Request,Application: RACHEL MONIZ vs ADECCO USA, INC.

On April 18, 2017 a Request,Application was filed involving a dispute between Moniz, Rachel, and Adecco Usa, Inc., Does 1 To 50, Inclusive, Does 1 To 9, for Complex Civil Unlimited in the District Court of San Mateo County.

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1 The aJAHAN C. SAGAFI (SBN 224887)
OUTTEN & GOLDEN LLP
2 One California Street, 12th Floor
San Francisco, CA 94111
3 Telephone: (415) 638-8800
Facsimile: (415) 638-8810
4 Email: jsagafi@outtengolden.com

5 JULIO SHARP-WASSERMAN*
OUTTEN & GOLDEN LLP
6 685 Third Avenue, 25th Floor
New York, NY 10017
7 Telephone: (516) 788-6824
Facsimile: (646)509-2060
8 Email: jsharp-wasserman@outtengolden.com
*Appearing Pro Hac Vice
9
CHRIS BAKER (SBN 181557)
10 DEBORAH SCHWARTZ (SBN 208934)
BAKER CURTIS & SCHWARTZ, P.C.
11 One California St., Suite 1250
San Francisco, CA 94111
12 Telephone: (415) 433-1064
Fax: (415) 422-9966
13 Email: cbaker@bakerlp.com
Email: dschwartz@bakerlp.com
14
Attorneys for Aggrieved Parties Paola Correa, Baker Curtis & Schwartz, P.C.,
15 and Outten & Golden LLP

16
SUPERIOR COURT OF THE STATE OF CALIFORNIA
17
COUNTY OF SAN MATEO
18

19 RACHEL MONIZ, Case No. 17-CIV-01736
20
Plaintiff, PAOLA CORREA'S REQUEST THAT HER
21 NOTICE OF INTENTION AND MOTION
v. TO VACATE (SUBMITTED ON
22 FEBRUARY 24, 2023) BE FILED AND THE
ADECCO USA, INC., COURT SET A HEARING DATE FOR
23 THIS MOTION
Defendant.
24
[Proposed] Order lodged concurrently
25
Assigned for All Purposes to
26 Hon. Marie S. Weiner
27 Complaint Filed: April 18, 2017
28 Trial Date: vacated

CORREA’S REQUEST RE NOTICE OF INTENT. AND MOTION TO VACATE / CASE NO. 17-CIV-01736
1 TO THE COURT, RACHEL MONIZ, ADECCO USA, INC. AND THEIR

2 ATTORNEYS OF RECORD.

3 Aggrieved Party Paola Correa requests that the Court instruct the clerk to file the attached

4 February 24, 2023 Notice of Intention and Motion to Vacate and set a hearing date on Correa’s

5 motion. (Exhibit 1).

6 This Request follows the email correspondence with the Court of February 24 and

7 February 27, 2023. (Exhibit 2).

8 Briefly, on February 24, 2023, Correa e-filed her notice of intention with the Court.

9 (Exhibit 3, p. 3). The clerk’s office advised her that she should select a hearing date based on the

10 Court’s calendar. (Exhibit 2 p. 3). Correa did so, and selected a proposed hearing date of April 5,

11 2023. (Normally, the Court sets the hearing date following receipt of the notice of intention.) The

12 Court clerk then rejected the filing because Department 2 had not approved and set the hearing

13 date. (Exhibit 3, p. 3). However, C.C.P. § 1010.6(a)(4) states “any document received

14 electronically by the court between 12:00 a.m. and 11:59:59 p.m. on a court day shall be deemed

15 filed on that court day.”

16 After Correa received notice of the rejected filing, she emailed the Court and requested a

17 hearing date of April 25, 2023, the date on which her fee and service award motion was set for

18 hearing. (Ex. 2, pp. 3-4). The Court responded on February 27, stating that a motion to vacate

19 was not appropriate – because no judgment had been entered – and thus no hearing date was

20 needed. (Ex. 2, p. 2). Correa explained her position based on her reading of C.C.P. § 663 and

21 559, and asked that the Court, out of an abundance of caution, instruct the clerk to accept the

22 filing even without a hearing date. (Ex. 2, p. 2). Correa further stated that, given the Court’s

23 instruction, she would wait to file until after judgment was entered. (Id. at p. 1). In response, the

24 Court stated that it would address Correa’s email correspondence at a later time.

25 ///

26 ///

27 ///

28 ///

-2-
CORREA’S REQUEST RE NOTICE OF INTENT. AND MOTION TO VACATE / CASE NO. 17-CIV-01736
1 Because there are jurisdictional deadlines associated with her statutory notice of intention

2 and motion to vacate, Correa, out of an abundance of caution, again requests that the Court

3 instruct the clerk’s office to accept her February 24, 2023 notice of intention, and, consistent with

4 C.C.P. § 1010.6(a)(4), deem it filed as of that date. Correa also respectfully requests that her

5 motion to vacate be set for hearing on April 25, 2023.

