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SUPERIOR COURT OF CALIFORNIA
COUNTY OF SANTA CLARA
10
11 JESSECA BIEGER, Case No.: 18CV325624
12 Plaintiff, ORDER CONCERNING
13 PLAINTIFFS’ MOTION FOR
vs. PRELIMINARY APPROVAL OF
14 CLASS/PAGA SETTLEMENT
HOUZZ, INC., et al.,
15
16 Defendants.
17
18 This is a putative class and Private Attorneys General Act (“PAGA”) action on behalf of
19 employees of Defendant Houzz, Inc., alleging wage and hour violations and unequal pay based
20 on gender. Plaintiffs now move for preliminary approval of a settlement of this action and
21 related claims asserted by another employee in arbitration, which is unopposed. As discussed
22 below, the Court GRANTS Plaintiffs’ motion.
25 I BACKGROUND
24 A. Factual
25 As alleged in the operative complaint, Houzz is based in Palo Alto and operates an online
26 platform for home remodeling and design services. (First Amended Complaint (“FAC”), f§ 5,
27 7.) Plaintiff Jessica Bieger worked for Houzz in several nonexempt positions from September
28 2015 until November 2017. (/d., 4.) She worked primarily out of Defendant’s offices in
Orange County in positions including account coordinator, customer service coordinator, support
specialist, and sales representative. (/d., {| 8.)
Plaintiff alleges that Defendant regularly caused her and other nonexempt employees to
miss, delay, or shorten meal periods to attend mandatory meetings or keep up with a heavy work
load, but still required them to record a 30-minute unpaid meal period in their time records.
(FAC, § 10-12.) As a result, Houzz failed to pay employees minimum and overtime wages and
required meal period premiums. (/bid.) Similarly, Defendant regularly caused employees to
miss or have shortened, interrupted, untimely, or on-duty rest breaks and failed to pay rest period|
premiums. (/d., § 13.) Moreover, when Houzz offered Plaintiff the position of support
10 specialist, she was promised in writing “an hourly rate of $23.08 per hour ($50,000 when
11 annualized), less all applicable withholdings and deductions.” (/d., § 14.) After working in the
12 position, Plaintiff learned that the $23.08 hourly rate only amounted to $48,006.40 in annual
13 compensation, resulting in a secret underpayment that also impacted other employees. (Jbid.)
14 As a result of these other violations, Houzz failed to pay all wages earned at termination and
15 failed to provide accurate wage statements. (/d., {J 15, 16.) Some of its wage statements also
16 failed to include the inclusive dates of the pay period at issue, creating an independent violation.
17 (id., 4 16.) And when Plaintiff requested a copy of her personnel records, Defendant untimely
18 produced parts of her personnel file more than 40 days after receiving her request. (/d., {| 18.)
19 In addition to these wage and hour violations, Ms. Bieger alleges that she and other
20 female employees were paid at a lower hourly rate than male counterparts in the same or
21 substantially similar positions. (FAC, 17.) She complained of unequal pay based on her
22 gender during her employment, but Defendant never corrected the issue. (/bid.)
25 Based on these allegations, Ms. Bieger brings individual and putative class claims for
24 (1) failure to pay minimum wages for all hours worked; (2) failure to pay overtime wages for all
25 overtime hours worked; (3) failure to provide meal periods or pay premium wages in lieu
26 thereof; (4) failure to provide rest breaks or pay premium wages in lieu thereof; (5) secret
27 underpayment of contract wage; (6) failure to provide accurate wage statements; (7) failure to
28 pay all wages owed upon termination; (8) unequal pay based on gender; and (9) violation of the
Unfair Competition Law (“UCL”), as well as (10) a representative claim for PAGA civil
penalties.
B Procedural
Following informal discovery, negotiations, and a case management conference,
Defendant and Ms. Bieger stipulated to proceed in arbitration and to stay (but not dismiss) this
action. In arbitration, Plaintiff sought a clause construction award to proceed as a class
arbitration, but the arbitrator ruled that arbitration could proceed on an individual and
tepresentative PAGA basis only. In addition to the ten claims asserted in the FAC, Plaintiff
pursued claims in arbitration for failure to properly and timely calculate and pay commission
10 wages; failure to reimburse necessary business expenses; and failure to timely provide copies of
11 wage statements, signed instruments, and personnel records. She submitted a first amended
12 PAGA notice in October 2019, addressing Houzz’s alleged failure to indemnify business
13 expenses associated with employees’ use of their personal cellular phones, and a second
14 amended PAGA notice in December 2019, addressing Defendant’s alleged failure to timely pay
15 commission wages.
16 Cc. The Ugalde Arbitration
17 In January 2020, after submitting a PAGA notice with similar allegations as Ms.
18 Bieger’s, Cesar Ugalde (who is represented by the same counsel as Ms. Bieger) filed an
19 individual and class arbitration demand against Defendant and stated his intention to add a
20 representative PAGA claim. Other than the absence of an “equal pay based on gender” claim
21 and several claims related to an exempt position (which are not included in the parties’
22 settlement), Mr. Ugalde’s claims were similar to Ms. Bieger’s, and included a claim for overtime
25 violations due to Houzz’s failure to include nondiscretionary bonus and commission wages in
24 employees’ rates of pay. When Mr. Ugalde and Defendant agreed to mediate with Ms. Bieger,
25 the arbitrator postponed briefing on the issue of class arbitration until after the mediation.
26 D. This Motion
27 The parties have reached a settlement of this action and the similar claims asserted by Mr]
28 Ugalde. Ms. Bieger and Mr. Ugalde (“Plaintiffs”) now move for an order approving the filing of]
a proposed Second Amended Complaint (“SAC”), which Mr. Ugalde as a plaintiff and adds
certain claims pursued by Plaintiffs in arbitration to those previously asserted here;' preliminarily
approving the settlement of the class and PAGA claims; provisionally certifying the settlement
class; approving the form and method for providing notice to the class; and scheduling a final
fairness hearing.
II. LEGAL STANDARDS FOR SETTLEMENT APPROVAL
A. Class Action
Generally, “questions whether a [class action] settlement was fair and reasonable,
whether notice to the class was adequate, whether certification of the class was proper, and
10 whether the attorney fee award was proper are matters addressed to the trial court’s broad
11 discretion.” (Wershba v. Apple Computer, Inc. (2001) 91 Cal.App.4th 224, 234-235 (Wershba),
12 disapproved of on other grounds by Hernandez v. Restoration Hardware, Inc. (2018) 4 Cal.5th
13 260.)
14 In determining whether a class settlement is fair, adequate and reasonable, the
15 trial court should consider relevant factors, such as the strength of plaintiffs’ case,
16 the risk, expense, complexity and likely duration of further litigation, the risk of
17 maintaining class action status through trial, the amount offered in settlement, the
18 extent of discovery completed and the stage of the proceedings, the experience
19 and views of counsel, the presence of a governmental participant, and the reaction
20 of the class members to the proposed settlement.
