Preview
1 Carolyn H. Cottrell (SBN 166977)
David C. Leimbach (SBN 265409)
2 SCHNEIDER WALLACE
COTTRELL KONECKY LLP
3 2000 Powell Street, Suite 1400
Emeryville, California 94608
4 Telephone: (415) 421-7100
Facsimile: (415) 421-7105
5 ccottrell@schneiderwallace.com
dleimbach@schneiderwallace.com
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Attorneys for Plaintiff Rachel Moniz,
7 the State of California, and Aggrieved Employees
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SUPERIOR COURT OF CALIFORNIA
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COUNTY OF SAN MATEO
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11 RACHEL MONIZ, on behalf of the State of Case No. 17CIV01736
California and aggrieved employees,
12 Assigned for All Purposes to
Plaintiff, Hon. Marie S. Weiner, Dept. 2
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vs. PLAINTIFF’S REPLY IN SUPPORT OF
14 RENEWED MOTION TO APPROVE
ADECCO USA, INC., and DOES 1-50, SETTLEMENT PURSUANT TO PRIVATE
15 inclusive, ATTORNEYS GENERAL ACT OF 2004
16 Defendants. Date: February 1, 2023
Time: 2:00 PM
17 Place: Dept. 2
18 Complaint Filed April 18, 2017
Trial Date: None Set
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PLAINTIFF’S REPLY IN SUPPORT OF RENEWED MOTION TO APPROVE SETTLEMENT PURSUANT TO
PRIVATE ATTORNEYS GENERAL ACT OF 2004
1 I. INTRODUCTION
2 The PAGA settlement achieved in this case warrants approval. This Court has previously
3 said so. The Court of Appeal never had any issue with the amount of settlement either. Only two
4 things have prevented approval of the settlement in this case: (1) The 25% allocation of PAGA
5 penalties given to aggrieved employees was either inadequately explained or otherwise viewed as
6 disproportionate; and (2) A relentless shakedown by objector Paola Correra and her attorneys, who
7 would rather see aggrieved employees and the State of California get nothing unless and until her
8 attorneys are compensated for their failures in a similar case that achieved nothing for the State or
9 aggrieved employees. The former has been fully addressed by the revised settlement agreement.
10 Unfortunately, Correa’s shakedown continues. For the most part, Correa parrots the same
11 arguments that have been rejected by multiple courts, time and again. For example, Correa insists
12 the total $4,500,000 settlement is inadequate, even though both this Court and the Court of Appeal
13 plainly disagreed. Correa continues to pedal hyperbolic conspiracy theories of collusion, which
14 have been repeatedly rejected by every court to hear them, and are as nonsensical today as they have
15 been for the past three years.
16 To the extent Correa has anything new to say – and true to form – these grievances are based
17 on made-up facts and intentional misreadings of the revised settlement agreement. For example,
18 Correa insists the settlement is releasing claims from July 2019 to present without providing any
19 value for the claims. But the settlement agreement plainly states that the release only runs to July
20 2019. This argument – like the rest of Correa’s multi-year shakedown for attorney’s fees – should
21 be summarily rejected.
22 Plaintiff respectfully requests that the Court approve the Settlement.
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2
PLAINTIFF’S REPLY IN SUPPORT OF RENEWED MOTION TO APPROVE SETTLEMENT PURSUANT TO
PRIVATE ATTORNEYS GENERAL ACT OF 2004
1 II. ARGUMENT
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A. As this Court and the Court of Appeal have Repeatedly Confirmed, the Total Amount
3 of the Settlement is Reasonable and Adequate.
4 No Court – neither this Court nor the Court of Appeal – has ever had an issue with the total
5 amount of the settlement in this case. Just a few months ago, and despite vehement protestations
6 from Correa’s Counsel as to the amount of the settlement, this Court took no issue with the amount
7 of the settlement, holding only that the allocation of proceeds between Colleagues and Associates
8 “must be divided equally among them.” (See Leimbach Decl. Ex. 17.) Similarly, the Court of
9 Appeal took no issue with the total amount of the settlement, remanding only because it could not
10 “infer from the record that the trial court assessed the fairness of the settlement's allocation of civil
11 penalties between [Colleagues and Associates].” Moniz v. Adecco USA, Inc. (2021) 72 Cal. App.
12 5th 56, 64-65, 87-89.
13 Unless this Court is in the business of wasting its own time and resources – indeed, unless
14 this Court believes the Court of Appeal is in the business of wasting the time and resources of trial
15 courts – this conclusively shows that the total amount of the settlement is reasonable and adequate.
16 There would be no logical reason for the Court of Appeal to remand these proceedings to further
17 develop the record on the allocation issue if the Settlement would fail in any event because the
18 overall recovery was insufficient. And there is no reason this Court would have delved into how
19 25% of PAGA proceeds should be allocated between aggrieved employees if the entire PAGA
20 settlement was anything short of reasonable and adequate.
21 Parroting the same arguments they made in the past, Correa and her counsel seize upon
22 statements by Plaintiff that suggest the PAGA penalties could theoretically amount to billions of
23 dollars if they are determined to accrue continuously in every pay period beginning when the
24 employee signed the confidentiality agreement. But Correa has repeatedly made this same argument
25 to this Court and the Court of Appeal. If this theoretical possibility rendered the settlement
26 inadequate, surely this Court or the Court of Appeal would have said something to that effect, rather
27 than orchestrate what would effectively prove to be the pointless endeavor of revisiting the
28 allocation issue.
