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Posts Tagged ‘United States District Court for the Northern District of California’

Northern District Denies Certification of Joe’s Crab Shack Meal and Rest Break Class Action

In 23(b)(2) Class, Certification, Class Actions, Meal and Rest Breaks, Overtime, Uniform on January 1, 2011 at 3:21 pm
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The Northern District of California denied class certification of a meal and rest break class action in Washington v. Joe’s Crab Shack, No. C 08-5551 PJH, 2010 WL 5396041 (N.D. Cal Dec. 23, 2010.) (slip op.).  Plaintiff Drew Garrett Washington asserted that defendant Crab Addison, Inc. (“Crab Addison”), a company that operates a number of Joe’s Crab Shack restaurants, failed to provide employees with meal and rest breaks, allowed its restaurant managers to manipulate employee time records to deprive employees of pay for all hours worked (including overtime and missed meal break pay), required employees to perform work “off the clock”; and required employees to pay for their own employer-mandated uniforms.  Id. *1.

Class Definition

Plaintiff moved pursuant to Federal Rule of Civil Procedure 23, to certify a plaintiff class consisting of “all non-exempt restaurant employees employed by Crab Addison at Joe’s Crab Shack restaurants in California from January 1, 2007, through the present.”

Discussion

The court denied the certification motion.  Id. *11.  “Plaintiff’s position is that common questions predominate because the main issue is whether—notwithstanding Crab Addison’s written policies—Joe’s Crab Shack restaurants in California followed a common unwritten policy of denying meal and rest breaks, failing to pay employees who did not take breaks, failing to pay for overtime, requiring employees to purchase their own uniforms, and so forth.” Id. Plaintiff contended that the existence of a policy or practice that in effect contradicts Crab Addison’s written policies can be ascertained by an analysis of the data in Crab Addison’s computer systems.  Id. “But since plaintiff has failed to adequately explain how that analysis works and exactly what the data shows, he has failed to adequately establish the existence of such a policy or practice.” Id. Read the rest of this entry »

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Northern District Denies Production of Names of Non Opt-In Members of FLSA Collective and Labor Code Class Action

In Class Actions, Class Discovery, Class Notice, Collective Action, Discovery, FLSA, Opt-in on October 28, 2010 at 9:37 am
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The United States District Court for the Northern District of California denied the production of names, addresses and telephone numbers of non-opt-in members of a FLSA collective and putative Labor Code class action.  Hill v. R+L Carriers Shared Services, LLC, No. C 09-1907 CW (MEJ), 2010 WL 4175958 (N.D. Cal. Oct. 20, 2010).  Plaintiff Glenn Hill is a former employee of Defendant R+L Carriers Shared Services, LLC, which provides administrative employees to transportation companies all across the United States.  Id. *1. Plaintiff worked as a “dispatcher” at Defendant’s San Lorenzo terminal in California, and brought a collective and class action pursuant to the Fair Labor Standards Act (“FLSA”), California’s wage-and-hour laws and California Business & Professions Code section 17200. Id.

Background

Plaintiff sought two sub-classes: those employees in California and those that he refers to as a Nationwide Collective.  Id. The California Class is defined as “all persons who worked for any period of time in California who were classified as Dispatchers (including “City Dispatchers” and any other position(s) who are either called, or work(ed) as, dispatchers) in the four years prior to the filing of this Complaint, up through the final disposition of this action.” Id. In Defendant contended that a collective action under the FLSA is improper because the job duties, work schedules, and salary of its employees varies across the United States, as well as in the State of California. Id. Read the rest of this entry »

Judge Illston of Northern District Approves $3.5 Million Non-Reversionary Settlement of Meal and Rest Break Class Action, With Award of 25% of Fund in Attorneys Fees, and Incentive Award of $20,000 to Each Class Representative

