Motion to Approve or Confirm Settlement in Jeffery Torosian vs. The Wonderful Company, L.L.C.| Trellis.Law

On January 01, 1900 a Motion-Secondary was filed involving a dispute between Torosian, Jeffery, and The Wonderful Company, L.L.C., for 36 Unlimited - Wrongful Termination in the District Court of Fresno County.

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1 Michael J.F. Smith, #109426
John L. Migliazzo, # 272066 E-FILED
2 Michael J.F. Smith, A Professional Corporation 10/2/2020 2:31 PM
3
1391 West Shaw Avenue, Suite D Superior Court of California
Fresno, California 93711 County of Fresno
4 (559) 229-3900 By: A. Ramos, Deputy
Fax (559) 229-3903
5

6 Attorneys for Plaintiff,
Jeffery Torosian
7

8
SUPERIOR COURT OF THE STATE OF CALIFORNIA
9
FOR THE COUNTY OF FRESNO
10
JEFFERY TOROSIAN, an individual, ) Case No.: 17CECG03866
11 individually and on behalf of himself and all )
others similarly situated, under the Private ) MEMORANDUM OF POINTS AND
12 ) AUTHORITIES IN SUPPORT OF
Attorney General Act (PAGA), pursuant to
Labor Code §§ 2698, et seq.
) MOTION FOR APPROVAL OF
13 ) SETTLEMENT UNDER THE
14 Plaintiff,
) CALIFORNIA PRIVATE
) ATTORNEYS GENERAL ACT OF
15 ) 2004 (“PAGA”)
v. )
16 ) Date: October 27, 2020
THE WONDERFUL COMPANY LLC, a ) Time: 3:30 p.m.
17 California Limited Liability Company; ) Dept.: 503
)
18
Defendant. ) The Honorable Kristi C. Kapetan
)
19
)
20

21 Plaintiff, Jeffery Torosian, hereby submits the following Memorandum of Points and
22 Authorities in Support of Motion for Approval of California Private Attorneys General Act
23 (PAGA) Settlement Agreement; Request for Attorneys’ Fees and Costs:
24 ///
25 ///
26

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR
APPROVAL OF SETTLEMENT UNDER THE CALIFORNIA PRIVATE ATTORNEYS
GENERAL ACT OF 2004 (“PAGA”)
i
1 TABLE OF CONTENTS
2 I. INTRODUCTION …………………………………..………………………………...1
3 II. FACTUAL BACKGROUND ………….…….........…………………………………..1
4 A. Parties…………………………………………………………………………. 1
5 B. TWC’s Policies / Plaintiff as an Aggrieved Employee……………..………… 2
6 i) September 11, 2016 to December 31, 2018………………..........................2
7 ii) January 1, 2019 Change of Policy; Reclassification to
8 Non-Exempt Status…………………………………………..…………… 4
9 III. SUMMARY OF PLAINTIFF’S CLAIMS AND TWC’S DEFENSES........................ 4
10 IV. PROCEDURAL BACKGROUND…………………………………………………….7
11 A. Procedural History of the Action; Substantial Discovery……………………...7
12 V. LEGAL STANDARD FOR APPROVAL OF PAGA SETTLEMENT .......……….....9
13
VI. SUMMARY OF THE SETTLEMENT .......…………………………………………..9
14
A. Value of the Settlement / Lawsuit……………………………………………...9
15
B. Payment of the PAGA Penalties…………………………………………...…10
16
C. The Release Is Narrowly Tailored and Specifically Carves Out Individual
17

18 Claims of the Covered Employees………………………………………..…..10

19 D. Notice of the Settlement Is Being Provided to LWDA and Covered

20 Employees)……................................................................................................11
21 E. Plaintiff’s Individual Settlement Is Justified………………………………….11
22
VII. SETTLEMENT IS FAIR, ADEQUATE, AND REASONABLE .......………………12
23
A. The Settlement is Presumed Fair……………………………………………...12
24
B. The Settlement is the Product of Arm’s Length Negotiations………………..12
25
C. The Strength of Plaintiff’s Case, the Settlement Amount, and The Risk,
26
Expense, Complexity, and Duration of Further Litigation Favor Settlement...12
27

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR
APPROVAL OF SETTLEMENT UNDER THE CALIFORNIA PRIVATE ATTORNEYS
GENERAL ACT OF 2004 (“PAGA”)
ii
1 VIII. REQUEST FOR ATTORNEYS’ FEES AND COSTS .......………….………………14
2 A. Plaintiff Has a Statutory Right to Attorneys’ Fees……………………………14
3
B. Plaintiff’s Lodestar Is an Appropriate Method of Calculating Fees………….14
4
C. The Number of Hours Expended by Counsel in this Case is Reasonable……14
5
D. Plaintiff’s Counsel’s Rates are Reasonable…………………………………..15
6
E. Plaintiff’s Costs Advanced are Reasonable……………………………..……15
7