21 (Wershba, supra, 91 Cal.App.4th at pp. 244-245, internal citations and quotations omitted.)
22 In general, the most important factor is the strength of the plaintiffs’ case on the merits,
25 balanced against the amount offered in settlement. (See Kullar v. Foot Locker Retail, Inc. (2008)
24 168 Cal.App.4th 116, 130 (Kud/ar).) But the trial court is free to engage in a balancing and
25
26
' Specifically, the SAC adds allegations that Defendant failed to pay overtime wages because it
27 did not include nondiscretionary bonus and commission wages in employees’ rates of pay; failed
to reimburse employees for business expenses associated with use of their personal cell phones
28
to perform work; failed to timely pay and properly document commission wages; and failed to
timely provide copies of wage statements and signed instruments as well as personnel records.
4
weighing of factors depending on the circumstances of each case. (Wershba, supra, 91
Cal.App.4th at p. 245.) The trial court must examine the “proposed settlement agreement to the
extent necessary to reach a reasoned judgment that the agreement is not the product of fraud or
overreaching by, or collusion between, the negotiating parties, and that the settlement, taken as a
whole, is fair, reasonable and adequate to all concerned.” (Jbid., citation and internal quotation
marks omitted.)
The burden is on the proponent of the settlement to show that it is fair and
teasonable. However “a presumption of fairness exists where: (1) the settlement
is reached through arm’s-length bargaining; (2) investigation and discovery are
10 sufficient to allow counsel and the court to act intelligently; (3) counsel is
11 experienced in similar litigation; and (4) the percentage of objectors is small.”
12 (Wershba, supra, 91 Cal.App.4th at p. 245, citation omitted.) The presumption does not permit
13 the Court to “give rubber-stamp approval” to a settlement; in all cases, it must “independently
14 and objectively analyze the evidence and circumstances before it in order to determine whether
15 the settlement is in the best interests of those whose claims will be extinguished,” based on a
16 sufficiently developed factual record. (Kullar, supra, 168 Cal.App.4th at p. 130.)
17 B. PAGA
18 Labor Code section 2699, subdivision (1) provides that “[t]he superior court shall review
19 and approve any penalties sought as part of a proposed settlement agreement pursuant to”
20 PAGA. The court’s review “ensur[es] that any negotiated resolution is fair to those affected.”
21 (Williams v. Superior Court (2017) 3 Cal.Sth 531, 549.) Seventy-five percent of any penalties
22 recovered under PAGA go to the Labor and Workforce Development Agency (“LWDA”),
25 leaving the remaining twenty-five percent for the aggrieved employees. (Iskanian v. CLS
24 Transportation Los Angeles, LLC (2014) 59 Cal.4th 348, 380.)
25 “[TW]hen a PAGA claim is settled, the relief provided ... [should] be genuine and
26 meaningful, consistent with the underlying purpose of the statute to benefit the public ....”
27 (Villalobos v. Calandri Sonrise Farm LP (C.D. Cal., July 22, 2015, No. CV122615PSGJEMX)
28 2015 WL 12732709, at *13.) The settlement must be reasonable in light of the potential verdict
value. (See O’Connor v. Uber Technologies, Inc. (N.D. Cal. 2016) 201 F.Supp.3d 1110, 1135
[rejecting settlement of less than one percent of the potential verdict].) But a permissible
settlement may be substantially discounted, given that courts often exercise their discretion to
award PAGA penalties below the statutory maximum even where a claim succeeds at trial. (See
Viceral v. Mistras Group, Inc. (N.D. Cal., Oct. 11, 2016, No. 15-CV-02198-EMC) 2016 WL
5907869, at *8-9.)
il. SETTLEMENT PROCESS
According to Plaintiffs’ counsel, the arbitration of Ms. Bieger’s claims involved several
hearings, dozens of discovery requests, and the production of over 10,000 pages of employment
10 records, including Defendant’s written employment policies and an arbitrator-approved sampling}
11 of 74 employees’ wage statements, timekeeping and payment records, commission agreements,
12 offer letters, and similar records. Ms. Bieger sat for an all-day deposition on March 12, 2020.
13 As the COVID-19 pandemic developed, the parties agreed to participate in an all-day mediation
14 on July 8, 2020 with Hon. Leo Papas (Ret.) before completing discovery and motion practice.
15 The mediation did not result in a settlement, but the mediator made a proposal to resolve
16 the action on a class basis. On August 3, 2020, after learning that this Court (Judge Walsh) had
17 preliminarily approved the settlement in Merritt v. Houzz Inc., et al. (Santa Clara County, No.
18 19CV341181) (Merritt) and tentatively dismissed the class allegations in Geenen v. Houzz, Inc.,
19 et al. (Santa Clara County, No. 19CV352332), the parties accepted the mediator’s proposal and
20 reached a settlement in principle, which was ultimately formalized in the Joint Stipulation of
21 Class Action Settlement now before the Court.
22 Iv. SETTLEMENT PROVISIONS
25 The non-reversionary gross settlement amount is $585,000. Attorney fees of up to
24 $195,000 (one-third of the gross settlement), litigation costs not to exceed $10,000, and
25 administration costs of up to $17,000 will be paid from the gross settlement. $16,000 will be
26 allocated to PAGA penalties, 75 percent of which will be paid to the LWDA. Ms. Bieger will
27 seek an enhancement award of $10,000, and Mr. Ugalde will seek $5,000.
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The net settlement, approximately $338,000 by the Court’s calculation, will be
distributed to individual class members proportionally based on their weeks worked during the
class period. The average settlement payment will be approximately $203 to each of the 1,654
class members, Class members will not be required to submit a claim to receive their payments.
Settlement awards will be allocated 50 percent to wages and 50 percent to interest and penalties
for tax purposes, and the employer’s share of any payroll taxes will be paid separately. Funds
associated with checks uncashed after 180 days will be paid to the Employee Rights Advocacy
Institute for Law and Policy.
Class members who do not opt out of the settlement will release “the claims alleged in
10 Plaintiffs’ Second Amended Class Action Complaint ... arising during the Class Period,” as well
11 as “those claims that could have been brought by Plaintiffs in the Second Amended Class Action
12 Complaint arising from the factual allegations contained therein.”
13 Plaintiffs’ counsel declares that this action also caused Houzz to implement a new system
14 in December of 2018, which calculates all working hours to the minute, pays nonexempt
15 employees for all recorded hours worked, and automatically pays premium wages for any
16 untimely, shortened, or missed meal periods, with or without proof of a violation. Discovery
17 confirmed a decline in potential violations after this system was implemented.