In Attorney's Fees, Class Actions, Incentive Award, Meal and Rest Breaks, Settlement on October 6, 2010 at 9:25 am
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The Northern District of California granted final approval of a settlement in a meal and rest break class action in Ross v. US Bank National Association, No. C 07-02951 SI, 2010 WL 3833922 (N.D. Cal. Sept. 29, 2010).  The complaint was filed on behalf of all hourly employees who worked at a California U.S. Bank in-store branch.  See Memorandum of Points and Authorities in Support of Plaintiff’s Motion for Preliminary Approval of Class Action Settlement (“MPA”) at 1.  Plaintiffs alleged that they and other hourly paid employees have not been provided a legally compliant meal and rest period on Sundays and worked off the clock pre and post shift and during their meal breaks. Id. The parties settled the case, and the settlement agreement provides for the payment of compensation to each Participating Class Member based on his or her total workweeks in a Class position during a certain period.  Ross, 2010 WL 3833922, *1.   The court approved a non-reversionary settlement of $3,500,000 for approximately 3,300 settlement class members.  MPA at 2.

Attorneys’ Fees and Costs

Plaintiffs’ counsel sought an award of 30% of the settlement fund,  $1,050,000.00, as attorneys’ fees.  Ross, 2010 WL 3833922, *1.   Plaintiffs estimate that the total time spent litigating this case, including time overseeing claims administration, will be approximately 2647.7 hours.  Id. Plaintiffs’ counsel listed hourly rates ranging from $185 an hour to $650 an hour.  MPA at 14.  The court reduced the award to 25%: Read the rest of this entry »

After Bench Trial on UCL Claim, Northern District Finds “On-Job Supervisor” Properly Classified as Exempt Under Administrative Exemption

In Administrative, Exemptions on September 23, 2010 at 10:20 pm
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District Judge Susan Illston of the Northern District of California conducted a bench trial of plaintiff’s overtime claim under the Unfair Competition Law (“UCL”) and found that defendant UPS met its burden of proving that plaintiff was properly classified as falling within the administrative exemption in his role as “On-Job Supervisor”.  Lopez v. United Parcel Service, Inc., C 08-05396 SI, 2010 WL 3630619 (N.D. Cal. Sept. 14, 2010).

Background

Plaintiff Ben Lopez sued defendant United Parcel Service, Inc. (“UPS”) contending that UPS improperly classified him as an employee exempt from overtime compensation under California law. Id. *1. Read the rest of this entry »

Northern District Strikes Jury Demand in Wage & Hour Class Action for Failure to Timely Plead

In Jury on August 30, 2010 at 11:23 am
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The Northern District struck a jury trial demand in a putative wage and hour class action.  Rodriguez v. Sears Holding Corporation, No. 10-1268 SC, 2010 WL 3341656 (N.D. Cal. Aug. 24, 2010).  Plaintiff originally filed his complaint in Alameda Superior Court.  Id. *1.  Plaintiff was an employee of Defendants, and brought a putative class action on behalf of himself and others similarly situated for violations of various provisions of California’s Labor Code and Business and Professions Code, including failure to pay overtime wages, failure to allow and pay for meal and rest periods, failure to pay compensation upon discharge, and failure to provide proper wage statements. Id. Read the rest of this entry »

Northern District Approves $4.5 Million Settlement Against RadioShack in Expense Reimbursement Case, With $1.5 Million in Fees, and $5,000 Incentive Payments to Each Lead Plaintiff

In Attorney's Fees, Class Actions, Expense Reimbursement, Settlement on August 13, 2010 at 6:20 pm
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Magistrate Judge Edward M. Chen (whose confirmation to the Northern District of California bench has unfortunately been stalled for far too long) approved the class settlement and attorney fee application in Stuart v. RadioShack Corp., 2010 WL 3155645, No. C-07-4499 EMC (N.D. Cal. Aug. 9, 2010).