8 IX. CONCLUSION.......………………………….……………............………………….15

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR
APPROVAL OF SETTLEMENT UNDER THE CALIFORNIA PRIVATE ATTORNEYS
GENERAL ACT OF 2004 (“PAGA”)
iii
1
TABLE OF AUTHORITIES
2
United States Supreme Court
3
Whelan v. United States (1980) 445 U.S. 684………………………………………………...13
4

5
California Supreme Court Cases
6
Arias v. Superior Court (2009) 46 Cal.4th 969……………………………………….........9, 11
7
Press v. Lucky Stores (1983) 34 Cal.3d 311………………………………………...………..14
8
Ramirez v. Yosemite Water Co. (1999) 20 Cal.4th 785…………………………………….…..4
9

10
California Appellate Cases
11
Cummings v. Benco Building Services (1992) 11 Cal.App.4th 1383…………………………15
12
Dunk v. Ford Motor Company (1996) 48 Cal.App 4th 1974…………………………………12
13
Hernandez v. Pacific Bell Tel. Co. (2018) 29 Cal.App.5th 131……………………………...…7
14
Roos v. Honeywell International, Inc. (2015) 241 Cal.App.4th 1472…………………………14
15
Thurman v. Bayshore Transit Management, Inc. (2012) 203 Cal.App.4th 1112……………...13
16

17
California Codes
18
Code of Civil Procedure § 1021.5…………………………………………………………….14
19
Labor Code §§ 201, 202, 203, 204, 210, 226, 226.2, 226.3, 226.6, 510, 558, 558.1 1174,
20
1174.5, 1175, 1194, 1194.2, 1197, 1197.1, 2698, 2699, 2802............................. passim
21

22
Others
23
Cal. Code Regs., tit. 8, § 11040 [Wage Order 4]....................................................................5, 6
24

25
Secondary Sourcese
26
DLSE Enforcement Manual (June 2002), Item No. 54.8.......................................................... 5
27

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR
APPROVAL OF SETTLEMENT UNDER THE CALIFORNIA PRIVATE ATTORNEYS
GENERAL ACT OF 2004 (“PAGA”)
iv
1 Federal Authorities
2 Aguirre v. Genesis Logistics (C.D. Cal. Dec. 30, 2013 No. SACV-12-00687-JVS)……...….13
3 Fleming v. Covidien, Inc. (C.D. Cal. Aug. 12, 2011 No. ED-CV10-01487-RGK)…………..13
4 Gutilla v. Aerotek, Inc. (E.D.Cal. Mar. 21, 2017, No. 1:15-cv-00191-DAD-BAM……………….9
5 Hanlon v. Chrysler Comm. (9th Cir. 1998) 150 F.3d 1011………………………………...…12
6 In re Mega Fin. Corp. Securities Litigation (9th Cir. 2000) 213 F.3d 454…………………...12
7 In re Warner Communications Sec. Lit. (S.D.N.Y. 1985) 198 F.2d 35 ……………………...12
8 O'Connor v. Uber Techs., Inc., 201 F.Supp.3d 1110, 1133 (N.D. Cal. 2016)………………….….9
9 Ochoa-Hernandez v. Cjaders Foods, Inc.,
10 2010 WL 1340777, at *4 (N.D. Cal. Apr. 2, 2010)…………………………………….9
11