6 Dated: April 6, 2023 Respectfully submitted,

8 By: ______________________________
Chris Baker
9 Attorneys for Correa, BCS, and Outten &
Golden
10

-3-
CORREA’S REQUEST RE NOTICE OF INTENT. AND MOTION TO VACATE / CASE NO. 17-CIV-01736
EXHIBIT 1
1 JAHAN C. SAGAFI (SBN 224887)
OUTTEN & GOLDEN LLP
2 One California Street, 12th Floor
San Francisco, CA 94111
3 Telephone: (415) 638-8800
Facsimile: (415) 638-8810
4 Email: jsagafi@outtengolden.com

5 JULIO SHARP-WASSERMAN (Admitted Pro Hac Vice)
OUTTEN & GOLDEN LLP
6 685 Third Avenue, 25th Floor
New York, NY 10017
7 Telephone: (516) 788-6824
Facsimile: (646)509-2060
8 Email: mscimone@outtengolden.com
Email: jsharp-wasserman@outtengolden.com
9 *Pro Hac Vice application forthcoming

10 ROBERT A. DOLINKO (SBN 076256)
CHRIS BAKER (SBN 181557)
11 DEBORAH SCHWARTZ (SBN 208934)
BAKER CURTIS & SCHWARTZ, P.C.
12 One California St., Suite 1250
San Francisco, CA 94111
13 Telephone: (415) 433-1064
Fax: (415) 366-2525
14 Email: rdolinko@bakerlp.com
Email: cbaker@bakerlp.com
15 Email: dschwartz@bakerlp.com

16 Attorneys for Aggrieved Party Paola Correa

17
SUPERIOR COURT OF THE STATE OF CALIFORNIA
18
COUNTY OF SAN MATEO
19
RACHEL MONIZ, Case No. 17-CIV-01736
20
Plaintiff, AGGRIEVED PARTY PAOLA CORREA’S
21 NOTICE OF INTENTION TO MAKE A
v. MOTION TO SET ASIDE AND VACATE
22
JUDGMENT OR FOR A NEW TRIAL
ADECCO USA, INC., PURSUANT TO C.C.P. §§ 659(a)(1)/(2) and
23
663a(a)(1)/(2); MEMORANDUM OF
Defendant.
24 POINTS AND AUTHORITIES

25 Assigned for all purposes to: The Honorable
Marie S. Weiner
26
Hearing Date: April 5, 2023
27 Hearing Time: 2:00 PM
Department 2
28
MOTION TO SET ASIDE AND VACATE JUDGMENT OR FOR A NEW TRIAL; MPA,
CASE NO. 17-CIV-01736
1 TO DEPARTMENT 2 OF THE SAN MATEO SUPERIOR COURT, PLAINTIFF

2 RACHEL MONIZ AND DEFENDANT ADECCO USA, INC. (AND THEIR ATTORNEYS

3 OF RECORD):

4 Pursuant to California Code of Civil Procedure § 663a(a)(1) and/or (a)(2), Aggrieved

5 Party Paola Correa hereby states her intention to file a motion to set aside and vacate the Court’s

6 judgment in this case and enter a different judgment and/or order denying approval of the

7 settlement. For the reasons and particulars stated below, the Order has an incorrect and erroneous

8 legal basis that is not consistent with or supported by the facts, and it materially affects Correa’s

9 substantial rights. See CCP § 663.

10 Correa also states her intention to move for a new trial (i.e., settlement approval hearing)

11 pursuant to CCP § 659(a)(1) and/or (a)(2). This motion will be based on the minutes and records

12 of the Court. Correa requests that the Order be vacated, modified, and/or that a new settlement

13 hearing be granted. The causes for the motion, as detailed below, and which materially affect

14 Correa’s substantial rights, include: (1) Irregularity in the proceedings of the Court and an abuse

15 of discretion; (2) Inadequate damages/penalties; (3) Insufficient evidence to justify the Court’s

16 Order; (4) the Order is against the law; and (5) the Court made errors in law. See CCP § 657.

17 The Court issued an order on February 10, 2023 approving the parties’ Private Attorneys

18 General Act (“PAGA”) settlement. See Order #2 Granting Approval of PAGA Settlement (Feb.

19 10, 2023) (“February 10, 2023 Order”). This notice is timely because it is submitted after the

20 decision is rendered but prior to entry of judgment. See CCP §§ 659(a)(1), 663a(a)(1).

21 Alternatively, the notice is timely because, even if the February 10, 2023 Order constitutes a

22 “judgment,” it is submitted within fifteen days of it being mailed to Correa’s counsel. See CCP

23 §§ 659(a)(2) and 663(a)(2).1

24 ______________________________________________________________________________
1
Correa understands the February 10, 2023 Order states that judgment will not be entered until
25 after the fee award determination. However, it remains possible the February Order nevertheless
constitutes a judgment or appealable order within the meaning of the law. See, e.g., Boeing Co. v.
26 Van Gemert, 444 U.S. 472, 480 (1980) (order awarding a common fund to a class a final
judgment even though fees and costs to be paid from the common fund not determined); Laraway
27 v. Pasadena Unified School Dist., 98 Cal.App.4th 579, 583 (2002) (stating that once a judgment or
appealable order has been entered, the time to appeal cannot be restarted by the filing of a
28 subsequent judgment making the same decision).
2
MOTION TO SET ASIDE AND VACATE JUDGMENT OR FOR A NEW TRIAL; MPA,
CASE NO. 17-CIV-01736
1 Through this notice, Correa continues to submit to the jurisdiction of this Court and

2 continues as a party to this litigation. See People ex rel. Reisig v. Broderick Boys, 149

3 Cal.App.4th 1506, 1516 (2007) (“[I]t is always permissible for the one injured [by the judgment]

4 to make himself a party to the litigation, if he has not been a party, and after he has submitted to

5 the jurisdiction of the court, to move the vacation of the decree or appealable order injuriously

6 affecting his interest, and to appeal if the motion is denied”); see also Moniz v. Adecco USA, Inc.,

7 72 Cal. App. 5th 56, 71 (2021) (“For purposes of appellate standing, an unnamed party may

8 become a party to an action . . . by filing an appealable motion to set aside and vacate the

9 judgment.”).