This class action was initiated in state court in June 2007, alleging that RadioShack had improperly failed to reimburse its employees for expenses they incurred in using their personal vehicles to perform inter-company transfers (“ICSTs”). Plaintiffs claimed for reimbursement pursuant to California Labor Code § 2802 and for a violation of California Business & Professions Code.  Subsequently Plaintiffs added a claim for recovery of penalties under the California Labor Code Private Attorneys General Act (“PAGA”).  The case was removed in August 2007. And in February 2009, Judge Chen granted the motion for class certification, certifying a class consisting of “all persons employed by RadioShack within the State of California, at any time from June 3, 2003, to the present, who drove their personal vehicles to and from RadioShack stores to carry out ICSTs and who were not reimbursed for mileage.”  On October 1, 2009–nine days before trial was scheduled to begin–the parties reached a settlement.

Under the Settlement Agreement, RadioShack will pay a total of $4.5 million for the release by the class, as an all-inclusive sum (proceeds to be distributed to the class, attorney’s fees and litigation expenses, costs of claim administration, incentive payments to the class representatives, and the PAGA award to the state), without reversion of any of the $4.5 million to RadioShack.

After attorney’s fees, litigation expenses, costs of claim administration, incentive payments, and the PAGA award to the state have been deducted from the $4.5 million, the remainder for distribution to the class members and/or donation to charity is $2,796,563.31.

Each class member’s award “depends on the number of weeks that the class member worked.”

The Court found that, importantly, “the amount available to the class after deductions for, e.g., fees and costs–i.e., $2,796,563.31–is not far off what the class might be awarded if it were to prevail on the merits after a trial.” Id. *4.

Plaintiffs’ counsel asked for an award of $1.5 million  (i.e., one-third of the total settlement amount), plus litigation expenses which total $78,436.69.

The Court has reviewed the expenses and determined that they are reasonable. The Court notes that the sum is not excessive given that this litigation has been ongoing for more than three years.

Attorneys Fees Application

The attorneys presented a fee application claiming $1.5 million as a lodestar for fees–excluding work performed in preparing for final approval and any post-judgment work that may be needed.  The $1.5 million sum represents 2,116.69 hours of work over a period of more than three years, at hourly rates of the billing attorneys ranging from $600 to $1,000.

After reviewing the billing records submitted by counsel as well as the declarations regarding the hourly rates of counsel, the court found that the number of hours was reasonable given the length of the lawsuit and the vigorous disputes over the course of the litigation (e.g., regarding RadioShack’s defense that it had no duty to reimburse until an employee made a request for reimbursement).

The court did express some “concerns about the $1,000 hourly rate” claimed by one of the attorneys.  “Based on the Court’s experience, this is an inordinately large hourly rate, even if the Court were to assume that [the attorney] has fifty years of experience.”  But the Court concluded that “given the 2,116.69 hours incurred, the average hourly rate for a fee award of $1.5 million total is $708, an amount that the Court deems appropriate, particularly when no multiplier is being sought on top of the lodestar.”

Compared to the percentage of the fund, the court noted that “the total settlement amount to be paid by RadioShack (with no possibility of reversion), the fee award represents one-third of the settlement amount.”  The court found that this was “well within the range of percentages which courts have upheld as reasonable in other class action lawsuits.”

The court also approved an incentive award of $5,000 for each of the two class representatives, for a total of $10,000.  The Court concluded that the incentive payments were appropriate and reasonable.  “Although the class representatives did not enter this litigation until late in the proceedings, due consideration must be given to the fact that they were willing and ready to go to trial.”  The court noted that if the “class representatives had asked for a larger sum, the Court might well have reached a different conclusion, but the $5,000 sought for each representative was viewed as “relatively modest.”