18 Vv. FAIRNESS OF SETTLEMENT
19 As discussed in detail in the Declaration of Jamin S. Soderstrom supporting Plaintiffs’
20 motion, Plaintiffs valued the unpaid wage claim at $173,470 for the putative class and the meal
21 and rest break claims at $138,776, estimating a relatively limited number of violations and a ten
22 percent chance of success on a class basis. Because their discovery sampling did not show that
25 other employees received offer letters with similar discrepancies to Ms. Bieger’s, Plaintiffs did
24 not attribute any value to this claim. Discovery also did not show a common practice of paying
25 male employees more than female employees for the same work, so Plaintiffs similarly attributed|
26 no value to this claim, and it appears that they assigned little to no value to their claims arising
27 from Defendant’s recordkeeping considering evidence that Defendant gave signed copies of
28 commission plans and obtained signed receipts, but simply did not place them in employees’
personnel files. Plaintiffs valued the wage statement claims at $248,100 and the waiting time
penalties at $27,360. They estimated that the claim for failure to reimburse business expenses
was worth only $6,929, assuming a ten percent chance of success on a class basis. These
estimates also reflect limitations on the class period for certain violations in light of the Merritt
settlement. Finally, Plaintiffs estimated that up to $2,527,957 in PAGA penalties could
realistically be recovered, including $115,650 associated with commission violations, assuming
either a five or a ten percent likelihood of a full recovery.
Plaintiffs submit that the settlement is fair and reasonable to the class, particularly
considering the Merritt settlement and the presence of an arbitration agreement with a class
10 action waiver that was recently enforced by this Court in a related action. The Court agrees, and
11 finds that the class settlement warrants preliminary approval. In addition, the PAGA allocation
12 provided by the settlement is genuine, meaningful, and fair to those impacted.
13 The Court retains an independent right and responsibility to review the requested attorney|
14 fees and award only so much as it determines to be reasonable. (See Garabedian v. Los Angeles
15 Cellular Telephone Co. (2004) 118 Cal.App.4th 123, 127-128.) While 1/3 of the common fund
16 for attorney fees is generally considered reasonable, counsel shall submit lodestar information
17 prior to the final approval hearing in this matter so the Court can compare the lodestar
18 information with the requested fees. (See Laffitte v. Robert Half Intern. Inc. (2016) 1 Cal.5th
19 480, 504 [trial courts have discretion to double-check the reasonableness of a percentage fee
20 through a lodestar calculation].)
21 VI. PROPOSED SETTLEMENT CLASS
22 Plaintiffs request that the following settlement class be provisionally certified:
25 all nonexempt workers employed by Defendant in California at any time from
24 January 4, 2016 through October 1, 2020.
25 A. Legal Standard for Certifying a Class for Settlement Purposes
26 Rule 3.769(d) of the California Rules of Court states that “[t]he court may make an order
27 approving or denying certification of a provisional settlement class after [a] preliminary
28 settlement hearing.” California Code of Civil Procedure Section 382 authorizes certification of a|
class “when the question is one of a common or general interest, of many persons, or when the
parties are numerous, and it is impracticable to bring them all before the court ....”
Section 382 requires the plaintiff to demonstrate by a preponderance of the evidence:
(1) an ascertainable class and (2) a well-defined community of interest among the class
members. (Sav-On Drug Stores, Inc. v. Superior Court (2004) 34 Cal.4th 319, 326, 332 (Sav-On
Drug Stores).) “Other relevant considerations include the probability that each class member
will come forward ultimately to prove his or her separate claim to a portion of the total recovery
and whether the class approach would actually serve to deter and redress alleged wrongdoing.”
(Linder v. Thrifty Oil Co. (2000) 23 Cal.4th 429, 435.) The plaintiff has the burden of
10 establishing that class treatment will yield “substantial benefits” to both “the litigants and to the
11 court.” (Blue Chip Stamps v. Superior Court (1976) 18 Cal.3d 381, 385.)
12 In the settlement context, “the court’s evaluation of the certification issues is somewhat
13 different from its consideration of certification issues when the class action has not yet settled.”
14 (Luckey v. Superior Court (2014) 228 Cal.App.4th 81, 93.) As no trial is anticipated in the
15 settlement-only context, the case management issues inherent in the ascertainable class
16 determination need not be confronted, and the court’s review is more lenient in this respect. (/d.
17 at pp. 93-94.) But considerations designed to protect absentees by blocking unwarranted or
18 overbroad class definitions require heightened scrutiny in the settlement-only class context, since}
19 the court will lack the usual opportunity to adjust the class as proceedings unfold. (/d. at p. 94.)
20 B. Ascertainable Class
21 A class is ascertainable “when it is defined in terms of objective characteristics and
22 common transactional facts that make the ultimate identification of class members possible when|
25 that identification becomes necessary.” (Noel v. Thrifty Payless, Inc. (2019) 7 Cal.5th 955, 980
24 (Noel).) A class definition satisfying these requirements
25 puts members of the class on notice that their rights may be adjudicated in the
26 proceeding, so they must decide whether to intervene, opt out, or do nothing and
27 live with the consequences. This kind of class definition also advances due
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process by supplying a concrete basis for determining who will and will not be
bound by (or benefit from) any judgment.
(Noel, supra, 7 Cal.5th at p. 980, citation omitted.)
“As a tule, a representative plaintiff in a class action need not introduce evidence
establishing how notice of the action will be communicated to individual class members in order
to show an ascertainable class.” (Noel, supra, 7 Cal.Sth at p. 984.) Still, it has long been held
that “[c]lass members are ‘ascertainable’ where they may be readily identified ... by reference to
official records.” (Rose v. City of Hayward (1981) 126 Cal. App. 3d 926, 932, disapproved of on|
another ground by Noel, supra, 7 Cal.5th 955; see also Cohen v. DIRECTV, Inc. (2009) 178
10 Cal.App.4th 966, 975-976 [“The defined class of all HD Package subscribers is precise, with
11 objective characteristics and transactional parameters, and can be determined by DIRECTV’s
12 own account records. No more is needed.”
].)
13 Here, the estimated 1,654 class members are readily identifiable based on Defendant’s
14 records, and the settlement class is appropriately defined based on objective characteristics. The
15 Court finds the settlement class is numerous and ascertainable.
16 Cc. Community of Interest
17 The “community-of-interest” requirement encompasses three factors: (1) predominant
18 questions of law or fact, (2) class representatives with claims or defenses typical of the class, and|
19 (3) class representatives who can adequately represent the class. (Sav-On Drug Stores, supra, 34
20 Cal.4th at pp. 326, 332.)
21 For the first community of interest factor, “[i]n order to determine whether common
22 questions of fact predominate the trial court must examine the issues framed by the pleadings
25 and the law applicable to the causes of action alleged.” (Hicks v. Kaufman & Broad Home Corp.