3
DECLARATION OF DAVID C. LEIMBACH IN SUPPORT OF RENEWED MOTION TO APPROVE
SETTLEMENT PURSUANT TO PRIVATE ATTORNEYS GENERAL ACT OF 2004
1 But perhaps more importantly, Correa’s insistence that this is a billion-dollar case that her
2 and her attorneys can retire on is simply wrong. Correa provides no authority suggesting that PAGA
3 penalties should accrue continuously after the employee signs the agreement. Plaintiff, on the other
4 hand, could only locate one authority suggesting that PAGA penalties for unlawful confidentiality
5 agreements accrue just once, not every week the employee is subject to the agreement. See Johnson
6 v. Maxim Healthcare Services, Inc. (2021) 66 Cal.App.5th 924. Plaintiff provided a thorough
7 analysis of Johnson in her moving papers and explained why PAGA penalties accrue only once,
8 and not every pay period. Predictably, Correa does not substantively address to any of these
9 arguments.1
10 To briefly summarize: In Johnson, the plaintiff signed a non-disclosure agreement three
11 years before bringing her PAGA claim, well outside the PAGA’s one-year statute of limitations.
12 However, the plaintiff was a current employee at the time she brought the suit. The Johnson Court
13 framed the issue as follows: “the main issue posed by the parties on appeal is whether an employee,
14 whose individual claim is time-barred, may still pursue a representative claim under the PAGA.”
15 (Id. at 928-930.) Relying on the Supreme Court’s decision in Kim v. Reins International California,
16 Inc. (2020) 9 Cal. 5th 73, Johnson explained that because PAGA plaintiffs need not have standing
17 to assert their own individual claims to bring a PAGA claim, it logically followed that the plaintiff
18 did not lose standing to assert a PAGA claim challenging the non-disclosure agreements simply
19 because her individual claim was outside the statute of limitations. (Id.)
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Correa states that Plaintiff’s interpretation of Johnson is an “erroneous interpretation,” see Correa
Opp. at p. 6, yet Correa fails to provide a single reason as to why Plaintiff is mistaken. Instead,
23 Correa immediately shifts to the anecdotal argument that some of the relevant statutes would allow
24 for an additional PAGA violation when an individual employee is in fact prohibited from disclosing
their working conditions. But there is no evidence to suggest this has actually happened. Indeed,
25 even in the failed Correa litigation, the case was never about such individualized violations any more
than this case was. This, of course, helps to explain why Correa is incapable of offering a single
26 piece of evidence to suggest this has any meaningful impact on the valuation of the claim.
Regardless, even if Correa put forward a single employee who testified to a single instance of this
27 happening, Correa cannot seriously argue there is a “manageable” way to determine if nearly 70,000
28 individuals were in fact, individually, prevented from disclosing their working conditions. (See
Wesson v. Staples the Office Superstore, LLC, 68 Cal. App. 5th 746, 772-775.)
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DECLARATION OF DAVID C. LEIMBACH IN SUPPORT OF RENEWED MOTION TO APPROVE
SETTLEMENT PURSUANT TO PRIVATE ATTORNEYS GENERAL ACT OF 2004
1 By framing the issue in this way, Johnson confirms that only a single PAGA claim accrues
2 when an employee signs an unlawful non-disclosure agreement. If PAGA violations accrued every
3 pay period that an employee is subject to a non-disclosure agreement, there would be no statute of
4 limitations issue – the claim would have been timely, because she suffered a violation within the
5 year prior, as a current employee who continued to be bound by the NDA. It therefore logically
6 follows that Johnson agreed with the following statement of law: When it comes to PAGA penalties
7 derivative of non-disclosure agreements, the PAGA penalty only accrues once, at the time the
8 agreement it is executed or imposed, and not for every pay period the employee is subject to the
9 agreement.
10 Correa’s argument on continuing violations necessarily requires this Court to agree that there
11 is no statute of limitations for these claims, and penalties accrue forever – even long after separation
12 from employment. In other words, as Correa sees it, the State of California intended to enact rules
13 that will require thousands of California employers to individually experience – each and every one
14 of them – greater regulatory fines than any company in the history of the world.2 This is plainly
15 wrong.
16 A more reasonable view – one that is grounded in the case law – is that the penalties
17 corresponding to a written policy are assessed once, when it is executed or initially imposed. Under
18 this approach, if there is a single PAGA penalty per employee, the maximum value of the case
19 would be $6.2 million. If four penalties are stacked during the pay period in which the employee
20 signs the agreement, Adecco’s maximum exposure is $24.8 million. These are the realistic and
21 appropriate assessments for Adecco’s exposure. The Settlement compares very favorably to these
22 reasonable assessments of the PAGA penalties at issue, confirming that approval is warranted.
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For comparison, BP Exploration and Production Inc. pleaded guilty to 14 criminal counts for its
illegal conduct leading to and after the 2010 Deepwater Horizon disaster, and was sentenced to pay
26 $4 billion in criminal fines and penalties. Attorney General Eric Holder described the $4 billion fine
as “the largest criminal resolution in U.S. history.” See:
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https://cfpub.epa.gov/compliance/criminal_prosecution/index.cfm?action=3&prosecution_summar
28 y_id=2468#main-content
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DECLARATION OF DAVID C. LEIMBACH IN SUPPORT OF RENEWED MOTION TO APPROVE
SETTLEMENT PURSUANT TO PRIVATE ATTORNEYS GENERAL ACT OF 2004
1 When compared to the realistic assessment of Adecco’s exposure, the recovery here is “fair,
2 reasonable, and adequate” as well as “meaningful, and consistent with the underlying purpose of
3 the PAGA to benefit the public.” The $4.5 million Maximum Settlement Amount means that
4 Adecco will pay net penalties of over $2.1 million to the State of California and over $700,000 to
5 the Aggrieved Employees. In other words, Plaintiff has successfully prosecuted and resolved a law
6 enforcement action such that Adecco will pay over $2.1 million in fines directly into the State’s
7 coffers, with further windfall payments to each Aggrieved Employee. This is an excellent result for
8 the State by any measure.3
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B. The Allocation Between Colleagues and Associates is Reasonable, and Fully Addresses
10 this Court’s and Court of Appeal’s Allocation Concerns.