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR
APPROVAL OF SETTLEMENT UNDER THE CALIFORNIA PRIVATE ATTORNEYS
GENERAL ACT OF 2004 (“PAGA”)
v
1 I. INTRODUCTION
2 The parties seek approval of a settlement in accordance with the California
3 Private Attorneys General Act of 2004 (“PAGA”). The parties seek a PAGA-only non-
4 reversionary settlement of $125,639.25.1 The settlement includes PAGA penalty
5 payments to the LWDA and 16 “present and former non-exempt California employees of
6 Defendant in the position of College Success Specialists, College Success Manager, or
7 those with similar duties and/or similar titles from the period of September 11, 2016 to
8 the date of the entry of the court order approving this settlement (“Covered
9 Employees”).” (PAGA Settlement Agreement, Exh. 1, ¶ 1.0.)
10 This is a very good result for both the LWDA and Covered Employees. In addition to
11 PAGA payments, TWC has taken this lawsuit seriously and changed its policies, and paid
12 additional money to Covered Employees via Pick-Up-Stix settlement agreements. Plaintiff has
13 been a catalyst for a successful result.
14 II. FACTUAL BACKGROUND
15 A. Parties.
16 TWC is privately held company that grows, harvests, bottles, packages, and markets
17 various agricultural products. TWC created the “College Success Program” to provide
18 students who are receiving the Wonderful Education College Scholarship with academic
19 support through his or her college graduation. (RJN, Exh. 1., Field Decl. ¶ 2)
20 TWC employed “College Success Specialists” to serve as academic advisors for
21 Wonderful Scholar college students, assisting in areas like course selection, tutoring, and
22 financial aid form completion. (RJN, Exh. 1, Field Decl. ¶ 3; Torosian Decl. ¶ 2.) Specialists
23 are assigned to specific territories and serve the students that attend college in their area. The
24 size of each Specialist’s territories vary, as does the number of schools and students a
25 Specialist might visit. (Id., at ¶ 4.)
26 Plaintiff was hired August 8, 2016, and worked until June 6, 2017 at which time he
27
1
28 Separate and apart from PAGA, TWIC will pay Plaintiff $40,000 in exchange for a release of
individual claims, $30,000 in additional attorneys’ fees on the individual claims, and $3,360.75 for
actual costs.
MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR
APPROVAL OF SETTLEMENT UNDER THE CALIFORNIA PRIVATE ATTORNEYS
GENERAL ACT OF 2004 (“PAGA”)
1
1 separated from TWC. (Torosian Decl. ¶ 3.) He was employed as a “Specialist,” performing
2 the same tasks described above. (Id. at ¶ 2, and Exh. 1) For reasons set forth below, Plaintiff is
3 an “aggrieved employee” under PAGA.
4 B. TWC Policies / Plaintiff as an Aggrieved Employee.
5 i) September 11, 2016 to December 31, 2018.
6 Plaintiff was classified as an exempt, salaried employee. (Torosian Decl. ¶ 4) So he
7 was not eligible to be paid for hours worked in excess of 8 hours in a workday or 40 hours in a
8 workweek. (Ibid.) TWC’s PMQ confirmed all other Specialists were also classified as exempt
9 through December 31, 2018. (Migliazzo Decl., Exh. 2, Field PMQ DT at pp. 19:6-9, 29:6-
10 30:8; Agreement, ¶ 2.2; Request for Judicial Notice [“RJN”], Exh. 1, Field Decl. ¶ 7)
11 While Plaintiff was employed by TWC, his home residence was located in Fresno,
12 California. (Torosian Decl. ¶ 5) TWC designated “Delano, California” as his designated office
13 for purposes of calculating mileage reimbursement. (Ibid.) Roundtrip between Fresno and
14 Delano is approximately 178.8 miles. (Ibid.) Under TWC’s policy, Plaintiff was not
15 reimbursed for mileage until after he drove at least 178.8 miles for the workday. (Ibid.) By
16 way of example, if his roundtrip to and from a school location and his home residence was
17 200 miles, he would only be reimbursed for 21.2 miles. (Ibid.) Defendant’s PMQ has
18 confirmed the mileage reimbursement policy is uniformly applied to Specialists, and they are
19 reimbursed when mileage exceeds their roundtrip threshold. (Migliazzo Decl., Exh. 2, Field
20 PMQ DT at pp. 34:2-14, 58:8-60:4.)2
21 On a typical workday, Plaintiff’s workday began at his home at 8 a.m. (Torosian Decl.
22 ¶ 6) At the beginning of his workday, he worked on schedules, prepared for sessions, filled
23 out administrative paperwork, lined out his dispatch for the day, performed reporting duties,
24 corresponded with management and students via email, etc. (Ibid.) From home, Plaintiff was
25 then dispatched to school locations located throughout the San Joaquin Valley, at the direction
26 of TWC. (Id. at ¶ 7; Migliazzo Decl., Exh. 2, Field PMQ DT p. 79:10-21) While he had some
27
2
28 As to reimbursement of other expenses, TWC had a policy of providing wi-fi, company-issued cell
phones, and if necessary, office supplies to Covered Employees. (Migliazzo Decl., Exh. 2, Field PMQ
DT pp. 81:9-85:12) So the focus of Plaintiff’s reimbursement claims is on mileage reimbursement.
MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR
APPROVAL OF SETTLEMENT UNDER THE CALIFORNIA PRIVATE ATTORNEYS
GENERAL ACT OF 2004 (“PAGA”)
2
1 autonomy in how he scheduled students and when to visit the campuses, he was still directed
2 by TWC to serve these locations. (Ibid.) This is consistent with TWC’s PMQ testimony,
3 which confirms work was performed at home by Specialist. (Migliazzo Decl. Exh. 2, Field
4 PMQ DT pp. 80:2-17, 150:24-151:5.)
5 During Plaintiff’s drive to the first school location, driving in between school
6 locations, and driving from his last school location of the day to his home residence, it was
7 common for Plaintiff to make work-related phone calls to TWC management and students.
8 (Torosian Decl. ¶ 10) TWC’s PMQ confirms it was common for Specialists to make work-
9 related phone calls during drive time. (Migliazzo Decl. Exh. 2, Field PMQ DT at p 116:4-17.)
10 Throughout Plaintiff’s day, he met with students at multiple college locations,
11 answered messages from students, and would not return home to his home residence until
12 about 6 p.m. (approximately 10 hours from the beginning of the day to the end). (Torosian
13 Decl. ¶ 12.) When Plaintiff arrived at his home residence, he still had messages from students.
14 (Id. at ¶ 13) He estimated he expended about two to four hours per day working from home.
15 (Ibid.) It was common for Plaintiff to return these messages if feasible after 6 p.m., and
16 sometimes late into the night. (Ibid.) Plaintiff’s typical workday exceeded eight hours per day.
17 Plaintiff estimates that he worked about 12 hours on a typical workday. (Ibid.) Similar to his
18 duties at the beginning of the workday, it was not uncommon for Plaintiff at the end of the day
19 to work on schedules, prepare for sessions, fill out administrative paperwork, line out his
20 dispatch for the day, perform reporting duties, correspond with management and students via
21 email, etc. (Ibid.; Migliazzo Decl. Exh. 2, Field PMQ DT pp. 80:18-81:8.) In addition to
22 working Monday through Friday, Plaintiff also worked for TWC on the weekends, answering
23 messages from students. (Torosian Decl. ¶ 14.)
24 TWC’s PMQ recognized Specialists worked in excess of eight hours a workday or 40
25 hours a workweek. (Migliazzo Decl. Exh. 2, Field PMQ DT pp. 28:9-18, 92:10-96:19
26 [January 4, 2017 employee retreat; work excess of eight hours a day]; pp. 96:25-97:24, 99:12-
27 101:23 [January 5, 2017 employee retreat, scheduled to work almost eight hours not including
28 travel to Fresno from Los Angeles]; pp. 101:24-104:8 [Paso Robles retreat included an eight-