10 The reasons, particulars, and causes for the motions to vacate and/or for a new trial are as

11 follows:

12 1. The Court made an assumption about Adecco’s maximum exposure and the

13 settlement’s discount from maximum exposure without reference to pay period data, allowing

14 Moniz and Adecco to conceal this information from the Court. The Court also declined to

15 consider the sole bases for reducing the maximum penalty exposure in determining the settlement

16 value. The Court thus reached a decision based on insufficient information and calculated the

17 exposure and discount inaccurately and arbitrarily.

18 2. The Court approved the settlement even though it provides inadequate civil

19 penalties, inadequate programmatic relief, and overbroad release provisions.

20 3. The Court approved the settlement even though the parties did not justify the

21 settlement’s steep discount from Adecco’s total exposure (over 99.9%) with adequate fact or

22 argument.

23 4. The Court approved the settlement even though its content and its surrounding

24 circumstances raise the red flags of a collusive reverse auction.

25 5. The Court approved the settlement even though it defines PAGA Group Members

26 as including persons, such as Moniz herself, who did not sign a form agreement within the

27 covered period, while at the same time calculating exposure based on the signing of the

28 agreement.
3
MOTION TO SET ASIDE AND VACATE JUDGMENT OR FOR A NEW TRIAL; MPA,
CASE NO. 17-CIV-01736
1 6. The Court’s approval order awards Moniz $15,000 “on the basis that she is giving

2 a broader release/waiver of claims” even though: (a) she previously entered into an individual

3 settlement of her non-PAGA claims; and (b), even if she had not, settlement funds cannot be used

4 to pay for Moniz’s release of non-PAGA claims.

5 7. The Court’s approval order is otherwise erroneous and contrary to fact, and the

6 Settlement does not otherwise meet the PAGA requirements for settlement approval.

7 For these reasons and those discussed in the accompanying memorandum of points and

8 authorities and Correa’s January 18, 2023 Objections, as well as the pleadings on file in this case,

9 the Court’s February 10, 2023 order approving the settlement should be set aside and vacated

10 and/or a new settlement approval hearing should be held.

11 DATED: February 24, 2023 Respectfully submitted,

12 By: /s/ Jahan C. Sagafi
Jahan C. Sagafi
13
JAHAN C. SAGAFI (SBN 224887)
14
OUTTEN & GOLDEN LLP
One California Street, 12th Floor
15
San Francisco, CA 94111
Telephone: (415) 638-8800
16
Facsimile: (415) 638-8810
Email: jsagafi@outtengolden.com
17
JULIO SHARP-WASSERMAN*
18
OUTTEN & GOLDEN LLP
685 Third Avenue, 25th Floor
19
New York, NY 10017
Telephone: (516) 788-6824
20
Email: mscimone@outtengolden.com
Email: jsharpwasserman@outtengolden.com
21
*Admitted Pro Hac Vice
22
ROBERT A. DOLINKO (SBN 076256)
23 CHRIS BAKER (SBN 181557)
DEBORAH SCHWARTZ (SBN 208934)
24 BAKER CURTIS & SCHWARTZ, P.C.
One California St., Suite 1250
25 San Francisco, CA 94111
26 Telephone: (415) 433-1064
E-mail: rdolinko@bakerlp.com
27 E-mail: cbaker@bakerlp.com
E-mail: dschwartz@bakerlp.com
28 Attorneys for Aggrieved Party Paola Correa
4
MOTION TO SET ASIDE AND VACATE JUDGMENT OR FOR A NEW TRIAL; MPA,
CASE NO. 17-CIV-01736
1 TABLE OF CONTENTS
2 MEMORANDUM OF POINTS AND AUTHORITIES..……………… …………………………8
3 I. INTRODUCTION……………………….………………………… ……………………...8
4 II. FACTUAL AND PROCEDURAL BACKGROUND……………..……………………....9

5 III. ARGUMENT……………..…...…………………………………………………………...9
A. The Court Erred in Approving the Settlement Without Pay Period Data……. …10
6
B. The Court Erred in Approving the Settlement When the Limited Factual Record
7 Demonstrated the Settlement Was Inadequate…………………………… ….....12
8 C. The Litigation Risks Do Not Justify the Discount…………………….……….....14

9 D. The Settlement’s Illusory Injunctive Relief Has No Value… …………. …….....15
E. The Revised Settlement Is Worse Than the Original……………..……… ..…...16
10
1. The Risk Posed by Viking River Has Decreased…… …… ……...17
11
2. The PAGA Release Has Been Inappropriately Broadened, But There
12 Is No Corresponding Increase in The Settlement
Amount…………………………… ……………………………...18
13
F. The Settlement Improperly Uses The Common Fund To Pay for Moniz’s
14 Release of Non-PAGA Claim…………………… …………………………….....19
G. Indicia of Collusion Remain…………………… ………………………………...20
15
H. To Achieve Reasonableness, Moniz and Adecco Must Either Increase the
16 Settlement Amount or Omit Associates from the Release… …… ………….....23
17 IV. CONCLUSION…………………………………………………………………………...23

28
5
MOTION TO SET ASIDE AND VACATE JUDGMENT OR FOR A NEW TRIAL; MPA,
CASE NO. 17-CIV-01736
1 TABLE OF AUTHORITIES

2 CASES PAGE(S)

3 Amaral v. Cintas Corp. No. 2,
163 Cal.App.4th 1157 (2008) ................................................................................................... 10
4

5 Daniels v. Aeropostale West, Inc.,
No. 12 Civ. 05755, 2014 WL 2215708 (N.D. Cal. May 29, 2014) ......................................... 14
6

7 Doe v. Google,
54 Cal.App.5th 948 (2020) ........................................................................................................ 9
8