11 The only issue identified by the Court of Appeal and later this Court was the unequal
12 allocation of proceeds to Aggrieved Employees. That issue has been cured. Pursuant to the amended
13 settlement agreement, all Aggrieved Employees will receive the same amount. (Leimbach Decl. Ex.
14 1, § III.H.).
15 After spending years complaining that Colleagues were getting more than Associates, Correa
16 is now apparently arguing that the settlement is inadequate because Colleagues are not getting
17 enough. Of course, Correa does not actually believe this, but instead is using a “gotcha” argument
18 in support of her attorney’s never-ending quest for an unearned payday. The sequence of Correa’s
19 “gotcha” argument goes like this: (1) Correa seizes upon Plaintiff’s earlier arguments that
20 Colleagues should receive more than Associates in the 25% allocation, and tortures that initial
21 premise beyond recognition in stating that “Moniz argued that all litigation risks considered, a
22 reasonable value for Colleague-based claims was $159”; (2) Correa notes that Moniz is now
23 proposing Associates and Colleagues get the same amount; and (3) Correa surmises that because
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25 A $2.1 million payment will result in a major addition of funds to the LWDA, and will account for
a significant portion of all PAGA penalties received by the State in a given year. Private enforcer
26 recovery of penalties via PAGA has grown from about $4.5 million in 2012 to over $41 million per
year as of 2019. (Andrew Elmore, The State Qui Tam to Enforce Employment Law (2020) 69 DePaul
27 L. Rev. 357, 372; see also Ivan Munoz, Note: Has PAGA Met Its Final Match? Continued Expansion
28 Of California's Private Attorneys General Act Leads To Trade Group's Constitutional Challenge
(2020) 60 Santa Clara L. Rev. 397, 421 [the state collected $34,640,059 in fiscal year 2017-2018].)
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DECLARATION OF DAVID C. LEIMBACH IN SUPPORT OF RENEWED MOTION TO APPROVE
SETTLEMENT PURSUANT TO PRIVATE ATTORNEYS GENERAL ACT OF 2004
1 Moniz previously stated Colleagues should get $159 each and now Colleagues and Associates
2 should get the same amount, the settlement is only reasonable and adequate if all Associates and
3 Colleagues get $159 each, which apparently means the settlement needs to be approximately fifteen
4 times greater (roughly $60,000,000-$70,000,000) before it can be approved. (Correa Opp. at p. 4.)
5 This is a silly argument that cannot be taken seriously. And in any event, Moniz never made
6 the argument that apparently forms the basis for Correa’s “gotcha” ruse. What Moniz in fact argued
7 was that in light of all of all relevant criteria – including litigation risks – $4,500,000 was a fair,
8 reasonable, and adequate settlement of the PAGA claim as a whole. From that figure, Moniz then
9 proceeded to explain that in deciding how the 25% of those proceeds allocated to aggrieved
10 employees should be distributed, Colleagues should get more, because their claims were stronger.
11 Try as it might to argue otherwise, this is the only item – allocation – at issue in these settlement
12 proceedings.
13 Following remand from the Court of Appeal, Plaintiff sought to better explain why she
14 thought Colleague claims were stronger, and why they should receive a larger share of that 25%
15 allocation. But in the end, this Court disagreed, holding that
16 [T]he Court concludes that any monetary recovery in exchange for release of civil
17 penalty claims under PAGA, as to the 25% portion payable to the aggrieved
employees, where there was not separate and distinct conduct of the employer in
18 violation of the Labor Code, must be divided equally among all of them. Here, the
alleged wrongful conduct of the Defendant employer was to have confidentiality
19 terms in its written agreements with employees. Although Plaintiff alleged that
Adecco’s conduct was Violation of multiple Labor Code Sections, they are all based
20 upon the identical conduct. Ours is not situation where an aggrieved employee was
21 alleged to have suffered multiple different violations of the Labor Code from different
conduct, such that some aggrieved employees were subjected to multiple different
22 actions by the employer triggering multiple different civil penalties. Perhaps in such
situation there might be more of the civil penalty money given to some aggrieved
23 employees than others based upon the number of violative conduct – not the strength
of the “merits” of their claim – and that such differing allocation might be
24 appropriate; but that is not our situation.
25 (Leimbach Decl. Ex. 17.) (Italics in original; bold added.) In other words, this Court rejected the
26 notion that the “strength” or “merits” of a theory animating a claim under a given statute does not
27 justify disproportionate allocation from other aggrieved employees have the same “claim,” even if
28 animated by a weaker theory.
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DECLARATION OF DAVID C. LEIMBACH IN SUPPORT OF RENEWED MOTION TO APPROVE
SETTLEMENT PURSUANT TO PRIVATE ATTORNEYS GENERAL ACT OF 2004
1 To that, Moniz can only say: Fair enough. The PAGA, after all, is an evolving statute, and
2 as this case no doubt demonstrates, new precedent seems to arise every couple months. In this case,
3 Plaintiff believed the theory of liability for Colleagues was stronger than for Associates, and that
4 justified a disproportionate allocation. This Court disagreed, holding as a matter of law that the
5 strength of the claims do not matter if the claim is the same, and further called for an “equal”
6 allocation because the claims were the same. Plaintiff has done just that in the revised agreement.
7 Ironically enough, while Correa argues that Plaintiff’s “admissions” concerning the strength of
8 Colleague claims should now preclude approval, all this argument really shows is Correa fails to
9 understand the one and only reason this Court denied approval in the first instance.