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR
APPROVAL OF SETTLEMENT UNDER THE CALIFORNIA PRIVATE ATTORNEYS
GENERAL ACT OF 2004 (“PAGA”)
3
1 hour workday, not including the drive time]; pp. 118:7-119:9 [Plaintiff scheduled to work nine
2 hours, not including drive time]; pp. 137:15-139:13 [scheduled 12.5 hours of work for
3 specialists on April 8, 2017 college decision retreat, not including drive time]; pp. 142:15-
4 144:12 [TWC wanted to keep hours below 15 hours a day for summer camps if possible;
5 overtime was necessary].)
6 TWC did not require Plaintiff to keep track of his hours worked, nor is he aware
7 whether TWC kept track of Plaintiff’s hour worked. (Torosian Decl. ¶ 18.) The wage
8 statements do not include his hours worked or his hourly rate because he was classified as
9 “exempt.” (Ibid.) TWC’s PMQ also confirmed this policy. (Migliazzo Decl. Exh. 2, Field
10 PMQ DT at pp 26:12-27:21, 46:25-47:15)
11 Plaintiff was not a certificated teacher, nor was a teaching certification or advanced
12 degree required for his position. (Torosian ¶ 2, and Exh. 1.)
13 i) January 1, 2019 Change of Policy; Reclassification to Non-Exempt Status.
14 Effective December 31, 2018, TWC changed its policy by re-classifying Specialists as
15 “non-exempt” hourly employees, entitling Specialists to minimum wage and overtime for
16 hours worked in excess of eight hours in a workday or 40 hours in a workweek. (Agreement, ¶
17 2.2; Migliazzo Decl. Exh. 2, Field PMQ DT pp. 29:6-30:8, 116:4-17; RJN, Exh. 1, Field Decl.
18 ¶ 7.)) Covered Employees now receive overtime. (Id., Field PMQ DT at p. 50:2-14. )
19 In addition to re-classification, it is TWC’s policy that Specialists will be paid for
20 drive time that exceeds one hour of drive time to the first campus location, and for drive time
21 that exceeds one hour of drive time from the last customer location to the home residence;
22 they are paid for drive time in between campus locations. (PMQ Field DT at pp. 33:12-22,
23 36:18-25, 74:9-76:24.) The change of policy also emphasizes accurate recordkeeping to
24 ensure employees are paid for all hours worked (Ibid.)
25 III. SUMMARY OF PLAINTIFF’S CLAIMS AND TWC’S DEFENSES.
26 1) Plaintiff’s Claim of Misclassification / Defendant’s Position.
27 The employer bears the burden of proving the employee’s exemption. (Ramirez v.
28 Yosemite Water Co. (1999) 20 Cal.4th 785, 794)

