on any of the Settled Claims during the PAGA Settlement Period (collectively, the “PAGA Claims”). The PAGA Releasees will not have the 7 opportunity to opt out of, or object to, the PAGA Payment and release of the PAGA Claims set forth in this Paragraph. The PAGA Releasees are bound by the release of the PAGA Claims regardless of whether they cash their PAGA Payment Check. If you are a member of the Class and you do not elect to properly and timely opt out from the class portion of the Settlement, you will be deemed to have released the above-described Released Claims. However, you will still be bound by the release of the PAGA Claims regardless of whether or not you opt out of the Class or cash your PAGA Settlement Payment. If the entire Settlement is not approved by the Court or does not become final for some other reason, the litigation will continue. 10. WHAT IF I DON’T WANT TO PARTICIPATE IN THIS SETTLEMENT? PAGA Releasees will not have the opportunity to opt out of the PAGA Payment and/or release of PAGA Claims. However, if you do not want to be bound by the remaining terms of the settlement, including receipt of the above Individual Settlement Payment and the above release of the Released Claims, you may exclude yourself (“opt out”) by sending written notice of your intention to opt out to the Settlement Administrator at the address listed in Section 17 below. The opt-out request must be in writing and include (i) your full name; (ii) a statement that you request exclusion from the Class and does not wish to participate in the Class Settlement; and (iii) your signature. Any opt-out request must be postmarked no later than [insert date of the close of the Notice Period]. Should you choose to timely exclude yourself from the class portion of the Settlement, the money that you would have otherwise received from the class portion of the Settlement will be distributed amongst the remaining participating Plaintiff Class Members. However, to the extent you are eligible to receive a portion of the PAGA Payment, you will still receive that amount whether or not you submit an Opt-Out Request. This is because there is no right to be excluded from the release of PAGA Claims that is part of this Settlement. 11. WHAT IF I WANT TO OBJECT TO THIS SETTLEMENT? Any member of the Class who has not opted out can ask the Court to deny approval of the settlement by filing an objection. You can’t ask the Court to order a larger settlement; the Court can only approve or deny the settlement. If the Court denies approval, no settlement payments will be sent out and the lawsuit will continue. You may object to the proposed settlement in writing, except you may not object to the PAGA Payment and release of PAGA Claims. You may also appear at the Final Approval Hearing, either in person or through your attorney. If you appear through your own attorney, you are responsible for paying that attorney. All written objections and supporting papers must (a) clearly identify the case and number (Stonehocker v. Kindred Healthcare Operating, LLC, Case No. 4:19-cv-02494-YGR), (b) be submitted to the Court either by mailing them to the Class Action Clerk, United States District Court for the Northern District of California, 1301 Clay Street, Suite 400 S, Oakland, CA 94612, 8 or by filing them in person at any location of the United States District Court for the Northern District of California, and (c) be filed or postmarked on or before [insert date of the close of the Notice Period]. Class Members who fail to timely mail or file such a written statement of objection shall be foreclosed from making any objection to this Settlement 12. WILL THE NAMED PLAINTIFF BE COMPENSATED FOR BRINGING THIS LAWSUIT? Plaintiff will request a service award of up to $5,000 for her service as Class Representative and for her efforts in bringing the Action. The Court will make the final decision as to the amount to be paid to Plaintiff. 13. DO I HAVE A LAWYER IN THIS CASE? Yes. The Court has ordered that the interest of Plaintiff and the Class are represented by counsel for Plaintiff as follows: MATTHEW D. CARLSON, Bar No. 273242 mdcarlson@mdcarlsonlaw.com LAW OFFICE OF MATTHEW D. CARLSON 50 Fountain Plaza, Suite 1400, #206 Buffalo, NY 14202 Telephone: (716) 242-1234 (“Class Counsel”). You will not be separately charged for this attorney. If you want to be represented by your own lawyer, you may hire one at your own expense. If you have questions about the case or the Settlement, you should ask Class Counsel. 