9 Garcia v. Harkins Admin. Servs.,
No. 18 Civ. 02314, 2020 U.S. Dist. LEXIS 259267 (C.D. Cal. June 4, 2020)......................... 14
10

11 Gonzalez v. Corecivic of Tenn., LLC,
No. 16 Civ. 01891, 2018 U.S. Dist. LEXIS 156549 (E.D. Cal. Sep. 12, 2018) ................. 10, 14
12

13 Hamilton v. Juul Labs Inc.,
No. 20 Civ. 03710, 2021 WL 5331451 (N.D. Cal. Nov. 16, 2021) .............................. 11, 16, 20
14

15 Johnson v. Maxim Healthcare Service, Inc.,
66 Cal. App. 5th 924 (2021) ............................................................................................... 11, 15
16

17 Molen v. Friedman
64 Cal.App.4th 1149, 1156-57 (1998) ......................................................................................... 9
18

19 Moniz v. Adecco,
2020 WL 741104 (Cal.App., Feb. 2, 2020) .......................................................................... 9, 23
20

21 People v. Barboza,
29 Cal.3d 375 (1981) .......................................................................................................... 22, 23
22

23 In re Vitamin Cases,
110 Cal.App.4th 1041 (2001) ................................................................................................... 14
24

25 STATUTES
26 Cal. Lab. Code § 232 ...................................................................................................................... 11

27 Cal. Lab. Code § 432 ...................................................................................................................... 11
Cal. Lab. Code § 1102 ........................................................................................................ 11, 13, 15
28
6
MOTION TO SET ASIDE AND VACATE JUDGMENT OR FOR A NEW TRIAL; MPA,
CASE NO. 17-CIV-01736
1 Cal. Lab. Code § 1197 .................................................................................................................... 11

2 Cal. Lab. Code § 2699 .................................................................................................. 10, 14, 15, 20
California Code of Civil Procedure § 657 ........................................................................................ 9
3
California Code of Civil Procedure § 663 .................................................................................. 9, 20
4
California Code of Civil Procedure § 906 ........................................................................................ 9
5
CRPC 1.7(b).................................................................................................................................... 23
6
CRPC 1.7(c) .................................................................................................................................... 23
7

28
7
MOTION TO SET ASIDE AND VACATE JUDGMENT OR FOR A NEW TRIAL; MPA,
CASE NO. 17-CIV-01736
1 MEMORANDUM OF POINTS AND AUTHORITIES

2 I. INTRODUCTION

3 The parties’ PAGA settlement does not satisfy the approval standards for PAGA

4 settlements, because it is inadequately justified, substantively inadequate, and overbroad, and

5 because the circumstances of the settlement raise the red flags of a collusion and a reverse

6 auction. Accordingly, the Court should not have granted settlement approval, and its February

7 10, 2023 order approving the settlement should be set aside and vacated.

8 Although Moniz represented in her prior settlement approval submissions that $158 per

9 person was a reasonable value for Colleague-based claims, and although Moniz has since

10 conceded that Associate-based claims have equal value, this settlement offers the Associates less

11 than $12 per person. This is inadequate.

12 Viewed in aggregate, the $4.5 million fund is insufficient to satisfy PAGA’s statutory

13 requirement that the penalty punish and deter the violations at issue. The $4.5 million amount is

14 not enough to punish violations against over 60,000 aggrieved employees, who collectively have

15 millions of pay periods and experienced multiple violations per pay period amounting to billions

16 of dollars of penalty exposure (based on the calculations required by the text of the Labor Code).

17 This is especially the case given the largely illusory programmatic provided to current and former

18 Adecco employees. Adecco is a massive employer, and its legal violations had a significant

19 systemic impact that warrants a more substantial penalty.

20 The inadequacy of the settlement amount is unsurprising given the context of settlement.

21 Moniz’s litigation, from inception to the PAGA letter and up until settlement negotiations,

22 focused on the approximately 570 Colleagues, who represent less than 1% aggrieved employees

23 covered by the current settlement. At the settlement table in 2019, the parties decided at the last

24 minute to release the claims of over 60,000 Associates for an inadequate bargain price,

25 amplifying attorneys’ fees and gifting Adecco a windfall in the form of a broader release, while

26 helping Adecco defend against active litigation and substantial potential liability in Correa’s Doe

27 v. Google PAGA case. Given this patent self-dealing, the Court did not sufficiently scrutinize the

28 settlement. Rather, the Court approved a settlement that was negotiated in violation of a Court
8
MOTION TO SET ASIDE AND VACATE JUDGMENT OR FOR A NEW TRIAL; MPA,
CASE NO. 17-CIV-01736
1 order requiring Moniz to pay to Adecco $20,000 and her counsel to pay more than $1,500,000.

2 The settlement also includes, as determined by the Court, a provision through which the State and

3 PAGA Group is required to pay Moniz $15,000 – not for her service – but rather for a release of

4 already released non-PAGA claims that benefits only Adecco.

5 In conclusion, the settlement is inadequate and cannot be approved without either

6 narrowing the scope to focus on Colleagues form agreements or increasing the settlement

7 consideration, with Correa or another Associate as a non-conflicted proper PAGA representative.

8 II. FACTUAL AND PROCEDURAL BACKGROUND

9 The factual and procedural background to Moniz’s motion for settlement approval is

10 complex, and Correa refers the Court to her prior submissions rather than repeat that history here.

11 See Correa’s Objs. And Opp. to Renewed Motion for Settlement Approval (May 24, 2022)

12 (“2022 Opp.”) at 8-10; Correa’s Objs. And Opp. to Renewed Motion for Settlement Approval

13 (January 18, 2023) (“2023 Opp.”) at 2-3. This procedural history is also detailed in the appellate

14 decisions in Moniz v. Adecco, 2020 WL 741104 (Cal.App., Feb. 2, 2020) (unpublished) (Moniz I),

15 Doe v. Google, 54 Cal.App.5th 948 (2020), and Moniz v. Adecco, 72 Cal.App.5th 56 (2021)

16 (Moniz II).