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR
APPROVAL OF SETTLEMENT UNDER THE CALIFORNIA PRIVATE ATTORNEYS
GENERAL ACT OF 2004 (“PAGA”)
4
1 The gravamen of Plaintiff’s complaint is that he was misclassified. TWC relies on the
2 “professional exemption”, implying Mr. Torosian is a “teacher.” However, Plaintiff contends
3 the applicable wage order states that the “Professional Exemption” applies only if the
4 employee is “licensed or certified by the State of California and is primarily engaged in the
5 practice of one of the following recognized professions: law, medicine, dentistry, optometry,
6 architecture, engineering, teaching, or accounting.” (Cal. Code Regs., tit. 8, § 11040
7 (1)(A)(3)(a) [Wage Order 4]) “Teaching” is further defined by the wage order as “the
8 profession of teaching under a certificate from the Commission for Teacher Preparation and
9 Licensing or teaching in an accredited college or university.” (Cal. Code Regs., tit. 8, § 11040
10 (1)(A)(3)(a).) It is Plaintiff’s contention that the exemption fails because Covered Employees
11 are not “teachers”, nor are they required to have certifications to be qualified for a Specialist
12 position.
13 TWC also relies on the “learned professional” definition in the wage order on the basis
14 that Specialist, and specifically Plaintiff, have acquired several certifications and degrees over
15 a long course of study, which make him ideally suited for the job under a “learned
16 professional” exemption. (Cal. Code Regs., tit. 8, § 11040(a)(3)(b)). However, Plaintiff
17 contends the “learned” professional “requires” one to have an advanced degree in order to
18 perform his or her job. (DLSE Enforcement Manua (June 2002) Item 54.8) No advance
19 degree is required for the job, and the exemption argument fails. (Torosian Decl., Exh. 1.)
20 Because Plaintiff has a colorful argument for misclassification, he is an aggrieved
21 employee because he was not paid minimum wage or overtime for work in excess of eight (8)
22 hours in a workday or 40 hours in a workweek, even through he worked in excess of eight
23 hours a day or 40 hours in a workweek. His paystubs did not accurately record his hours
24 worked, state an hourly rate, or reflect any overtime or travel time, in violation of section 226.
25 In addition to misclassification through December 31, 2018, Plaintiff contends he is
26 entitled to both wages for hours worked and mileage reimbursement for drive time to the first
27 campus location of the day from his home residence. Similarly, he claims hours worked
28 during the drive time from the last campus location of the day to his home residence.

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR
APPROVAL OF SETTLEMENT UNDER THE CALIFORNIA PRIVATE ATTORNEYS
GENERAL ACT OF 2004 (“PAGA”)
5
1 California law, as expressed in the Labor Code, Wage Orders, DLSE opinion letters,
2 etc., provides that “drive time” on behalf of an employer is travel time, and should be
3 compensated as “hours worked.”3 “‘Hours worked’ means the time during which an employee
4 is subject to the control of an employer, and includes the time the employee is suffered or
5 permitted to work, whether or not required to do so.” (Bold added) (IWC Cal. Code Regs.,
6 tit. 8, § 11040(2)(K).)
7 Plaintiff’s contention is that the workday started from home. This is where he worked
8 on his schedules, prepared for his sessions, filled out administrative paperwork, lined out his
9 dispatch for the day, performed his reporting duties, corresponded with management via
10 email, etc. Plaintiff contends Specialist did not report to the Delano office, even though TWC
11 designated Delano is his “home office” for reporting to work and calculating reimbursable
12 expenses. Plaintiff also contends there was other substantial overtime and minimum wages
13 not paid as a result of the misclassification for work performed at home, including
14 administrative tasks before and after his drive time, work-related phone calls during this drive
15 time, and long meetings attending various retreats.
16 Plaintiff drove his personal vehicle. Plaintiff contends that driving to and from work
17 locations on behalf and under direction of the employer is not a “commute.” Plaintiff is
18 driving to specific locations at the direction of management. Plaintiff contends that driving to
19 and from varying locations to tutor students on behalf of TWC meets the “suffered and
20 permitted” standard. Labor Code § 2802 states: “(a) An employer shall indemnify his or her
21 employee for all necessary expenditures or losses incurred by the employee in direct
22 consequence of the discharge of his or her duties, or of his or her obedience to the directions
23 of the employer, even though unlawful, unless the employee, at the time of obeying the
24 directions, believed them to be unlawful.” Plaintiff submits that driving to different cities and
25 different locations at the direct mandate of the employer and should be treated as “hours
26 worked,” and are expenses incurred as a direct result of following an employer directive.
27