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C. Correa’s Complaints About the Release Language Ignore the Plain Language of the
11 Settlement Agreement and are Wrong as a Matter of Fact and Law.
12 As a last ditch effort to prevent the State from collecting penalties, Correa pretends as though
13 the release language is somehow broader in the revised agreement. For example, Correa offers
14 numerous arguments revolving around the idea that Moniz and Adecco are releasing claims all the
15 way through the February 1, 2023 approval hearing, but not assigning any value to those claims
16 between July 3, 2019 and February of 2023. But this is demonstrably false. The Settlement
17 Agreement makes plain that the covered period is limited to February 1, 2016 through July 3,
18 2019. (Leimbach Decl. Ex. 1 at ¶ E).4
19 Correa also pretends as though the scope of claims being released is broader by referencing
20 claims identified in the LWDA latter. The claims to be released by the Aggrieved Employees
21 include only those claims under the PAGA that were or could have been pled based on the facts
22 alleged in the operative complaint or underlying PAGA Notice. (Leimbach Decl. Ex. 1, § III.S.)
23 As a matter of law, Correa is wrong. After all, Moniz and Adecco fully litigated whether the
24 scope of Moniz’s LWDA letter included Associates, and while Correa and Adecco surely wish it
25 wasn’t so, this Court ruled that Moniz’s LWDA letter applied to Colleagues and Associates alike.
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27 To the extent the Court has any concerns about whether a provision in the Settlement Agreement
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28 contradicts this explicit provision, Plaintiff requests the Court to simply state in its final approval
order that the claims being released go only through July 3, 2019.
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DECLARATION OF DAVID C. LEIMBACH IN SUPPORT OF RENEWED MOTION TO APPROVE
SETTLEMENT PURSUANT TO PRIVATE ATTORNEYS GENERAL ACT OF 2004
1 In other words, this has always been the scope of the release, and Correa merely highlights a
2 distinction without a single difference.
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4 III. CONCLUSION
5 For these reasons, and as stated in Plaintiff’s opening brief in support of this motion, the
6 Court should approve Plaintiff’s Renewed Motion to Approve Settlement Pursuant to Private
7 Attorneys General Act of 2004.
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9 Dated: January 24, 2023 Respectfully submitted,
10 SCHNEIDER WALLACE
COTTRELL KONECKY LLP
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13 David C. Leimbach
14 Attorney for Plaintiff Rachel Moniz, the State of
California, and Aggrieved Employees
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DECLARATION OF DAVID C. LEIMBACH IN SUPPORT OF RENEWED MOTION TO APPROVE
SETTLEMENT PURSUANT TO PRIVATE ATTORNEYS GENERAL ACT OF 2004
1 PROOF OF SERVICE
2 I, Elisa I. Guevara, declare the following:
3 I am over the age of eighteen years and not a party to the within entitled action. I am
4 employed at Schneider Wallace Cottrell Konecky LLP located at 300 S. Grand Ave, Suite 2700
5 Los Angeles, California 90071.
6 On January 24, 2023, I served the following document(s) described as:
7 • PLAINTIFF’S REPLY IN SUPPORT OF RENEWED MOTION TO APPROVE
SETTLEMENT PURSUANT TO PRIVATE ATTORNEYS GENERAL ACT OF 2004
8
On the following interested party(s):
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10 [✓] BY ELECTRONIC SERVICE by electronically mailing a true and correct copy in PDF
format through One Legal’s electronic mail system to the email address(s) set forth above.
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12 I declare under penalty of perjury under the laws of the State of California that the foregoing
13 is true and correct. Executed on January 24, 2023, at Los Angeles, California.
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_______________________________
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Elisa I. Guevara
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PROOF OF SERVICE
1 SERVICE LIST
2 Mia Farber
Adam Y. Siegel
3 Dylan B. Carp
Adam Truong
4 JACKSON LEWIS P.C.
725 South Figueroa Street, Suite 2500
5 Los Angeles, CA 90017
mia.farber@jacksonlewis.com
6 adam.siegel@jacksonlewis.com
dylan.carp@jacksonlewis.com
7 Adam.Truong@jacksonlewis.com
8 Scott P. Jang
JACKSON LEWIS P.C.