17 III. ARGUMENT

18 The Court must vacate its judgment when it has an incorrect or erroneous legal basis that

19 is not consistent with or supported by the facts. CCP § 663. The Court must modify or vacate its

20 decision, and grant a new or further trial (e.g., settlement hearing) when there are irregularities in

21 the proceedings of the court, an abuse of discretion, inadequate damages, insufficient evidence to

22 justify the decision, the decision is against the law, or there are errors in law. CCP § 657(1)(4)-

23 (7). Molen v. Friedman, 64 Cal.App.4th 1149, 1156-57 (1998). As explained both below, and in

24 previous filings, the Court must vacate its judgment for all the above reasons. 2 Through the

25 ______________________________________________________________________________
26 2
Through her prior motion practice and submissions, Correa has raised numerous arguments and
objections to the settlement and in support of their motion for fees and an incentive payment.
27
Correa incorporates all such objections, submissions, and arguments by reference here and
28 expressly preserve them, to the extent necessary, for appeal. See CCP § 906 (“upon an appeal . . .
the reviewing court may review the verdict and decision and any intermediate ruling, proceeding,
9
MOTION TO SET ASIDE AND VACATE JUDGMENT OR FOR A NEW TRIAL; MPA,
CASE NO. 17-CIV-01736
1 current notice of intention and MPA, Correa seeks to focus this Court’s attention on the

2 following:

3 A. The Court Erred in Approving the Settlement Without Pay Period Data.

4 The Court approved the settlement based on its assessment of Adecco’s maximum

5 exposure and its calculation of the discount the settlement represents. See February 10, 2023

6 Order at 13-14. But the Court did not know how many pay periods were at issue and thus was not

7 able to make these crucial calculations accurately.

8 This pay period data is essential to assessing the settlement’s fairness and adequacy,

9 because by the text of the PAGA statute, liability turns on the quantity of pay periods. PAGA

10 sets the default penalty for a Labor Code violation at either $100 or $200 for each employee per

11 pay period for each initial or subsequent violation. See Labor Code § 2699(f). These per-pay

12 period penalties are mandatory, and any departure from the maximum must be justified based on

13 enumerated factors. See Labor Code § 2699(e)(2); Amaral v. Cintas Corp. No. 2, 163 Cal.App.4th

14 1157, 1213 (2008). The Court thus needed pay period data to conduct this legally required

15 analysis.

16 The Court erred in approving the settlement without pay period data, because without

17 knowing the number of pay periods at issue, the Court was unable to quantify the discount or

18 determine whether the discount was justified. See Gonzalez v. Corecivic of Tenn., LLC, No. 16

19 Civ. 01891, 2018 U.S. Dist. LEXIS 156549, at *26 (E.D. Cal. Sep. 12, 2018). The Court was

20 also unable to determine if the settlement allocation between Associate and Colleague claims was

21 proper given that Associates have twice the pay periods of Colleagues (because they are paid

22 weekly, not bi-monthly) and should therefore, presumably, be entitled to twice the penalties.

23 “The court must be convinced that the plaintiff knows the value of the claims [s]he proposes to

24 settle and can adequately explain why [s]he has discounted them in reaching that settlement.” Id.

25 at *26-27. Because Moniz refused to state how many pay periods are at issue, and the allocation

26 of those pay periods, the Court should have concluded that she did not know the value of the

27 ______________________________________________________________________________

28 order, or decision which involves the merits or necessarily affects the judgment or order appealed
from. . . .”).
10
MOTION TO SET ASIDE AND VACATE JUDGMENT OR FOR A NEW TRIAL; MPA,
CASE NO. 17-CIV-01736
1 Associate-based claims she was releasing, and the Court should have denied settlement approval.

2 Moniz argued to this Court, based on her erroneous interpretation of Johnson v. Maxim

3 Healthcare Service, Inc., 66 Cal. App. 5th 924 (2021), that every aggrieved employee has only

4 one pay period, because the violations here arise from the act of signing an illegal agreement

5 upon hire, see Renewed Motion to Approve Settlement (Dec. 27, 2022) (“December 2022

6 Motion”) at 13-15. But this justification for withholding pay period data is implausible for

7 multiple reasons.

8 First, while Johnson involved only a claim under Labor Code § 432.5, which states no

9 employer shall require any employee to agree, in writing, to an illegal contract term, see Johnson,

10 66 Cal. App. 5th at 927 & n.2, several of the PAGA claims being released in this settlement

11 clearly reflect the Legislature’s determination that employers shall not restrict their employees’

12 speech through policies or otherwise, see Labor Code §§ 232(a), 232.5(a), 1102.5(a), and

13 1197.5(k). To prevail on these claims, the employee need not show that she signed anything, and

14 nothing about the text of those statutes suggests that violations must occur upon hire.

15 Accordingly, other courts have calculated exposure under Labor Code §§ 232, 232.5, and 1197.5

16 on a per pay period basis. See, e.g., Hamilton v. Juul Labs Inc., No. 20 Civ. 03710, 2021 WL

17 5331451 * 9-11 (N.D. Cal. Nov. 16, 2021) (and cases cited therein).

18 Second, Johnson does not contain any holding regarding whether penalties are warranted

19 for continuing § 432.5 violations – rather, the Johnson court explicitly declined to address this

20 issue. See id. at 932 n.5. Thus, in generous terms, Johnson suggests a limited litigation risk; it

21 certainly does not justify withholding all pay period data from the court on the assumption that

22 every aggrieved employee necessarily experienced a violation during only one pay period.