28
3
DIR Opinion letter, 1989.12.07; DLSE opinion letter 1994.02.16; DLSE opinion letter 2009.06.09.
MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR
APPROVAL OF SETTLEMENT UNDER THE CALIFORNIA PRIVATE ATTORNEYS
GENERAL ACT OF 2004 (“PAGA”)
6
1 As a defense to the “drive time” and reimbursable expenses, the gravamen of
2 Defendant’s defense is that Plaintiff and Covered Employees were highly compensated
3 employees. TWC argues Specialists have complete autonomy during their drive time, they are
4 not required to take specific routes to campus locations, and Specialists have complete
5 autonomy in how they carry out their job functions, including control over traveling. (See for
6 example, RJN, Exh. 1, Field Decl. ¶¶ 3-5) It takes the position that it is neither required to
7 reimburse Plaintiff for mileage or pay for hours worked because it is generally not responsible
8 to pay for the employees’ “commute” to and from work, nor did it exert the requisite control
9 during the employees’ commute to qualify as “hours worked”. (Hernandez v. Pacific Bell Tel.
10 Co. (2018) 29 Cal.App.5th 131, 145 [commute time not compensable])
11 In the end, TWC’s arguments create risk for the Plaintiff that need to be considered in
12 evaluating settlement on the issues of both misclassification and compensable drive time.
13 IV. PROCEDURAL BACKGROUND
14 A. Procedural History of the Action; Substantial Discovery.
15 On July 28, 2017, Plaintiff notified the LWDA of his allegations that Defendant
16 misclassified Plaintiff as exempt, failed to properly pay for all hours worked, among other
17 alleged labor code violations. (Migliazzo Decl. ¶ 3, Exh. 1) The LWDA did not provide any
18 notice that it intended to investigate Plaintiff’s allegations. (Ibid.)
19 On November 15, 2017, Plaintiff this action in Fresno County Superior Court, which
20 was assigned Case No. 17CECG003866 (“Action”). Plaintiff filed a First Amended Complaint
21 on December 1, 2017, which is the operative complaint. (RJN ¶ 1.) Plaintiff’s First Amended
22 Complaint alleges the following: (1) Failure to pay minimum wages (Labor Code §§ 558,
23 1194, 1194.2, 1197, 1197.1); (2) Failure to Pay Regular (and Overtime) Wages (Labor Code
24 §§ 510, 558, 1194); (3) Failure to provide accurate itemized wage statements (Labor Code §§
25 226, 226.3,226.6, 558, 1174, 1174.5, 1175); (4) Waiting Time Penalties (Labor Code §§ 201,
26 202, 203); (5) Failure to Reimburse for Travel and Other Expenses (Labor Code § 2802); (6)
27 Failure to Make Semimonthly Payments (Labor Code §§ 204, 210) (7) Accounting; (8)
28

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR
APPROVAL OF SETTLEMENT UNDER THE CALIFORNIA PRIVATE ATTORNEYS
GENERAL ACT OF 2004 (“PAGA”)
7
1 Constructive Termination in Violation of Public Policy; and (9) Receiving Stolen Property
2 (Penal Code § 496).
3 On February 13, 2019, the parties engaged in extensive mediation before experienced
4 mediator Laurie Quigley Saldana. (Migliazzo Decl. ¶ 9) Prior to mediation, Plaintiff and
5 Defendant engaged in both formal discovery and informal discovery that included the
6 exchange of time and pay records for Plaintiff, payroll records for Covered Employees, the
7 number of Covered Employees and their pay rates, and other policy documents. (Ibid.)
8 However, the mediation was unsuccessful. (Id. at ¶ 9.) On March 13, 2019, Plaintiff dismissed
9 the 7th, 8th, and 9th causes of action. (Id. at ¶ 10).
10 The parties have engaged in extensive law and motion practice and discovery,
11 including two Motions to Compel Arbitration, two Motions to Compel Discovery, exchange
12 of written interrogatories, three days of deposition of the named Plaintiff, a PMQ deposition,
13 Belaire-West opt out procedure, and informal discussions with Covered Employees.
14 (Migliazzo Decl. ¶¶ 7-24) This includes review of over 2,300 documents, which included
15 extensive review of pay records for 13 of the 16 Covered Employees. (Id. at ¶¶ 20-23.)
16 After 15 months of protracted litigation, discovery, and law and motion practice, the
17 parties conducted a second mediation with Mrs. Quigley on July 24, 2020. (Migliazzo Decl. ¶
18 26) The parties reached an informal resolution of both the PAGA claims and Plaintiff’s
19 individual claims. (Ibid.) Following settlement, the parties continued to meet and confer on
20 discussions to ensure the narrow scope of the release, the settlement details, and the notice
21 material. (Ibid.) On September 2, 2020, formal settlement agreement was executed. (Ibid.)
22 In addition to evidence on the merits, Defendants produced group data to allow the
23 parties to discuss and evaluate settlement intelligently. (Migliazzo Decl. ¶ 20; Newman Decl.
24 ¶ 6) The data also confirmed there was little variation in gross pay among Covered
25 Employees. (Id. at ¶ 49.) This data, along with the wage records of similarly situated
26 employees, and subsequent conversations with employees, gave Plaintiff’s counsel an
27 evidentiary basis to analyze a settlement. (See Migliazzo Declaration, generally.)
28