9 50 California Street, 9th Floor
San Francisco, CA 94111
10 scott.jang@jacksonlewis.com
11 Attorneys for Defendant Adecco USA, Inc.
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Chris Baker
13 Deborah Schwartz
Bob Dolinko
14 BAKER CURTIS & SCHWARTZ, P.C.
One California Street, Suite 1250
15 San Francisco, CA 94111
cbaker@bakerlp.com
16 dschwartz@bakerlp.com
rdolinko@bakerlp.com
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Jahan C. Sagafi
18 Julio Sharp-Wasserman
Michael Scimone
19 OUTTEN & GOLDEN LLP
One California Street, 12th Floor
20 San Francisco, CA 94111
jsagafi@outtengolden.com
21 jsharp-wasserman@outtengolden.com
mscimone@outtengolden.com
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Attorneys for Paula Correa
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24 David M. Balter
Patricia M. Kelly
25 Michael L. Smith
STATE OF CALIFORNIA
26 Division of Labor Standards Enforcement
Department of Industrial Relations
27 1515 Clay Street, Suite 2206
Oakland, CA 94612
28 dmbalter@dir.ca.gov
pmkelly@dir.ca.gov
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PROOF OF SERVICE
mlsmith@dir.ca.gov
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Attorneys for State of California Labor & Workforce Development Agency
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3 Department No. 2, Courtroom 2E
Superior Court of California for the County of San Mateo
4 400 County Center
Redwood City, California
5 complexcivil@sanmateocourt.org
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PROOF OF SERVICE
Preview
1 Carolyn H. Cottrell (SBN 166977) David C. Leimbach (SBN 265409) 2 SCHNEIDER WALLACE COTTRELL KONECKY LLP 3 2000 Powell Street, Suite 1400 Emeryville, California 94608 4 Telephone: (415) 421-7100 Facsimile: (415) 421-7105 5 ccottrell@schneiderwallace.com dleimbach@schneiderwallace.com 6 Attorneys for Plaintiff Rachel Moniz, 7 the State of California, and Aggrieved Employees 8 SUPERIOR COURT OF CALIFORNIA 9 COUNTY OF SAN MATEO 10 11 RACHEL MONIZ, on behalf of the State of Case No. 17CIV01736 California and aggrieved employees, 12 Assigned for All Purposes to Plaintiff, Hon. Marie S. Weiner, Dept. 2 13 vs. PLAINTIFF’S REPLY IN SUPPORT OF 14 RENEWED MOTION TO APPROVE ADECCO USA, INC., and DOES 1-50, SETTLEMENT PURSUANT TO PRIVATE 15 inclusive, ATTORNEYS GENERAL ACT OF 2004 16 Defendants. Date: February 1, 2023 Time: 2:00 PM 17 Place: Dept. 2 18 Complaint Filed April 18, 2017 Trial Date: None Set 19 20 21 22 23 24 25 26 27 28 1 PLAINTIFF’S REPLY IN SUPPORT OF RENEWED MOTION TO APPROVE SETTLEMENT PURSUANT TO PRIVATE ATTORNEYS GENERAL ACT OF 2004 1 I. INTRODUCTION 2 The PAGA settlement achieved in this case warrants approval. This Court has previously 3 said so. The Court of Appeal never had any issue with the amount of settlement either. Only two 4 things have prevented approval of the settlement in this case: (1) The 25% allocation of PAGA 5 penalties given to aggrieved employees was either inadequately explained or otherwise viewed as 6 disproportionate; and (2) A relentless shakedown by objector Paola Correra and her attorneys, who 7 would rather see aggrieved employees and the State of California get nothing unless and until her 8 attorneys are compensated for their failures in a similar case that achieved nothing for the State or 9 aggrieved employees. The former has been fully addressed by the revised settlement agreement. 10 Unfortunately, Correa’s shakedown continues. For the most part, Correa parrots the same 11 arguments that have been rejected by multiple courts, time and again. For example, Correa insists 12 the total $4,500,000 settlement is inadequate, even though both this Court and the Court of Appeal 13 plainly disagreed. Correa continues to pedal hyperbolic conspiracy theories of collusion, which 14 have been repeatedly rejected by every court to hear them, and are as nonsensical today as they have 15 been for the past three years. 16 To the extent Correa has anything new to say – and true to form – these grievances are based 17 on made-up facts and intentional misreadings of the revised settlement agreement. For example, 18 Correa insists the settlement is releasing claims from July 2019 to present without providing any 19 value for the claims. But the settlement agreement plainly states that the release only runs to July 20 2019. This argument – like the rest of Correa’s multi-year shakedown for attorney’s fees – should 21 be summarily rejected. 22 Plaintiff respectfully requests that the Court approve the Settlement. 23 /// 24 /// 25 /// 26 /// 27 /// 28 /// 2 PLAINTIFF’S REPLY IN SUPPORT OF RENEWED MOTION TO APPROVE SETTLEMENT PURSUANT TO PRIVATE ATTORNEYS GENERAL ACT OF 2004 1 II. ARGUMENT 2 A. As this Court and the Court of Appeal have Repeatedly Confirmed, the Total Amount 3 of the Settlement is Reasonable and Adequate. 4 No Court – neither this Court nor the Court of Appeal – has ever had an issue with the total 5 amount of the settlement in this case. Just a few months ago, and despite vehement protestations 6 from Correa’s Counsel as to the amount of the settlement, this Court took no issue with the amount 7 of the settlement, holding only that the allocation of proceeds between Colleagues and Associates 8 “must be divided equally among them.” (See Leimbach Decl. Ex. 17.) Similarly, the Court of 9 Appeal took no issue with the total amount of the settlement, remanding only because it could not 10 “infer from the record that the trial court assessed the fairness of the settlement's allocation of civil 11 penalties between [Colleagues and Associates].” Moniz v. Adecco USA, Inc. (2021) 72 Cal. App. 12 5th 56, 64-65, 87-89. 13 Unless this Court is in the business of wasting its own time and resources – indeed, unless 14 this Court believes the Court of Appeal is in the business of wasting the time and resources of trial 15 courts – this conclusively shows that the total amount of the settlement is reasonable and adequate. 16 There would be no logical reason for the Court of Appeal to remand these proceedings to further 17 develop the record on the allocation issue if the Settlement would fail in any event because the 18 overall recovery was insufficient. And there is no reason this Court would have delved into how 19 25% of PAGA proceeds should be allocated between aggrieved employees if the entire PAGA 20 settlement was anything short of reasonable and adequate. 