By CHARLES H. JUNG

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Ninth Circuit Holds That Contracts Expressly Acknowledging Independent Contractor Status “Simply Not Significant” Under California’s Test of Employment”

In Employee/Independent Contractor on August 2, 2010 at 6:12 pm
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In Narayan v. EGL, Inc., — F.3d —-, 2010 WL 2735708 (9th Cir. July 13, 2010), the Ninth Circuit decided whether, assuming the existence of an employer-employee relationship in California, the employer may avoid its obligations under the Labor Code by inserting a clause in an employer-drafted pre-printed form contract in which: (1) the employee acknowledges that he is an independent contractor and (2) agrees that the contract would be interpreted in accordance with the laws of another jurisdiction where such an agreement is generally enforceable.  Judge Ronald M. Whyte of the Northern District of California found that declarations in the underlying agreements stating that the drivers were independent contractors rather than employees compelled the holding that the plaintiffs were indeed independent contractors as a matter of law.  Id. at *2.  Consequently, the district court granted the employer’s motion for summary judgment.  The Ninth Circuit reversed.

EGL, the employer, is a global transportation, supply chain management and information services company incorporated under the laws of Texas and headquartered in Texas.  EGL’s services include, inter alia, “air and ocean freight forwarding, customs brokerage, [and] local pickup and delivery service.” Plaintiff drivers (the “Drivers”) were residents of California who were engaged to provide freight pick-up and delivery services for EGL in California. All three Drivers signed agreements with EGL for “Leased Equipment and Independent Contractor Services” (the “Agreements”). The Agreements provided that the “intention of the parties is to … create a vendor/vendee relationship between Contractor and [EGL],” and acknowledged that “[n]either Contractor nor any of its employees or agents shall be considered to be employees of” EGL. The terms of the Agreements provide, inter alia, that the Drivers “shall exercise independent discretion and judgment to determine the method, manner and means of performance of its contractual obligations,” although EGL retained the right to “issue reasonable and lawful instructions regarding the results to be accomplished.”  Id. at *1.

The Ninth Circuit noted the difficultly in overcoming the  Drivers’  prima facie case that the relationship was one of employer/employee. “This hurdle is particularly difficult for EGL to overcome in light of the second special consideration in this case, namely, the multi-faceted test that applies in resolving the issue whether the Drivers are employees.”  Id. at *4.

The Ninth Circuit described the multifactor approach to evaluating the:

indicia of an employment relationship, the most important of which is the “right to discharge at will, without cause.” Borello, 256 Cal.Rptr. 543, 769 P.2d at 404 (quoting Tieberg v. Unemployment Ins.App. Bd., 2 Cal.3d 943, 88 Cal.Rptr. 175, 471 P.2d 975, 979 (Cal.1970)). Borello endorsed other factors derived from the Restatement (Second) of Agency that may point to an employment relationship:  (a) whether the one performing services is engaged in a distinct occupation or business; (b) the kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the principal or by a specialist without supervision; (c) the skill required in the particular occupation; (d) whether the principal or the worker supplies the instrumentalities, tools, and the place of work for the person doing the work; (e) the length of time for which the services are to be performed; (f) the method of payment, whether by the time or by the job; (g) whether or not the work is a part of the regular business of the principal; and (h) whether or not the parties believe they are creating the relationship of employer-employee.

Id. at *4.

The Court concluded that the “fact that the Drivers here had contracts ‘expressly acknowledging that they were independent contractors’ is simply not significant under California’s test of employment.” Id. at *8 (citing Borello, 256 Cal. Rptr. 543, 769 P.2d at 403 (“The label placed by the parties on their relationship is not dispositive, and subterfuges are not countenanced.”)).

The Court evaluated the various indicia of employment and concluded that:

Ultimately, under California’s multi-faceted test of employment, there existed at the very least sufficient indicia of an employment relationship between the plaintiff Drivers and EGL such that a reasonable jury could find the existence of such a relationship. Indeed, although it plays no role in our decision to deny summary judgment, it is not without significance that, applying comparable factors to those that we apply here, the Internal Revenue Service (at EGL’s request) and the Employment Development Department of California (at Narayan’s request) have determined that Narayan was an employee for federal tax purposes (applying federal law) and California Unemployment or Disability Insurance (applying California law), respectively.

Id. at *8.

UPDATE:

On August 5, 2010, the Ninth Circuit amended its holding, highlighted above.

By CHARLES H. JUNG

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