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR
APPROVAL OF SETTLEMENT UNDER THE CALIFORNIA PRIVATE ATTORNEYS
GENERAL ACT OF 2004 (“PAGA”)
8
1 V. LEGAL STANDARD FOR APPROVAL OF PAGA SETTLEMENT.
2 Labor Code § 2699(l)(2) states that “the superior court shall review and approve any
3 settlement of any civil action filed pursuant to this part.” Numerous published and unpublished
4 decisions from Federal District Courts in California follow the guidance provided by the LWDA
5 as to the appropriate standard of review. (See O'Connor v. Uber Techs., Inc., 201 F.Supp.3d 1110,
6 1133 (N.D. Cal. 2016).). In O’Connor, the LWDA indicated that when a PAGA claim is settled,
7 the relief provided should be genuine and meaningful, and consistent with the underlying purpose
8 of the statute to benefit the public. (See O'Connor, 201 F.Supp.3d at 1133). Relying on O’Connor,
9 courts will approve PAGA settlements that: “(1) meet the statutory requirements set forth by
10 PAGA, and (2) are fundamentally fair, reasonable, and adequate in view of PAGA's public policy
11 goals.” (Gutilla v. Aerotek, Inc. (E.D.Cal. Mar. 21, 2017, No. 1:15-cv-00191-DAD-BAM) 2017
12 U.S.Dist.LEXIS 41655, at *6-7.) In a PAGA case, the Court’s focus is not the monetary
13 amount aggrieved employees or the State are to receive, but instead, whether the total
14 settlement amount achieves the PAGA’s objective. The purpose of the PAGA is “to
15 incentivize private parties to recover civil penalties for the government that otherwise may not
16 have been assessed and collected by overburdened state enforcement agencies.” (Ochoa-
17 Hernandez v. Cjaders Foods, Inc., 2010 WL 1340777, at *4 (N.D. Cal. Apr. 2, 2010) (citing
18 Arias v. Superior Court (2009) 46 Cal.4th 969, 986).).
19 VI. SUMMARY OF THE SETTLEMENT
20 A. Value of the Settlement / Lawsuit.
21 A breakdown of the PAGA and individual settlement of $199,000 is as follows:
22 1. Attorneys’ Fees under PAGA: $30,000 (22.87% of PAGA settlement)
23 2. Litigation Costs under PAGA: Up to $639.25
24 3. Net Distribution after Fees and Costs under PAGA: $95,000
25 4. Net Distribution Amount to Covered Employees under PAGA: $23,750
26 5. Net Distribution Amount to LWDA under PAGA: $71,250
27 6. Payment to Jeff Torosian to settle individual claims: $40,000
28