21 Parroting the same arguments they made in the past, Correa and her counsel seize upon 22 statements by Plaintiff that suggest the PAGA penalties could theoretically amount to billions of 23 dollars if they are determined to accrue continuously in every pay period beginning when the 24 employee signed the confidentiality agreement. But Correa has repeatedly made this same argument 25 to this Court and the Court of Appeal. If this theoretical possibility rendered the settlement 26 inadequate, surely this Court or the Court of Appeal would have said something to that effect, rather 27 than orchestrate what would effectively prove to be the pointless endeavor of revisiting the 28 allocation issue. 3 DECLARATION OF DAVID C. LEIMBACH IN SUPPORT OF RENEWED MOTION TO APPROVE SETTLEMENT PURSUANT TO PRIVATE ATTORNEYS GENERAL ACT OF 2004 1 But perhaps more importantly, Correa’s insistence that this is a billion-dollar case that her 2 and her attorneys can retire on is simply wrong. Correa provides no authority suggesting that PAGA 3 penalties should accrue continuously after the employee signs the agreement. Plaintiff, on the other 4 hand, could only locate one authority suggesting that PAGA penalties for unlawful confidentiality 5 agreements accrue just once, not every week the employee is subject to the agreement. See Johnson 6 v. Maxim Healthcare Services, Inc. (2021) 66 Cal.App.5th 924. Plaintiff provided a thorough 7 analysis of Johnson in her moving papers and explained why PAGA penalties accrue only once, 8 and not every pay period. Predictably, Correa does not substantively address to any of these 9 arguments.1 10 To briefly summarize: In Johnson, the plaintiff signed a non-disclosure agreement three 11 years before bringing her PAGA claim, well outside the PAGA’s one-year statute of limitations. 12 However, the plaintiff was a current employee at the time she brought the suit. The Johnson Court 13 framed the issue as follows: “the main issue posed by the parties on appeal is whether an employee, 14 whose individual claim is time-barred, may still pursue a representative claim under the PAGA.” 15 (Id. at 928-930.) Relying on the Supreme Court’s decision in Kim v. Reins International California, 16 Inc. (2020) 9 Cal. 5th 73, Johnson explained that because PAGA plaintiffs need not have standing 17 to assert their own individual claims to bring a PAGA claim, it logically followed that the plaintiff 18 did not lose standing to assert a PAGA claim challenging the non-disclosure agreements simply 19 because her individual claim was outside the statute of limitations. (Id.) 20 21 22 1 Correa states that Plaintiff’s interpretation of Johnson is an “erroneous interpretation,” see Correa Opp. at p. 6, yet Correa fails to provide a single reason as to why Plaintiff is mistaken. Instead, 23 Correa immediately shifts to the anecdotal argument that some of the relevant statutes would allow 24 for an additional PAGA violation when an individual employee is in fact prohibited from disclosing their working conditions. But there is no evidence to suggest this has actually happened. Indeed, 25 even in the failed Correa litigation, the case was never about such individualized violations any more than this case was. This, of course, helps to explain why Correa is incapable of offering a single 26 piece of evidence to suggest this has any meaningful impact on the valuation of the claim. Regardless, even if Correa put forward a single employee who testified to a single instance of this 27 happening, Correa cannot seriously argue there is a “manageable” way to determine if nearly 70,000 28 individuals were in fact, individually, prevented from disclosing their working conditions. (See Wesson v. Staples the Office Superstore, LLC, 68 Cal. App. 5th 746, 772-775.) 4 DECLARATION OF DAVID C. LEIMBACH IN SUPPORT OF RENEWED MOTION TO APPROVE SETTLEMENT PURSUANT TO PRIVATE ATTORNEYS GENERAL ACT OF 2004 1 By framing the issue in this way, Johnson confirms that only a single PAGA claim accrues 2 when an employee signs an unlawful non-disclosure agreement. If PAGA violations accrued every 3 pay period that an employee is subject to a non-disclosure agreement, there would be no statute of 4 limitations issue – the claim would have been timely, because she suffered a violation within the 5 year prior, as a current employee who continued to be bound by the NDA. It therefore logically 6 follows that Johnson agreed with the following statement of law: When it comes to PAGA penalties 7 derivative of non-disclosure agreements, the PAGA penalty only accrues once, at the time the 8 agreement it is executed or imposed, and not for every pay period the employee is subject to the 9 agreement. 10 Correa’s argument on continuing violations necessarily requires this Court to agree that there 11 is no statute of limitations for these claims, and penalties accrue forever – even long after separation 12 from employment. In other words, as Correa sees it, the State of California intended to enact rules 13 that will require thousands of California employers to individually experience – each and every one 14 of them – greater regulatory fines than any company in the history of the world.2 This is plainly 15 wrong. 16 A more reasonable view – one that is grounded in the case law – is that the penalties 17 corresponding to a written policy are assessed once, when it is executed or initially imposed. Under 18 this approach, if there is a single PAGA penalty per employee, the maximum value of the case 19 would be $6.2 million. If four penalties are stacked during the pay period in which the employee 20 signs the agreement, Adecco’s maximum exposure is $24.8 million. These are the realistic and 21 appropriate assessments for Adecco’s exposure. The Settlement compares very favorably to these 22 reasonable assessments of the PAGA penalties at issue, confirming that approval is warranted. 