14. WHAT IS THE FINAL APPROVAL HEARING? The Court has approved the PAGA portion of the Settlement and preliminarily approved the class portion of the Settlement. The Court will hold a hearing to decide whether to give final approval to the class portion of the Settlement. The purpose of the Final Approval Hearing will be for the Court to determine whether the class portion of the Settlement should be approved as fair, reasonable, adequate, and in the best interests of the Class; to consider the award of attorneys’ fees and expenses to Class Counsel; and to consider the request for enhancement award to Plaintiff. 15. WHEN AND WHERE IS THE FINAL APPROVAL HEARING? The Court will hold the Final Approval Hearing on [insert date] at [insert time] a.m., in Courtroom 1 on the Fourth Floor of the Ronald V. Dellums Federal Building and United States Courthouse, which is located at 1301 Clay Street, Oakland, CA 94612 (“Final Approval Hearing”). The Final Approval Hearing may be continued without further notice to the Class. It is not necessary for you to appear at the Final Approval Hearing unless you have timely filed an objection with the Court. However, you have the right to attend the Final Approval Hearing and be 9 represented by your own counsel at your own expense. If you plan to attend the Final Approval Hearing, you may contact Class Counsel to confirm the date and time. 16. MAY I SPEAK AT THE FINAL APPROVAL HEARING? At the hearing, the Court will be available to hear any objections and arguments concerning the Settlement. You may attend, but you do not have to attend. You may speak at the Final Approval Hearing only if (a) you have timely served and filed an objection, and (b) followed the procedures set forth in Section 11 above to provide notice that you intend to speak at the Final Approval Hearing. If you opt out from the class portion of the Settlement, however, you may not speak at the Final Approval Hearing. 17. HOW DO I GET MORE INFORMATION? This Notice summarizes the proposed settlement. For the precise terms and conditions of the settlement, please see the Joint Stipulation and Class and Representative Action Settlement Agreement and Release, the Complaints and the PAGA Notice available by contacting Class Counsel at the address or telephone number set forth above, by accessing the Court docket in this case through the Court’s Public Access to Court Electronic Records (PACER) system at https://ecf.cand.uscourts.gov, or by visiting the office of the Clerk of the Court for the United States District Court for the Northern District of California, Ronald V. Dellums Federal Building and United States Courthouse, 1301 Clay Street, Suite 400 S, Oakland, CA 94612, between 9:00 a.m. and 4:00 p.m., Monday through Friday, excluding Court holidays. IF YOU NEED MORE INFORMATION OR HAVE ANY QUESTIONS, you may also contact the Settlement Administrator at the address and telephone number listed below, toll free. Please refer to the “Stonehocker vs. Kindred Healthcare Operating, LLC Class Action Settlement.” [INSERT NAME AND CONTACT INFORMATION OF SETTLEMENT ADMINISTRATOR] ALL DISPUTES CONCERNING CLASS PAY PERIODS AND/OR PAGA PAY PERIODS AS WELL AS OPT-OUT REQUESTS MUST BE MAILED TO THE SETTLEMENT ADMINISTRATOR AT THE ADDRESS LISTED ABOVE. ALSO, ALL QUESTIONS AND INQUIRIES REGARDING ADMINISTRATION OF THE SETTLEMENT MAY BE DIRECTED TO THE SETTLEMENT ADMINISTRATOR. 18. WHAT IF MY INFORMATION CHANGES? It is your responsibility to keep a current address and telephone number on file with the Settlement Administrator, to ensure receipt of your settlement checks for the Individual Settlement Payment and PAGA Payment Check and applicable tax forms if the settlement is given final approval by the Court. If you change your mailing address, you should promptly contact the Settlement Administrator and provide the Settlement Administrator your new address and contact information. 10 DO NOT ADDRESS ANY QUESTIONS ABOUT THE SETTLEMENT OR THE LITIGATION TO THE CLERK OF THE COURT OR THE JUDGE 4842-2052-8071.7 11

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