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR
APPROVAL OF SETTLEMENT UNDER THE CALIFORNIA PRIVATE ATTORNEYS
GENERAL ACT OF 2004 (“PAGA”)
9
1 7. Payment for attorneys’ fees on individual claims: $30,0004
2 8. Payment for costs on individual claims: $3,360.75.
3 In addition to these payments, TWC has changed its policies effective December 31,
4 2018, and paid an additional $8,750 to six aggrieved employees to settle individual claims,
5 which also provides value under PAGA.
6 B. Payment of the PAGA Penalties.
7 The Net Distribution Amount, shall be calculated after deducting the Attorneys’ Fees
8 payment and Litigation Costs payment. (Agreement, ¶ 2.1) The Net Distribution Amount is
9 estimated to be at least $95,000, to be distributed as follows:
10 “Seventy-Five Percent (75%) of the Net Distribution Amount shall be
distributed to the LWDA and the other Twenty-Five Percent (25%) distributed
11
to the Covered Employees, and shall be distributed to Covered Employees
12 Adjusted Pro Rata, based on their respective number of compensable
workweeks during Settlement Period, according to Defendant’s records.
13 Covered Employees will receive a 1099-MISC (Box 3) for this sum paid as
Other PAGA Penalties. The estimated Net Distribution Amount is $71,250 to
14
the LWDA, and $23,750.00 to the Covered Employees.” (Agreement, ¶ 2.1(a).)
15
Any portion of the amount sought for fees and costs that are not awarded to Plaintiff’s
16
counsel will not revert back to Defendants, but will be part of the Net Distribution Amount to
17
be redistributed to Covered Employees on a pro rata basis a set forth here. (Agreement, ¶ 7.0.)
18
C. The Release of Claims Is Narrowly Tailored and Specifically Carves Out
19
Individual Claims of the Covered Employees.
20
“Released Claims” include:
21
“The Released Claims include any and all claims for civil penalties that could
22 have been assessed or collected by Plaintiff or the LWDA, a State of
23
California Executive Branch Agency under California Labor Code § 2698, et
seq. (“PAGA”), based on the factual allegations of the First Amended
24 Complaint, including alleged violations of Labor Code §§ 201, 202, 203, 204,
210, 226(a), 226.3, 510, 512, 558, 1174, 1174.5, 1197, 1197.1, 2699, 2802.
25 [sic] and IWC Wage Order No. 4-2001, arising from the alleged failure to pay
26 all hours worked or overtime wages, failure to pay minimum wages, failure to
timely pay wages during employment and upon termination, failure to provide
27 compliant wage statements, failure to maintain payroll records and/or satisfy
28
4
The attorneys’ fees between both settlements is $60,000, or 30.1% of the both settlements combined.
MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR
APPROVAL OF SETTLEMENT UNDER THE CALIFORNIA PRIVATE ATTORNEYS
GENERAL ACT OF 2004 (“PAGA”)
10
1 recordkeeping requirements, failure to fully reimburse for all necessary
expenditures or losses incurred in direct consequence of the discharge of
2
duties (including mileage reimbursement and office supplies), and civil
3 penalties. Except as to the Plaintiff who will be entering in to an individual
settlement agreement as to his claims, the Released Claims do not include
4 any underlying individual claims or causes of action the Covered
Employees may have, and relief they may seek, against Released Parties
5
with respect to violations of the California Labor Code apart from
6 PAGA. The Release only includes claims under PAGA, arising out of the
facts, circumstances, and primary rights at issue in the Action. It does not
7 include the individual claims of Covered Employees.” (Bold added.)
8
(Agreement, ¶ 3.1)

9
The release is limited to PAGA-only claims, carves out employees’ individual claims,
10
and omits any reference to a release under Civil Code section 1542. It its limited to same
11
primary rights brought forward in the First Amended Complaint. Furthermore, the scope of
12
the release is limited to PAGA-only remedies in accordance with Arias v. Superior Court
13
(2009) 46 Cal.4th 969, 986. (Agreement, ¶ 3.2)
14
D. Notice of the Settlement Is Being Provided to LWDA and Covered Employees.
15
With the settlement check, TWC will send a cover letter to the Covered Employees
16
with their penalty payments explaining why they are receiving checks. (Exhibit 1 to
17
Stipulation to Proposed Notice). This includes an explanation of the release, and notice that
18
this does not include a release of individual claims. (Ibid.) Plaintiff will file this motion with
19
the LWDA, including the Settlement Agreement. (Migliazzo Decl. ¶ 88.)
20
E. Plaintiff’s Individual Settlement Is Justified.
21
Plaintiff has been a catalyst for a change in policy, settlement payments to employees
22
in the amount of $8,750, and significant proceeds paid to both the LWDA and Covered
23
Employees. (Migliazzo Decl. ¶¶ 56-57.) Plaintiff’s individual settlement includes a release in
24
accordance with Civil Code section 1542, and is the product of an arm’s length negotiation.
25
(Id., at ¶ 60.) Plaintiff’s potential individual claims are valued in excess of $40,000, plus
26
attorneys’ fees, so $40,000 is a reasonable compromise of his individual claims. (Torosian
27
Decl. ¶ 23.) Plaintiff is being treated the same as others for purposes of receiving PAGA
28
penalties. (Migliazzo Decl. ¶ 61.)

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR

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Motion-Secondary: Jeffery Torosian vs. The Wonderful Company, L.L.C.

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