23 24 25 2 For comparison, BP Exploration and Production Inc. pleaded guilty to 14 criminal counts for its illegal conduct leading to and after the 2010 Deepwater Horizon disaster, and was sentenced to pay 26 $4 billion in criminal fines and penalties. Attorney General Eric Holder described the $4 billion fine as “the largest criminal resolution in U.S. history.” See: 27 https://cfpub.epa.gov/compliance/criminal_prosecution/index.cfm?action=3&prosecution_summar 28 y_id=2468#main-content 5 DECLARATION OF DAVID C. LEIMBACH IN SUPPORT OF RENEWED MOTION TO APPROVE SETTLEMENT PURSUANT TO PRIVATE ATTORNEYS GENERAL ACT OF 2004 1 When compared to the realistic assessment of Adecco’s exposure, the recovery here is “fair, 2 reasonable, and adequate” as well as “meaningful, and consistent with the underlying purpose of 3 the PAGA to benefit the public.” The $4.5 million Maximum Settlement Amount means that 4 Adecco will pay net penalties of over $2.1 million to the State of California and over $700,000 to 5 the Aggrieved Employees. In other words, Plaintiff has successfully prosecuted and resolved a law 6 enforcement action such that Adecco will pay over $2.1 million in fines directly into the State’s 7 coffers, with further windfall payments to each Aggrieved Employee. This is an excellent result for 8 the State by any measure.3 9 B. The Allocation Between Colleagues and Associates is Reasonable, and Fully Addresses 10 this Court’s and Court of Appeal’s Allocation Concerns. 11 The only issue identified by the Court of Appeal and later this Court was the unequal 12 allocation of proceeds to Aggrieved Employees. That issue has been cured. Pursuant to the amended 13 settlement agreement, all Aggrieved Employees will receive the same amount. (Leimbach Decl. Ex. 14 1, § III.H.). 15 After spending years complaining that Colleagues were getting more than Associates, Correa 16 is now apparently arguing that the settlement is inadequate because Colleagues are not getting 17 enough. Of course, Correa does not actually believe this, but instead is using a “gotcha” argument 18 in support of her attorney’s never-ending quest for an unearned payday. The sequence of Correa’s 19 “gotcha” argument goes like this: (1) Correa seizes upon Plaintiff’s earlier arguments that 20 Colleagues should receive more than Associates in the 25% allocation, and tortures that initial 21 premise beyond recognition in stating that “Moniz argued that all litigation risks considered, a 22 reasonable value for Colleague-based claims was $159”; (2) Correa notes that Moniz is now 23 proposing Associates and Colleagues get the same amount; and (3) Correa surmises that because 24 3 25 A $2.1 million payment will result in a major addition of funds to the LWDA, and will account for a significant portion of all PAGA penalties received by the State in a given year. Private enforcer 26 recovery of penalties via PAGA has grown from about $4.5 million in 2012 to over $41 million per year as of 2019. (Andrew Elmore, The State Qui Tam to Enforce Employment Law (2020) 69 DePaul 27 L. Rev. 357, 372; see also Ivan Munoz, Note: Has PAGA Met Its Final Match? Continued Expansion 28 Of California's Private Attorneys General Act Leads To Trade Group's Constitutional Challenge (2020) 60 Santa Clara L. Rev. 397, 421 [the state collected $34,640,059 in fiscal year 2017-2018].) 6 DECLARATION OF DAVID C. LEIMBACH IN SUPPORT OF RENEWED MOTION TO APPROVE SETTLEMENT PURSUANT TO PRIVATE ATTORNEYS GENERAL ACT OF 2004 1 Moniz previously stated Colleagues should get $159 each and now Colleagues and Associates 2 should get the same amount, the settlement is only reasonable and adequate if all Associates and 3 Colleagues get $159 each, which apparently means the settlement needs to be approximately fifteen 4 times greater (roughly $60,000,000-$70,000,000) before it can be approved. (Correa Opp. at p. 4.) 5 This is a silly argument that cannot be taken seriously. And in any event, Moniz never made 6 the argument that apparently forms the basis for Correa’s “gotcha” ruse. What Moniz in fact argued 7 was that in light of all of all relevant criteria – including litigation risks – $4,500,000 was a fair, 8 reasonable, and adequate settlement of the PAGA claim as a whole. From that figure, Moniz then 9 proceeded to explain that in deciding how the 25% of those proceeds allocated to aggrieved 10 employees should be distributed, Colleagues should get more, because their claims were stronger. 11 Try as it might to argue otherwise, this is the only item – allocation – at issue in these settlement 12 proceedings. 13 Following remand from the Court of Appeal, Plaintiff sought to better explain why she 14 thought Colleague claims were stronger, and why they should receive a larger share of that 25% 15 allocation. But in the end, this Court disagreed, holding that 16 [T]he Court concludes that any monetary recovery in exchange for release of civil 17 penalty claims under PAGA, as to the 25% portion payable to the aggrieved employees, where there was not separate and distinct conduct of the employer in 18 violation of the Labor Code, must be divided equally among all of them. Here, the alleged wrongful conduct of the Defendant employer was to have confidentiality 19 terms in its written agreements with employees. Although Plaintiff alleged that Adecco’s conduct was Violation of multiple Labor Code Sections, they are all based 20 upon the identical conduct. Ours is not situation where an aggrieved employee was 21 alleged to have suffered multiple different violations of the Labor Code from different conduct, such that some aggrieved employees were subjected to multiple different 22 actions by the employer triggering multiple different civil penalties. Perhaps in such situation there might be more of the civil penalty money given to some aggrieved 23 employees than others based upon the number of violative conduct – not the strength of the “merits” of their claim – and that such differing allocation might be 24 appropriate; but that is not our situation. 25 (Leimbach Decl. Ex. 17.) (Italics in original; bold added.) In other words, this Court rejected the 26 notion that the “strength” or “merits” of a theory animating a claim under a given statute does not 27 justify disproportionate allocation from other aggrieved employees have the same “claim,” even if 28 animated by a weaker theory. 