23 Third, Moniz’s assumption that each employee experienced one violation at the time of

24 hire contradicts the Settlement Agreement. The Settlement Agreement provides $11 to every

25 person employed at Adecco in the Covered period, regardless of when they started their

26 employment or signed any agreement. See Declaration of David Leimbach in Support of

27 Renewed Motion to Approve Settlement (December 28, 2022), Ex. 1 (November 2022

28 Settlement) § I(E), (O). Moniz and Adecco’s interpretation of Johnson thus logically cannot
11
MOTION TO SET ASIDE AND VACATE JUDGMENT OR FOR A NEW TRIAL; MPA,
CASE NO. 17-CIV-01736
1 justify this settlement. Under Moniz’s latest reasoning, the settlement dilutes the amounts due

2 employees who signed form agreements during the covered period (and are thus aggrieved) by

3 including within the scope of the release employees (like Moniz herself) who did not sign a form

4 agreement during the covered period. Moniz’s Johnson argument is a post-hoc rationalization for

5 the inadequacy of the settlement amount and a poor excuse for the parties’ decision to withhold

6 pay period data in an effort to obscure that inadequacy.

7 Fourth, there is an obvious counterargument to the position that an employee who signs an

8 illegal agreement only experiences a violation at the moment of signature: the unlawful

9 agreement, once signed, remains in effect such that each successive pay period results in a new

10 PAGA penalty under the continuous accrual or continuing violation doctrines. While employees

11 agree to unlawful speech provisions upon hire, they are subject to those unlawful agreements

12 throughout their employment. This was the Moniz parties’ initial position in this case.

13 (2019.05.13 Joint Motion pp. 7-9). These competing positions would have been tested through

14 litigation; the prospect that Adecco’s argument against the existence of continuing violations

15 might succeed is a litigation risk, not a basis for excluding the possibility of penalties for

16 continuing violations from exposure analysis.

17 In its order approving the settlement, the Court stated that “[t]here is a lack of evidence of

18 any actual multiple violations, given that the employee entered into the allegedly unlawful

19 agreement at the start of employment,” and proceeded to assess exposure without considering the

20 quantity of pay periods at issue. February 10, 2023 Order at 13. But the Court erred in declining

21 to justify its assumption of one pay period per employee and in declining to address any of

22 Correa’s objections regarding this assumption.

23 B. The Court Erred in Approving the Settlement When the Limited Factual
Record Demonstrated the Settlement Was Inadequate.
24
The Court erred in approving the PAGA settlement, because the factual record indicates
25
that the settlement does not provide sufficient civil penalties.
26
In her initial motion for settlement approval in 2019, Moniz herself calculated Adecco’s
27
exposure at more than $5.6 billion. See Renewed Memorandum of Points and Authorities in
28
12
MOTION TO SET ASIDE AND VACATE JUDGMENT OR FOR A NEW TRIAL; MPA,
CASE NO. 17-CIV-01736
1 Support of Motion to Approve Settlement at p. 12 n.6 (Sep. 6, 2019) (“The maximum possible

2 penalties for Adecco’s Associates is astronomically high. By Plaintiff [Moniz]’s calculation[,]

3 1% of such exposure would be more than $56 million.”). If that is correct, this settlement

4 potentially marks more than a 99.9% discount on Adecco’s maximum exposure, which is surely

5 inadequate. Neither the parties nor this Court have addressed Moniz’s prior maximum exposure

6 calculation or attempted to justify this apparent near-100% discount.

7 Mathematical realities strongly suggest that Moniz’s prior exposure calculation was, if

8 anything, an understatement. This settlement encompasses over 60,000 aggrieved employees.

9 Almost all aggrieved employees have 52 pay periods per year, because Associates are paid

10 weekly. See Plaintiff’s Notice of Unsealed Court Records, Ex. 4 (Jan. 13, 2020). The settlement

11 covers a period of well over three years. See November 2022 Settlement § I(E). There are five

12 Labor Code violations at issue, four of which carry a penalty of $200 per pay period for each

13 subsequent violation. Roughly, 60,000 aggrieved employees x 150 pay periods x 5 violations per

14 pay period x $200 = $9 billion. And this number does not include the civil penalties of up to

15 $10,000 per employee under Labor Code § 1102.5.

16 The Court erred in approving the settlement without receiving or considering any facts

17 that would allow it to do the math required to determine the reasonableness of the settlement.

18 Tellingly, even as recently as May 2022, Moniz and Adecco valued the claims at issue at

19 $158 per Colleague. See generally Renewed Motion to Approve Settlement at 19-22 (May 11,

20 2022) (“May 2022 Motion”). At that time, Moniz noted the following litigation risks: (1)

21 penalties for continuing violations might not be available for some claims; (2) the Court might not

22 permit stacking of penalties; (3) the Court might exercise its discretion to reduce PAGA penalties;

23 and (4) the Supreme Court’s pending decision in Viking River Cruises v. Moriana might preclude

24 plaintiffs from bringing PAGA claims. See May 2022 Motion at 19-22. Moniz also stated that a

25 per-person value approximately equal to that which the present settlement offers was a nominal

26 amount meant to compensate for the release of worthless claims. See May 2022 Motion at 23

27 (referring to $10 per-person as a “small amount” warranted given the unique “weakness” of

28 Associate-based claims). In her December 2022 Motion, Moniz restated identical litigation risks,
13
MOTION TO SET ASIDE AND VACATE JUDGMENT OR FOR A NEW TRIAL; MPA,
CASE NO. 17-CIV-01736
1 but she concluded that a per-person value approximately 99% less than $158, and virtually equal

2 to the concededly inadequate prior per-Associate amount, was reasonable. See December 2022

3 Motion at 13-17. The parties did not point to any new facts or law to justify these seemingly

4 contradictory representations.