24 (2001) 89 Cal.App.4th 908, 916 (Hicks).) The court must also examine evidence of any conflict
25 of interest among the proposed class members. (See J.P. Morgan & Co., Inc. v. Superior Court
26 (2003) 113 Cal.App.4th 195, 215.) The ultimate question is whether the issues which may be
27 jointly tried, when compared with those requiring separate adjudication, are so numerous or
28 substantial that the maintenance of a class action would be good for the judicial process and to
10
the litigants. (Lockheed Martin Corp. v. Superior Court (2003) 29 Cal.4th 1096, 1104-1105
(Lockheed Martin).) “As a general rule if the defendant’s liability can be determined by facts
common to all members of the class, a class will be certified even if the members must
individually prove their damages.” (Hicks, supra, 89 Cal.App.4th at p. 916.)
Here, common legal and factual issues predominate. Plaintiffs’ claims all arise from
Defendant’s wage and hour practices applied to the similarly-situated class members.
As to the second factor,
The typicality requirement is meant to ensure that the class representative is able
to adequately represent the class and focus on common issues. It is only when a
10 defense unique to the class representative will be a major focus of the litigation,
11 or when the class representative’s interests are antagonistic to or in conflict with
12 the objectives of those she purports to represent that denial of class certification is
13 appropriate. But even then, the court should determine if it would be feasible to
14 divide the class into subclasses to eliminate the conflict and allow the class action
15 to be maintained.
16 (Medrazo v. Honda of North Hollywood (2008) 166 Cal. App. 4th 89, 99, internal citations,
17 brackets, and quotation marks omitted.)
18 Like other members of the class, Plaintiffs were employed by Defendant as hourly
19 employees and allege that they experienced the violations at issue. The anticipated defenses are
20 not unique to Plaintiffs, and there is no indication that Plaintiffs’ interests are otherwise in
21 conflict with those of the class.
22 Finally, adequacy of representation “depends on whether the plaintiffs attorney is
25 qualified to conduct the proposed litigation and the plaintiff's interests are not antagonistic to the
24 interests of the class.” (McGhee v. Bank of America (1976) 60 Cal.App.3d 442, 450.) The class
25 representative does not necessarily have to incur all of the damages suffered by each different
26 class member in order to provide adequate representation to the class. (Wershba, supra, 91
27 Cal.App.4th at p. 238.) “Differences in individual class members’ proof of damages [are] not
28 fatal to class certification. Only a conflict that goes to the very subject matter of the litigation
11
will defeat a party’s claim of representative status.” (/bid., internal citations and quotation marks
omitted.)
Plaintiffs have the same interest in maintaining this action as any class member would
have. Further, they have hired experienced counsel. Plaintiffs have sufficiently demonstrated
adequacy of representation.
D. Substantial Benefits of Class Certification
“[A] class action should not be certified unless substantial benefits accrue both to
litigants and the courts. .. .” (Basurco v. 21st Century Ins. (2003) 108 Cal.App.4th 110, 120,
internal quotation marks omitted.) The question is whether a class action would be superior to
10 individual lawsuits. (Jbid.) “Thus, even if questions of law or fact predominate, the lack of
11 superiority provides an alternative ground to deny class certification.” (/bid.) Generally, “a
12 class action is proper where it provides small claimants with a method of obtaining redress and
13 when numerous parties suffer injury of insufficient size to warrant individual action.” (/d. at pp.
14 120-121, internal quotation marks omitted.)
15 Here, there are an estimated 1,654 members of the proposed class. It would be inefficient
16 for the Court to hear and decide the same issues separately and repeatedly for each class
17 member. Further, it would be cost prohibitive for each class member to file suit individually, as
18 each member would have the potential for little to no monetary recovery. It is clear that a class
19 action provides substantial benefits to both the litigants and the Court in this case.
20 VIL. NOTICE
21 The content of a class notice is subject to court approval. (Cal. Rules of Court, rule
22 3.769(f).) “The notice must contain an explanation of the proposed settlement and procedures
25 for class members to follow in filing written objections to it and in arranging to appear at the
24 settlement hearing and state any objections to the proposed settlement.” (/bid.) In determining
25 the manner of the notice, the court must consider: “(1) The interests of the class; (2) The type of
26 relief requested; (3) The stake of the individual class members; (4) The cost of notifying class
27 members; (5) The resources of the parties; (6) The possible prejudice to class members who do
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not receive notice; and (7) The res judicata effect on class members.” (Cal. Rules of Court, rule
3.766(e).)
Here, the notice describes the lawsuit, explains the settlement, and instructs class
members that they may opt out of the settlement or object. The gross settlement amount and
estimated deductions are provided. Class members’ estimated payments are reflected on an
“Employment Information Sheet” to be enclosed with the notice, and class members are
informed of their qualifying workweeks as reflected in Defendant’s records and instructed how
to dispute this information. Class members are given 45 days to request exclusion from the
class, submit a written objection to the settlement, or dispute their workweek information. The
10 notice instructs class members that they may appear at the final fairness hearing to make an oral
11 objection without submitting a written objection, and explains how they can appear remotely
12 through CourtCall by contacting class counsel.
13 The form of notice is generally adequate and is approved, with the following
14 modifications to the “Employment Information Sheet”: first, the estimated settlement payment
15 must be displayed in bold within a box set off from the rest of the text and second, the note
16 regarding the forwarding of uncashed checks to the State of California, Office of the State
17 Controller, Unclaimed Property Division must be corrected to reflect that funds associated with
18 uncashed checks will be remitted to the Employee Rights Advocacy Institute for Law and Policy]
19 Turning to the notice procedure, the parties have selected Simpluris, Inc. as the settlement]
20 administrator. The administrator will mail the notice packet within 28 calendar days of
21 preliminary approval. Any notice packets returned as undeliverable will be re-mailed to any
22 forwarding address provided, and class members who receive a re-mailed notice will have at
25 least 14 days to respond.
24 These notice procedures are appropriate and are approved, with the modifications that the!
25 administrator shall update class members’ addresses using the National Change of Address
26 Database prior to mailing the notices and shall make reasonable efforts to locate an updated
27 mailing address for any notice packet that is returned without a forwarding address.
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VII. CONCLUSION AND ORDER
Subject to the modifications to the class notice and notice procure directed above, the
Court GRANTS Plaintiffs’ motion for preliminary approval. The final approval hearing shall
take place on June 10, 2021 at 1:30 p.m. in Dept. 1. The following class is preliminarily
certified for settlement purposes:
all nonexempt workers employed by Defendant in California at any time from
January 4, 2016 through October 1, 2020.
Before final approval, Plaintiffs shall lodge any individual settlement agreements they
may have executed with Defendants in connection with their employment for the Court’s review.
10 IT IS SO ORDERED.
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Date:
LU.