7 DECLARATION OF DAVID C. LEIMBACH IN SUPPORT OF RENEWED MOTION TO APPROVE SETTLEMENT PURSUANT TO PRIVATE ATTORNEYS GENERAL ACT OF 2004 1 To that, Moniz can only say: Fair enough. The PAGA, after all, is an evolving statute, and 2 as this case no doubt demonstrates, new precedent seems to arise every couple months. In this case, 3 Plaintiff believed the theory of liability for Colleagues was stronger than for Associates, and that 4 justified a disproportionate allocation. This Court disagreed, holding as a matter of law that the 5 strength of the claims do not matter if the claim is the same, and further called for an “equal” 6 allocation because the claims were the same. Plaintiff has done just that in the revised agreement. 7 Ironically enough, while Correa argues that Plaintiff’s “admissions” concerning the strength of 8 Colleague claims should now preclude approval, all this argument really shows is Correa fails to 9 understand the one and only reason this Court denied approval in the first instance. 10 C. Correa’s Complaints About the Release Language Ignore the Plain Language of the 11 Settlement Agreement and are Wrong as a Matter of Fact and Law. 12 As a last ditch effort to prevent the State from collecting penalties, Correa pretends as though 13 the release language is somehow broader in the revised agreement. For example, Correa offers 14 numerous arguments revolving around the idea that Moniz and Adecco are releasing claims all the 15 way through the February 1, 2023 approval hearing, but not assigning any value to those claims 16 between July 3, 2019 and February of 2023. But this is demonstrably false. The Settlement 17 Agreement makes plain that the covered period is limited to February 1, 2016 through July 3, 18 2019. (Leimbach Decl. Ex. 1 at ¶ E).4 19 Correa also pretends as though the scope of claims being released is broader by referencing 20 claims identified in the LWDA latter. The claims to be released by the Aggrieved Employees 21 include only those claims under the PAGA that were or could have been pled based on the facts 22 alleged in the operative complaint or underlying PAGA Notice. (Leimbach Decl. Ex. 1, § III.S.) 23 As a matter of law, Correa is wrong. After all, Moniz and Adecco fully litigated whether the 24 scope of Moniz’s LWDA letter included Associates, and while Correa and Adecco surely wish it 25 wasn’t so, this Court ruled that Moniz’s LWDA letter applied to Colleagues and Associates alike. 26 27 To the extent the Court has any concerns about whether a provision in the Settlement Agreement 4 28 contradicts this explicit provision, Plaintiff requests the Court to simply state in its final approval order that the claims being released go only through July 3, 2019. 8 DECLARATION OF DAVID C. LEIMBACH IN SUPPORT OF RENEWED MOTION TO APPROVE SETTLEMENT PURSUANT TO PRIVATE ATTORNEYS GENERAL ACT OF 2004 1 In other words, this has always been the scope of the release, and Correa merely highlights a 2 distinction without a single difference. 3 4 III. CONCLUSION 5 For these reasons, and as stated in Plaintiff’s opening brief in support of this motion, the 6 Court should approve Plaintiff’s Renewed Motion to Approve Settlement Pursuant to Private 7 Attorneys General Act of 2004. 8 9 Dated: January 24, 2023 Respectfully submitted, 10 SCHNEIDER WALLACE COTTRELL KONECKY LLP 11 12 13 David C. Leimbach 14 Attorney for Plaintiff Rachel Moniz, the State of California, and Aggrieved Employees 15 16 17 18 19 20 21 22 23 24 25 26 27 28 9 DECLARATION OF DAVID C. LEIMBACH IN SUPPORT OF RENEWED MOTION TO APPROVE SETTLEMENT PURSUANT TO PRIVATE ATTORNEYS GENERAL ACT OF 2004 1 PROOF OF SERVICE 2 I, Elisa I. Guevara, declare the following: 3 I am over the age of eighteen years and not a party to the within entitled action. I am 4 employed at Schneider Wallace Cottrell Konecky LLP located at 300 S. Grand Ave, Suite 2700 5 Los Angeles, California 90071. 6 On January 24, 2023, I served the following document(s) described as: 7 • PLAINTIFF’S REPLY IN SUPPORT OF RENEWED MOTION TO APPROVE SETTLEMENT PURSUANT TO PRIVATE ATTORNEYS GENERAL ACT OF 2004 8 On the following interested party(s): 9 10 [✓] BY ELECTRONIC SERVICE by electronically mailing a true and correct copy in PDF format through One Legal’s electronic mail system to the email address(s) set forth above. 11 12 I declare under penalty of perjury under the laws of the State of California that the foregoing 13 is true and correct. Executed on January 24, 2023, at Los Angeles, California. 14 15 _______________________________ 16 Elisa I. Guevara 17 18 19 20 21 22 23 24 25 26 27 28 PROOF OF SERVICE 1 SERVICE LIST 2 Mia Farber Adam Y. Siegel 3 Dylan B. Carp Adam Truong 4 JACKSON LEWIS P.C. 725 South Figueroa Street, Suite 2500 5 Los Angeles, CA 90017 mia.farber@jacksonlewis.com 6 adam.siegel@jacksonlewis.com dylan.carp@jacksonlewis.com 7 Adam.Truong@jacksonlewis.com 8 Scott P. Jang JACKSON LEWIS P.C. 9 50 California Street, 9th Floor San Francisco, CA 94111 10 scott.jang@jacksonlewis.com 11 Attorneys for Defendant Adecco USA, Inc. 12 Chris Baker 13 Deborah Schwartz Bob Dolinko 14 BAKER CURTIS & SCHWARTZ, P.C. One California Street, Suite 1250 15 San Francisco, CA 94111 cbaker@bakerlp.com 16 dschwartz@bakerlp.com rdolinko@bakerlp.com 17 Jahan C. Sagafi 18 Julio Sharp-Wasserman Michael Scimone 19 OUTTEN & GOLDEN LLP One California Street, 12th Floor 20 San Francisco, CA 94111 jsagafi@outtengolden.com 21 jsharp-wasserman@outtengolden.com mscimone@outtengolden.com 22 Attorneys for Paula Correa 23 24 David M. Balter Patricia M. Kelly 25 Michael L. Smith STATE OF CALIFORNIA 26 Division of Labor Standards Enforcement Department of Industrial Relations 27 1515 Clay Street, Suite 2206 Oakland, CA 94612 28 dmbalter@dir.ca.gov pmkelly@dir.ca.gov 2 PROOF OF SERVICE mlsmith@dir.ca.gov 1 Attorneys for State of California Labor & Workforce Development Agency 2 3 Department No. 2, Courtroom 2E Superior Court of California for the County of San Mateo 4 400 County Center Redwood City, California 5 complexcivil@sanmateocourt.org 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 3 PROOF OF SERVICE