5 The Court erred in declining to address these discrepancies and declining to probe obvious

6 post-hoc rationalizations for an inadequate settlement amount that has remained unchanged since

7 2019.3

8 C. The Litigation Risks Do Not Justify the Discount.

9 While presenting a settlement providing a near 100% discount on maximum exposure, the

10 parties failed to identify any real litigation risks. The Court erred in approving the settlement

11 based only on vague and implausible assertions regarding these risks.

12 Moniz asserted that a significant settlement discount is warranted by the risks that

13 penalties for continuing violations might not be available and that the Court might not permit

14 stacking of penalties. See December 2022 Motion at 14-16. But these are not real risks.

15 First, PAGA permits the “stacking” of penalties. See Gonzalez, 2018 U.S. Dist. LEXIS

16 156549, at *24 (collecting cases). In its Order Granting Settlement Approval, the Court stated in

17 a footnote that penalties could not be stacked in this case, because the multiple violations at issue

18 arise from the same employment agreement. See February 10, 2023 Order at 13 n.1. But the

19 Court did not cite any legal support for this proposition, see id., which does not seem to have any

20 basis in case law. See, e.g., Garcia v. Harkins Admin. Servs., No. 18 Civ. 02314, 2020 U.S. Dist.

21 LEXIS 259267, at *38 (C.D. Cal. June 4, 2020) (rejecting arguments against stacking as a

22 justification for a steep discount from maximum exposure, noting that “[f]ederal district courts in

23 California – following the plain language of PAGA that allows penalties for ‘each aggrieved

24 employee per pay period,’ Cal. Lab. Code § 2699 – have consistently allowed the ‘stacking’

26 ______________________________________________________________________________
3
Post-hoc rationalizations for a settlement are inherently suspect, strongly suggesting that
27
the negotiations leading to the settlement were either uninformed or collusive. See Daniels v.
28 Aeropostale West, Inc., No. 12 Civ. 05755, 2014 WL 2215708 (N.D. Cal. May 29, 2014), at *3;
In re Vitamin Cases, 110 Cal.App.4th 1041 (2001).
14
MOTION TO SET ASIDE AND VACATE JUDGMENT OR FOR A NEW TRIAL; MPA,
CASE NO. 17-CIV-01736
1 of PAGA penalties, such that each violation of the California Labor Code during each pay period

2 is subject to a separate penalty.”) (emphasis added).

3 Despite Moniz’s assertions, Johnson does not preclude penalties for continuing violations.

4 The Johnson court explicitly declined to address this issue. See 66 Cal. App. 5th at 932 n.5.

5 Moreover, the argument that violations predicated on signing an illegal agreement occur only at

6 the moment of signature is unmeritorious. See supra Part III(B). The Court erred in crediting this

7 false legal assumption without any reasoning. See February 10, 2023 Order at 13.

8 The Court also erred by excluding from the Court’s exposure analysis § 1102.5 violations

9 based on the assumption that they would be reduced to $1.00 per employee, or one/ten

10 thousandths of the maximum. This determination lacked basis because the policy of requiring

11 employees to sign form agreements prohibiting the disclosure of information about unlawful

12 conduct itself violates § 1102.5.

13 Finally, the Court erred in concluding that it would utilize its discretion to award less than
14 the maximum penalties without explaining the bases for a nearly 100% reduction from the
15 maximum. Labor Code § 2699(e)(2) requires the Court to award the maximum penalties unless,
16 based on the facts and circumstances of the particular case, “to do otherwise would result in an
17 award that is unjust, arbitrary, oppressive or confiscatory.” Here, the parties provided no
18 evidence as to why a settlement in excess of $4.5M would meet any of these requirements.
19 Adecco is the largest staffing firm in the world (with a 5% market share). (2019.09.19 Baker
20 Declaration ISO Objections ¶ 6, BD-126). It has more than 100,000 clients. (BD-121). In 2018,
21 Adecco claimed revenue in excess of twenty-three billion euros and gross profits in excess of
22 more than four billion euros. (BD-221-223). If there is any company that should be held to
23 account for its violations of the Labor Code, it is the world’s largest employer of temporary labor.
24 The Court erred by concluding otherwise.
25 D. The Settlement’s Illusory Injunctive Relief Has No Value.

26 Moniz attempted to inflate the settlement’s value by pointing to its non-monetary relief

27 provisions. See December 2022 Motion at 3-4. But the settlement provides only illusory

28
15
MOTION TO SET ASIDE AND VACATE JUDGMENT OR FOR A NEW TRIAL; MPA,
CASE NO. 17-CIV-01736
1 injunctive relief, and the Court erred in failing to analyze the settlement injunctive relief provision

2 at all. See February 10, 2023 Order at 11.

3 Under this settlement, Adecco agrees, vaguely, “to revise its Colleague Agreement and

4 Associate Agreement and related policies which allegedly limit employees from disclosing their

5 own salary, wages, benefits and related working conditions; and/or from discussing same with

6 others; and/or from engaging in whistleblowing activity.” November 2022 Settlement § III(D).

7 This promise is illusory: Adecco agrees to modify its NDAs and related policies in an unspecific

8 way at an unspecified time and nothing more. There is also no evidence that Adecco has revised

9 its policies in any way in the four years since the initial settlement.