The Honorable Sunil R. Kulkarni
13 Judge of the Superior Court
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SUPERIOR COURT OF CALIFORNIA COUNTY OF SANTA CLARA 10 11 JESSECA BIEGER, Case No.: 18CV325624 12 Plaintiff, ORDER CONCERNING 13 PLAINTIFFS’ MOTION FOR vs. PRELIMINARY APPROVAL OF 14 CLASS/PAGA SETTLEMENT HOUZZ, INC., et al., 15 16 Defendants. 17 18 This is a putative class and Private Attorneys General Act (“PAGA”) action on behalf of 19 employees of Defendant Houzz, Inc., alleging wage and hour violations and unequal pay based 20 on gender. Plaintiffs now move for preliminary approval of a settlement of this action and 21 related claims asserted by another employee in arbitration, which is unopposed. As discussed 22 below, the Court GRANTS Plaintiffs’ motion. 25 I BACKGROUND 24 A. Factual 25 As alleged in the operative complaint, Houzz is based in Palo Alto and operates an online 26 platform for home remodeling and design services. (First Amended Complaint (“FAC”), f§ 5, 27 7.) Plaintiff Jessica Bieger worked for Houzz in several nonexempt positions from September 28 2015 until November 2017. (/d., 4.) She worked primarily out of Defendant’s offices in Orange County in positions including account coordinator, customer service coordinator, support specialist, and sales representative. (/d., {| 8.) Plaintiff alleges that Defendant regularly caused her and other nonexempt employees to miss, delay, or shorten meal periods to attend mandatory meetings or keep up with a heavy work load, but still required them to record a 30-minute unpaid meal period in their time records. (FAC, § 10-12.) As a result, Houzz failed to pay employees minimum and overtime wages and required meal period premiums. (/bid.) Similarly, Defendant regularly caused employees to miss or have shortened, interrupted, untimely, or on-duty rest breaks and failed to pay rest period| premiums. (/d., § 13.) Moreover, when Houzz offered Plaintiff the position of support 10 specialist, she was promised in writing “an hourly rate of $23.08 per hour ($50,000 when 11 annualized), less all applicable withholdings and deductions.” (/d., § 14.) After working in the 12 position, Plaintiff learned that the $23.08 hourly rate only amounted to $48,006.40 in annual 13 compensation, resulting in a secret underpayment that also impacted other employees. (Jbid.) 14 As a result of these other violations, Houzz failed to pay all wages earned at termination and 15 failed to provide accurate wage statements. (/d., {J 15, 16.) Some of its wage statements also 16 failed to include the inclusive dates of the pay period at issue, creating an independent violation. 17 (id., 4 16.) And when Plaintiff requested a copy of her personnel records, Defendant untimely 18 produced parts of her personnel file more than 40 days after receiving her request. (/d., {| 18.) 19 In addition to these wage and hour violations, Ms. Bieger alleges that she and other 20 female employees were paid at a lower hourly rate than male counterparts in the same or 21 substantially similar positions. (FAC, 17.) She complained of unequal pay based on her 22 gender during her employment, but Defendant never corrected the issue. (/bid.) 25 Based on these allegations, Ms. Bieger brings individual and putative class claims for 24 (1) failure to pay minimum wages for all hours worked; (2) failure to pay overtime wages for all 25 overtime hours worked; (3) failure to provide meal periods or pay premium wages in lieu 26 thereof; (4) failure to provide rest breaks or pay premium wages in lieu thereof; (5) secret 27 underpayment of contract wage; (6) failure to provide accurate wage statements; (7) failure to 28 pay all wages owed upon termination; (8) unequal pay based on gender; and (9) violation of the Unfair Competition Law (“UCL”), as well as (10) a representative claim for PAGA civil penalties. B Procedural Following informal discovery, negotiations, and a case management conference, Defendant and Ms. Bieger stipulated to proceed in arbitration and to stay (but not dismiss) this action. In arbitration, Plaintiff sought a clause construction award to proceed as a class arbitration, but the arbitrator ruled that arbitration could proceed on an individual and tepresentative PAGA basis only. In addition to the ten claims asserted in the FAC, Plaintiff pursued claims in arbitration for failure to properly and timely calculate and pay commission 10 wages; failure to reimburse necessary business expenses; and failure to timely provide copies of 11 wage statements, signed instruments, and personnel records. She submitted a first amended 12 PAGA notice in October 2019, addressing Houzz’s alleged failure to indemnify business 13 expenses associated with employees’ use of their personal cellular phones, and a second 14 amended PAGA notice in December 2019, addressing Defendant’s alleged failure to timely pay 15 commission wages. 16 Cc. The Ugalde Arbitration 17 In January 2020, after submitting a PAGA notice with similar allegations as Ms. 18 Bieger’s, Cesar Ugalde (who is represented by the same counsel as Ms. Bieger) filed an 19 individual and class arbitration demand against Defendant and stated his intention to add a 20 representative PAGA claim. Other than the absence of an “equal pay based on gender” claim 21 and several claims related to an exempt position (which are not included in the parties’ 22 settlement), Mr. Ugalde’s claims were similar to Ms. Bieger’s, and included a claim for overtime 25 violations due to Houzz’s failure to include nondiscretionary bonus and commission wages in 24 employees’ rates of pay. When Mr. Ugalde and Defendant agreed to mediate with Ms. Bieger, 25 the arbitrator postponed briefing on the issue of class arbitration until after the mediation. 26 D. This Motion 27 The parties have reached a settlement of this action and the similar claims asserted by Mr] 28 Ugalde. Ms. Bieger and Mr. Ugalde (“Plaintiffs”) now move for an order approving the filing of] a proposed Second Amended Complaint (“SAC”), which Mr. Ugalde as a plaintiff and adds certain claims pursued by Plaintiffs in arbitration to those previously asserted here;' preliminarily approving the settlement of the class and PAGA claims; provisionally certifying the settlement class; approving the form and method for providing notice to the class; and scheduling a final fairness hearing. II. LEGAL STANDARDS FOR SETTLEMENT APPROVAL A. Class Action Generally, “questions whether a [class action] settlement was fair and reasonable, whether notice to the class was adequate, whether certification of the class was proper, and 10 whether the attorney fee award was proper are matters addressed to the trial court’s broad 11 discretion.” (Wershba v. Apple Computer, Inc. (2001) 91 Cal.App.4th 224, 234-235 (Wershba), 12 disapproved of on other grounds by Hernandez v. Restoration Hardware, Inc. (2018) 4 Cal.5th 13 260.) 14 In determining whether a class settlement is fair, adequate and reasonable, the 15 trial court should consider relevant factors, such as the strength of plaintiffs’ case, 16 the risk, expense, complexity and likely duration of further litigation, the risk of 17 maintaining class action status through trial, the amount offered in settlement, the 18 extent of discovery completed and the stage of the proceedings, the experience 19 and views of counsel, the presence of a governmental participant, and the reaction 20 of the class members to the proposed settlement. 21 (Wershba, supra, 91 Cal.App.4th at pp. 244-245, internal citations and quotations omitted.) 22 In general, the most important factor is the strength of the plaintiffs’ case on the merits, 25 balanced against the amount offered in settlement. (See Kullar v. Foot Locker Retail, Inc. (2008) 24 168 Cal.App.4th 116, 130 (Kud/ar).) But the trial court is free to engage in a balancing and 25 26 ' Specifically, the SAC adds allegations that Defendant failed to pay overtime wages because it 27 did not include nondiscretionary bonus and commission wages in employees’ rates of pay; failed to reimburse employees for business expenses associated with use of their personal cell phones 28 to perform work; failed to timely pay and properly document commission wages; and failed to timely provide copies of wage statements and signed instruments as well as personnel records. 4 weighing of factors depending on the circumstances of each case. (Wershba, supra, 91 Cal.App.4th at p. 245.) The trial court must examine the “proposed settlement agreement to the extent necessary to reach a reasoned judgment that the agreement is not the product of fraud or overreaching by, or collusion between, the negotiating parties, and that the settlement, taken as a whole, is fair, reasonable and adequate to all concerned.” (Jbid., citation and internal quotation marks omitted.) The burden is on the proponent of the settlement to show that it is fair and teasonable. However “a presumption of fairness exists where: (1) the settlement is reached through arm’s-length bargaining; (2) investigation and discovery are 10 sufficient to allow counsel and the court to act intelligently; (3) counsel is 11 experienced in similar litigation; and (4) the percentage of objectors is small.” 12 (Wershba, supra, 91 Cal.App.4th at p. 245, citation omitted.) The presumption does not permit 13 the Court to “give rubber-stamp approval” to a settlement; in all cases, it must “independently 14 and objectively analyze the evidence and circumstances before it in order to determine whether 15 the settlement is in the best interests of those whose claims will be extinguished,” based on a 16 sufficiently developed factual record. (Kullar, supra, 168 Cal.App.4th at p. 130.) 17 B. PAGA 18 Labor Code section 2699, subdivision (1) provides that “[t]he superior court shall review 19 and approve any penalties sought as part of a proposed settlement agreement pursuant to” 20 PAGA. The court’s review “ensur[es] that any negotiated resolution is fair to those affected.” 21 (Williams v. Superior Court (2017) 3 Cal.Sth 531, 549.) Seventy-five percent of any penalties 22 recovered under PAGA go to the Labor and Workforce Development Agency (“LWDA”), 25 leaving the remaining twenty-five percent for the aggrieved employees. (Iskanian v. CLS 24 Transportation Los Angeles, LLC (2014) 59 Cal.4th 348, 380.) 25 “[TW]hen a PAGA claim is settled, the relief provided ... [should] be genuine and 26 meaningful, consistent with the underlying purpose of the statute to benefit the public ....” 27 (Villalobos v. Calandri Sonrise Farm LP (C.D. Cal., July 22, 2015, No. CV122615PSGJEMX) 28 2015 WL 12732709, at *13.) The settlement must be reasonable in light of the potential verdict value. (See O’Connor v. Uber Technologies, Inc. (N.D. Cal. 2016) 201 F.Supp.3d 1110, 1135 [rejecting settlement of less than one percent of the potential verdict].) But a permissible settlement may be substantially discounted, given that courts often exercise their discretion to award PAGA penalties below the statutory maximum even where a claim succeeds at trial. (See Viceral v. Mistras Group, Inc. (N.D. Cal., Oct. 11, 2016, No. 15-CV-02198-EMC) 2016 WL 5907869, at *8-9.) il. SETTLEMENT PROCESS According to Plaintiffs’ counsel, the arbitration of Ms. Bieger’s claims involved several hearings, dozens of discovery requests, and the production of over 10,000 pages of employment 10 records, including Defendant’s written employment policies and an arbitrator-approved sampling} 11 of 74 employees’ wage statements, timekeeping and payment records, commission agreements, 12 offer letters, and similar records. Ms. Bieger sat for an all-day deposition on March 12, 2020. 13 As the COVID-19 pandemic developed, the parties agreed to participate in an all-day mediation 14 on July 8, 2020 with Hon. Leo Papas (Ret.) before completing discovery and motion practice. 15 The mediation did not result in a settlement, but the mediator made a proposal to resolve 16 the action on a class basis. On August 3, 2020, after learning that this Court (Judge Walsh) had 17 preliminarily approved the settlement in Merritt v. Houzz Inc., et al. (Santa Clara County, No. 18 19CV341181) (Merritt) and tentatively dismissed the class allegations in Geenen v. Houzz, Inc., 19 et al. (Santa Clara County, No. 19CV352332), the parties accepted the mediator’s proposal and 20 reached a settlement in principle, which was ultimately formalized in the Joint Stipulation of 21 Class Action Settlement now before the Court. 22 Iv. SETTLEMENT PROVISIONS 25 The non-reversionary gross settlement amount is $585,000. Attorney fees of up to 24 $195,000 (one-third of the gross settlement), litigation costs not to exceed $10,000, and 25 administration costs of up to $17,000 will be paid from the gross settlement. $16,000 will be 26 allocated to PAGA penalties, 75 percent of which will be paid to the LWDA. Ms. Bieger will 27 seek an enhancement award of $10,000, and Mr. Ugalde will seek $5,000. 28 The net settlement, approximately $338,000 by the Court’s calculation, will be distributed to individual class members proportionally based on their weeks worked during the class period. The average settlement payment will be approximately $203 to each of the 1,654 class members, Class members will not be required to submit a claim to receive their payments. Settlement awards will be allocated 50 percent to wages and 50 percent to interest and penalties for tax purposes, and the employer’s share of any payroll taxes will be paid separately. Funds associated with checks uncashed after 180 days will be paid to the Employee Rights Advocacy Institute for Law and Policy. Class members who do not opt out of the settlement will release “the claims alleged in 10 Plaintiffs’ Second Amended Class Action Complaint ... arising during the Class Period,” as well 11 as “those claims that could have been brought by Plaintiffs in the Second Amended Class Action 12 Complaint arising from the factual allegations contained therein.” 13 Plaintiffs’ counsel declares that this action also caused Houzz to implement a new system 14 in December of 2018, which calculates all working hours to the minute, pays nonexempt 15 employees for all recorded hours worked, and automatically pays premium wages for any 16 untimely, shortened, or missed meal periods, with or without proof of a violation. Discovery 17 confirmed a decline in potential violations after this system was implemented. 