10 Hamilton v. Juul Labs Inc., No. 20 Civ. 03710, 2021 WL 5331451 (N.D. Cal. Nov. 16,

11 2021) is an illustrative contrast. There, the district court approved a gag rule PAGA settlement

12 based on a $34 per-pay-period calculation, a substantial discount of 97.8%. Id. at *9. It did so

13 because Juul began using a new NDA and revised its illegal policies in response to the plaintiff’s

14 litigation, and because the settlement provided extensive programmatic relief. Id. at *5-6. The

15 court reasoned the extensive relief arguably justified a greater settlement discount. Id. at *11. It

16 noted that “the full value of injunctive relief is likely significantly greater than $956,000 [$34.00

17 a pay period] because the programmatic relief is directly responsive and wide-ranging in

18 redressing the theoretical harms to speech that Plaintiff alleged.” Id. at * 12 n.1.

19 Even though the nature of injunctive relief is an important aspect of a settlement’s value

20 and thus material to its adequacy, the Court credited the parties’ misleading assertions about the

21 value of the settlement’s injunctive relief without scrutiny and without reasoning. In this, the

22 Court neglected important facts relevant to settlement approval and failed to conduct the

23 necessary legal analysis in determining the settlement’s adequacy.

24 E. The Revised Settlement Is Worse Than the Original.

25 Not only have Moniz and Adecco failed to increase the inadequate June 2019 Settlement

26 amount; they have made the settlement even more inadequate, by broadening the release

27 provisions, and by maintaining the same settlement amount despite events since the May 2022

28 Motion that have increased the value of the case. The Court erred in ignoring Correa’s objections
16
MOTION TO SET ASIDE AND VACATE JUDGMENT OR FOR A NEW TRIAL; MPA,
CASE NO. 17-CIV-01736
1 to this effect in its February 10, 2023 Order, and in failing to consider unique aspects of the

2 November 2022 settlement that bore on its adequacy.

3 1. The Risk Posed by Viking River Has Decreased.

4 Moniz relied heavily on Viking River to justify the settlement discount, just as she did in

5 May 2022, before the Viking River decision was issued. But neither Moniz in her December 2022

6 Motion, nor the Court in its February 10, 2023 Order, acknowledged the effect of the decision

7 itself or of post-Viking River developments that have increased the value of the claims in this

8 case. Given that Viking River manifestly posed a lesser risk than it did at the time of the May

9 2022 Motion, the Court should have considered these subsequent developments in assessing

10 litigation risk and evaluating the settlement’s value.

11 In repeating her argument from the May 2022 Motion that a settlement discount is

12 justified by Viking River, compare May 2022 Motion at 22-23 with December 2022 Motion at 16-

13 17, Moniz ignored subsequent case law, including the Doe court’s order on Adecco’s recent

14 motion to compel, that had minimized that risk. Moniz asserted that “[i]f the California Supreme

15 Court confirms Viking River’s understanding of California standing law in these PAGA cases,

16 then this case may effectively be worth $100, and there would be no ability to pursue civil

17 penalties for any Aggrieved Employee other than the named plaintiff.” December 2022 Motion at

18 17. But Moniz did not acknowledge the curren

Case Info

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Weiner, Marie S. Track Judge’s New Case

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Document Filed Date

April 06, 2023

Case Filing Date

April 18, 2017

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Parties

ADECCO USA, INC. Defendant
BAKER, CHRIS Attorney
Baker Curtis & Schwartz, P.C. Intervenor (participant)
CORREA, PAOLA Intervenor (participant)
COTTRELL, CAROLYN HUNT Attorney for the Plaintiff
DOES 1 TO 50, INCLUSIVE Defendant
DOES 1 TO 9 Defendant
MONIZ, RACHEL Plaintiff
SIEGEL, ADAM Attorney for the Defendant
David Leimbach Attorneys for Plaintiffs
Dylan Carp Attorneys for Defendants
Scott Jang Attorneys for Defendants
Mariko Ashley Attorneys for Defendants
Steven Blackburn Attorney
Deborah Schwartz Attorneys for Plaintiffs
Matthew Goodin Attorney
Linda Inscoe Attorneys for Defendants
Christopher Campbell Attorneys for Defendants
Christina Teeter Attorneys for Defendants
John Winer Attorney
Mia Farber Attorney
Aaron Chiu Attorneys for Defendants
Kyle Bates Attorneys for Plaintiffs
David Balter Attorney
Patricia Kelly Attorney
Michael Smith Attorney
Cameron Fox Attorneys for Defendants
Ankush Dhupar Attorneys for Defendants
Zachary Hutton Attorney
Christopher Baker Attorney
Philip Johnson Attorney
Vanessa Ho Attorney
Jahan Sagafi Attorney
David Chen Attorney
Robert Dolinko Attorneys for Plaintiffs
Keenan Klein Attorney
Adam Truong Attorneys for Defendants
Scott Gordon Attorneys for Plaintiffs
David Rotman Attorneys for Plaintiffs
Robert Yang Attorneys for Defendants
Rachel Dempsey Attorneys for Plaintiffs
Blake Bertagna Attorney
Kyla Gibboney Attorneys for Plaintiffs
Christopher Jagard Attorney
Dan Gildor Attorney
Molly Frandsen Attorney
Adam Yarian Attorney
Charles Jones Attorney
Kelly McInerney Attorney
Matthew Righetti Attorney
Mark Rudy Attorney
Paul Holton Attorneys for Plaintiffs
Felicia Davis Attorneys for Defendants
Zachary Perryman Attorneys for Defendants
Kyle Graham Attorney
Michael Curtis Attorney
Christopher DiPietro Attorney

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Request,Application: RACHEL MONIZ vs ADECCO USA, INC.

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