18 Vv. FAIRNESS OF SETTLEMENT 19 As discussed in detail in the Declaration of Jamin S. Soderstrom supporting Plaintiffs’ 20 motion, Plaintiffs valued the unpaid wage claim at $173,470 for the putative class and the meal 21 and rest break claims at $138,776, estimating a relatively limited number of violations and a ten 22 percent chance of success on a class basis. Because their discovery sampling did not show that 25 other employees received offer letters with similar discrepancies to Ms. Bieger’s, Plaintiffs did 24 not attribute any value to this claim. Discovery also did not show a common practice of paying 25 male employees more than female employees for the same work, so Plaintiffs similarly attributed| 26 no value to this claim, and it appears that they assigned little to no value to their claims arising 27 from Defendant’s recordkeeping considering evidence that Defendant gave signed copies of 28 commission plans and obtained signed receipts, but simply did not place them in employees’ personnel files. Plaintiffs valued the wage statement claims at $248,100 and the waiting time penalties at $27,360. They estimated that the claim for failure to reimburse business expenses was worth only $6,929, assuming a ten percent chance of success on a class basis. These estimates also reflect limitations on the class period for certain violations in light of the Merritt settlement. Finally, Plaintiffs estimated that up to $2,527,957 in PAGA penalties could realistically be recovered, including $115,650 associated with commission violations, assuming either a five or a ten percent likelihood of a full recovery. Plaintiffs submit that the settlement is fair and reasonable to the class, particularly considering the Merritt settlement and the presence of an arbitration agreement with a class 10 action waiver that was recently enforced by this Court in a related action. The Court agrees, and 11 finds that the class settlement warrants preliminary approval. In addition, the PAGA allocation 12 provided by the settlement is genuine, meaningful, and fair to those impacted. 13 The Court retains an independent right and responsibility to review the requested attorney| 14 fees and award only so much as it determines to be reasonable. (See Garabedian v. Los Angeles 15 Cellular Telephone Co. (2004) 118 Cal.App.4th 123, 127-128.) While 1/3 of the common fund 16 for attorney fees is generally considered reasonable, counsel shall submit lodestar information 17 prior to the final approval hearing in this matter so the Court can compare the lodestar 18 information with the requested fees. (See Laffitte v. Robert Half Intern. Inc. (2016) 1 Cal.5th 19 480, 504 [trial courts have discretion to double-check the reasonableness of a percentage fee 20 through a lodestar calculation].) 21 VI. PROPOSED SETTLEMENT CLASS 22 Plaintiffs request that the following settlement class be provisionally certified: 25 all nonexempt workers employed by Defendant in California at any time from 24 January 4, 2016 through October 1, 2020. 25 A. Legal Standard for Certifying a Class for Settlement Purposes 26 Rule 3.769(d) of the California Rules of Court states that “[t]he court may make an order 27 approving or denying certification of a provisional settlement class after [a] preliminary 28 settlement hearing.” California Code of Civil Procedure Section 382 authorizes certification of a| class “when the question is one of a common or general interest, of many persons, or when the parties are numerous, and it is impracticable to bring them all before the court ....” Section 382 requires the plaintiff to demonstrate by a preponderance of the evidence: (1) an ascertainable class and (2) a well-defined community of interest among the class members. (Sav-On Drug Stores, Inc. v. Superior Court (2004) 34 Cal.4th 319, 326, 332 (Sav-On Drug Stores).) “Other relevant considerations include the probability that each class member will come forward ultimately to prove his or her separate claim to a portion of the total recovery and whether the class approach would actually serve to deter and redress alleged wrongdoing.” (Linder v. Thrifty Oil Co. (2000) 23 Cal.4th 429, 435.) The plaintiff has the burden of 10 establishing that class treatment will yield “substantial benefits” to both “the litigants and to the 11 court.” (Blue Chip Stamps v. Superior Court (1976) 18 Cal.3d 381, 385.) 12 In the settlement context, “the court’s evaluation of the certification issues is somewhat 13 different from its consideration of certification issues when the class action has not yet settled.” 14 (Luckey v. Superior Court (2014) 228 Cal.App.4th 81, 93.) As no trial is anticipated in the 15 settlement-only context, the case management issues inherent in the ascertainable class 16 determination need not be confronted, and the court’s review is more lenient in this respect. (/d. 17 at pp. 93-94.) But considerations designed to protect absentees by blocking unwarranted or 18 overbroad class definitions require heightened scrutiny in the settlement-only class context, since} 19 the court will lack the usual opportunity to adjust the class as proceedings unfold. (/d. at p. 94.) 20 B. Ascertainable Class 21 A class is ascertainable “when it is defined in terms of objective characteristics and 22 common transactional facts that make the ultimate identification of class members possible when| 25 that identification becomes necessary.” (Noel v. Thrifty Payless, Inc. (2019) 7 Cal.5th 955, 980 24 (Noel).) A class definition satisfying these requirements 25 puts members of the class on notice that their rights may be adjudicated in the 26 proceeding, so they must decide whether to intervene, opt out, or do nothing and 27 live with the consequences. This kind of class definition also advances due 28 process by supplying a concrete basis for determining who will and will not be bound by (or benefit from) any judgment. (Noel, supra, 7 Cal.5th at p. 980, citation omitted.) “As a tule, a representative plaintiff in a class action need not introduce evidence establishing how notice of the action will be communicated to individual class members in order to show an ascertainable class.” (Noel, supra, 7 Cal.Sth at p. 984.) Still, it has long been held that “[c]lass members are ‘ascertainable’ where they may be readily identified ... by reference to official records.” (Rose v. City of Hayward (1981) 126 Cal. App. 3d 926, 932, disapproved of on| another ground by Noel, supra, 7 Cal.5th 955; see also Cohen v. DIRECTV, Inc. (2009) 178 10 Cal.App.4th 966, 975-976 [“The defined class of all HD Package subscribers is precise, with 11 objective characteristics and transactional parameters, and can be determined by DIRECTV’s 12 own account records. No more is needed.” ].) 13 Here, the estimated 1,654 class members are readily identifiable based on Defendant’s 14 records, and the settlement class is appropriately defined based on objective characteristics. The 15 Court finds the settlement class is numerous and ascertainable. 16 Cc. Community of Interest 17 The “community-of-interest” requirement encompasses three factors: (1) predominant 18 questions of law or fact, (2) class representatives with claims or defenses typical of the class, and| 19 (3) class representatives who can adequately represent the class. (Sav-On Drug Stores, supra, 34 20 Cal.4th at pp. 326, 332.) 21 For the first community of interest factor, “[i]n order to determine whether common 22 questions of fact predominate the trial court must examine the issues framed by the pleadings 25 and the law applicable to the causes of action alleged.” (Hicks v. Kaufman & Broad Home Corp. 24 (2001) 89 Cal.App.4th 908, 916 (Hicks).) The court must also examine evidence of any conflict 25 of interest among the proposed class members. (See J.P. Morgan & Co., Inc. v. Superior Court 26 (2003) 113 Cal.App.4th 195, 215.) The ultimate question is whether the issues which may be 27 jointly tried, when compared with those requiring separate adjudication, are so numerous or 28 substantial that the maintenance of a class action would be good for the judicial process and to 10 the litigants. (Lockheed Martin Corp. v. Superior Court (2003) 29 Cal.4th 1096, 1104-1105 (Lockheed Martin).) “As a general rule if the defendant’s liability can be determined by facts common to all members of the class, a class will be certified even if the members must individually prove their damages.” (Hicks, supra, 89 Cal.App.4th at p. 916.) Here, common legal and factual issues predominate. Plaintiffs’ claims all arise from Defendant’s wage and hour practices applied to the similarly-situated class members. As to the second factor, The typicality requirement is meant to ensure that the class representative is able to adequately represent the class and focus on common issues. It is only when a 10 defense unique to the class representative will be a major focus of the litigation, 11 or when the class representative’s interests are antagonistic to or in conflict with 12 the objectives of those she purports to represent that denial of class certification is 13 appropriate. But even then, the court should determine if it would be feasible to 14 divide the class into subclasses to eliminate the conflict and allow the class action 15 to be maintained. 16 (Medrazo v. Honda of North Hollywood (2008) 166 Cal. App. 4th 89, 99, internal citations, 17 brackets, and quotation marks omitted.) 18 Like other members of the class, Plaintiffs were employed by Defendant as hourly 19 employees and allege that they experienced the violations at issue. The anticipated defenses are 20 not unique to Plaintiffs, and there is no indication that Plaintiffs’ interests are otherwise in 21 conflict with those of the class. 22 Finally, adequacy of representation “depends on whether the plaintiffs attorney is 25 qualified to conduct the proposed litigation and the plaintiff's interests are not antagonistic to the 24 interests of the class.” (McGhee v. Bank of America (1976) 60 Cal.App.3d 442, 450.) The class 25 representative does not necessarily have to incur all of the damages suffered by each different 26 class member in order to provide adequate representation to the class. (Wershba, supra, 91 27 Cal.App.4th at p. 238.) “Differences in individual class members’ proof of damages [are] not 28 fatal to class certification. Only a conflict that goes to the very subject matter of the litigation 11 will defeat a party’s claim of representative status.” (/bid., internal citations and quotation marks omitted.) Plaintiffs have the same interest in maintaining this action as any class member would have. Further, they have hired experienced counsel. Plaintiffs have sufficiently demonstrated adequacy of representation. D. Substantial Benefits of Class Certification “[A] class action should not be certified unless substantial benefits accrue both to litigants and the courts. .. .” (Basurco v. 21st Century Ins. (2003) 108 Cal.App.4th 110, 120, internal quotation marks omitted.) The question is whether a class action would be superior to 10 individual lawsuits. (Jbid.) “Thus, even if questions of law or fact predominate, the lack of 11 superiority provides an alternative ground to deny class certification.” (/bid.) Generally, “a 12 class action is proper where it provides small claimants with a method of obtaining redress and 13 when numerous parties suffer injury of insufficient size to warrant individual action.” (/d. at pp. 14 120-121, internal quotation marks omitted.) 15 Here, there are an estimated 1,654 members of the proposed class. It would be inefficient 16 for the Court to hear and decide the same issues separately and repeatedly for each class 17 member. Further, it would be cost prohibitive for each class member to file suit individually, as 18 each member would have the potential for little to no monetary recovery. It is clear that a class 19 action provides substantial benefits to both the litigants and the Court in this case. 20 VIL. NOTICE 21 The content of a class notice is subject to court approval. (Cal. Rules of Court, rule 22 3.769(f).) “The notice must contain an explanation of the proposed settlement and procedures 25 for class members to follow in filing written objections to it and in arranging to appear at the 24 settlement hearing and state any objections to the proposed settlement.” (/bid.) In determining 25 the manner of the notice, the court must consider: “(1) The interests of the class; (2) The type of 26 relief requested; (3) The stake of the individual class members; (4) The cost of notifying class 27 members; (5) The resources of the parties; (6) The possible prejudice to class members who do 28 12 not receive notice; and (7) The res judicata effect on class members.” (Cal. Rules of Court, rule 3.766(e).) Here, the notice describes the lawsuit, explains the settlement, and instructs class members that they may opt out of the settlement or object. The gross settlement amount and estimated deductions are provided. Class members’ estimated payments are reflected on an “Employment Information Sheet” to be enclosed with the notice, and class members are informed of their qualifying workweeks as reflected in Defendant’s records and instructed how to dispute this information. Class members are given 45 days to request exclusion from the class, submit a written objection to the settlement, or dispute their workweek information. The 10 notice instructs class members that they may appear at the final fairness hearing to make an oral 11 objection without submitting a written objection, and explains how they can appear remotely 12 through CourtCall by contacting class counsel. 13 The form of notice is generally adequate and is approved, with the following 14 modifications to the “Employment Information Sheet”: first, the estimated settlement payment 15 must be displayed in bold within a box set off from the rest of the text and second, the note 16 regarding the forwarding of uncashed checks to the State of California, Office of the State 17 Controller, Unclaimed Property Division must be corrected to reflect that funds associated with 18 uncashed checks will be remitted to the Employee Rights Advocacy Institute for Law and Policy] 19 Turning to the notice procedure, the parties have selected Simpluris, Inc. as the settlement] 20 administrator. The administrator will mail the notice packet within 28 calendar days of 21 preliminary approval. Any notice packets returned as undeliverable will be re-mailed to any 22 forwarding address provided, and class members who receive a re-mailed notice will have at 25 least 14 days to respond. 24 These notice procedures are appropriate and are approved, with the modifications that the! 25 administrator shall update class members’ addresses using the National Change of Address 26 Database prior to mailing the notices and shall make reasonable efforts to locate an updated 27 mailing address for any notice packet that is returned without a forwarding address. 28 13 VII. CONCLUSION AND ORDER Subject to the modifications to the class notice and notice procure directed above, the Court GRANTS Plaintiffs’ motion for preliminary approval. The final approval hearing shall take place on June 10, 2021 at 1:30 p.m. in Dept. 1. The following class is preliminarily certified for settlement purposes: all nonexempt workers employed by Defendant in California at any time from January 4, 2016 through October 1, 2020. Before final approval, Plaintiffs shall lodge any individual settlement agreements they may have executed with Defendants in connection with their employment for the Court’s review. 10 IT IS SO ORDERED. 11 12 Date: LU. The Honorable Sunil R. Kulkarni 13 Judge of the Superior Court 14 15 16 17 18 19 20 21 22 25 24 25 26 27 28 14