Williams v. Aramark Campus, LLC ( 2024 )

1 2 3 4 5 6 7 8 9 10 11 12 13 14 UNITED STATES DISTRICT COURT 15 EASTERN DISTRICT OF CALIFORNIA 16 ARMAND WILLIAMS and ALAN MICHAEL Case No. Case No.: 1:23-cv-00291-EPG LARRECOU, individually and on behalf of 17 themselves and all others similarly situated, ORDER APPROVING JOINT STIPULATION FOR COURT 18 Plaintiffs, APPROVAL OF SETTLEMENT OF v. FLSA AND PAGA CLAIMS 19 ARAMARK CAMPUS, LLC., a Delaware (ECF No. 27) 20 limited liability company; YOSEMITE HOSPITALITY, LLC, a Delaware limited 21 liability company; and DOES 1-50, inclusive, 22 Defendants. 23 24 25 26 27 28 1 Plaintiffs Armand Williams and Alan Larrecou (“Plaintiffs”) and Defendants Aramark 2 Campus, LLC and Yosemite Hospitality LLC (“Defendants”) (collectively the “Parties”), by and 3 through their respective counsel of record, hereby enter into the following stipulation and joint 4 request that the Court approve the settlement of Plaintiffs’ individual Federal Labor Standards 5 Act (“FLSA”) claims and individual California Private Attorneys General Act (“PAGA”) claims 6 and dismiss the action with prejudice as to Plaintiffs’ individual claims for the following reasons: 7 WHEREAS, on December 23, 2022, Plaintiffs filed a complaint against Defendants in the 8 Superior Court of California, Mariposa County, captioned, Armand Williams, et al. v. Aramark 9 Campus, et al. (the “Civil Action”) alleging only California state law claims and specifically, 10 (1) Failure to Pay Minimum Wages (Labor Code §§ 204, 210, 216, 558, 1182.12, 1194, 1197, 11 1197.1, and 1198; Violation of the California Industrial Welfare Commission (“IWC”) Wage 12 Orders 5-2001 and 7-2001); (2) Failure to Pay Overtime Owed (Labor Code §§ 510, 1194, 1197 13 and 1198; Violation of IWC Wage Orders 5-2001 and 7-2001); (3) Failure to Provide Lawful 14 Meal Periods (Labor Code §§ 218.6, 226.7, and 513; Violation of IWC Wage Orders; and Civil 15 Code section 3287); (4) Failure to Authorize and Permit Rest Periods (Labor Code §§ 218.6, and 16 226.7; Violation of IWC Wage Orders; and Civil Code 3287); (5) Failure to Timely Pay Wages 17 During Employment (Labor Code §§ 201.3, 204, 204(b), 204.1, 204.2, 204.11, 205, 205.5, 218.5, 18 218.6, 226.7, 510, 1194 and 1197.5); (6) Failure to Reimburse Necessary Expenses (Labor Code 19 § 2802); (7) Knowing and Intentional Failure to Comply with Itemized Wage Statement 20 Provisions (Labor Code §§ 226, 226(a), 1174, and 1175; and Violation of IWC Wage Orders); 21 and (8) Violation of the Unfair Competition Law (Business and Professions Code § 17200; 22 Violation of IWC Wage Orders; and California Code of Civil Procedure § 1021.5); 23 WHEREAS, on January 27, 2023, Plaintiff filed a First Amended Complaint (“FAC”), 24 adding Alan Michael Larrecou as an additional named plaintiff; 25 WHEREAS, on February 24, 2023, Defendants removed the Civil Action to the United 26 States District Court, Eastern District of California; 27 WHEREAS, on February 28, 2023, Plaintiffs filed a PAGA action against Defendants in 28 the Mariposa County Superior Court, captioned Armand Williams, et al. v. Aramark Campus, 1 LLC, et al. (the “PAGA Action”); 2 WHEREAS, on March 17, 2023, Defendants filed a motion to dismiss all of the claims in 3 the FAC based upon the federal enclave doctrine; 4 WHEREAS, on March 31, 2023, Plaintiffs filed a Second Amended Complaint (“SAC”) 5 in the United States District Court, Eastern District of California, alleging only federal claims 6 under the Fair Labor Standards Act (“FLSA”) for Failure to Pay Minimum Wages [29 U.S.C. 7 section 201, et seq.] and Failure to Pay Overtime Wages [29 U.S.C. section 201, et seq.]; 8 WHEREAS, on June 5, 2023, Plaintiffs voluntarily dismissed the PAGA Action without 9 prejudice; 10 WHEREAS, as described more fully below, the FLSA requires that the Court review and 11 approve the settlement of any FLSA claims; 12 WHEREAS, the PAGA, and specifically California Labor Code § 2699(l)(2), requires that 13 the Court review and approve the settlement of any claims filed pursuant to PAGA; 14 WHEREAS, because Plaintiffs filed their Civil Action pursuant to the FLSA and their 15 PAGA Action pursuant to PAGA, the Parties are jointly requesting that the Court review and 16 approve the settlement of their individual FLSA and PAGA claims; and 17 WHEREAS, the Parties stipulate and agree that this action should be dismissed in its 18 entirety and with prejudice. 19 I. COURT APPROVAL OF FLSA SETTLEMENTS IS REQUIRED. 20 An employee’s claim under the FLSA may not be settled without the supervision and 21 approval of either the Secretary of Labor or a United States District Court. Seminiano v. Xyris 22 Enter., Inc., 602 F. App'x 682, 683 (9th Cir. 2015) ("FLSA claims may not be settled without 23 approval of either the Secretary of Labor or a district court.") (citations omitted); Lynn’s Food 24 Stores, Inc. v. United States, et al., 679 F.2d 1350, 1352-53 (11th Cir. 1982); Zhou v. Wang’s 25 Restaurant, 2006 U.S. Dist LEXIS 84397, *3-4 (N.D. Cal. November 9, 2006); Camilo v. Ozuna, 26 No. 18-CV-02842-VKD, 2019 WL 2141970, at *6 (N.D. Cal. May 16, 2019); Nen Thio v. Genji, 27 LLC, 14 F.Supp.3d 1324, 1333 (N.D. Cal. 2014). The proper procedure for obtaining Court 28 1 approval of the settlement of FLSA claims is for the parties to present to the Court a proposed 2 settlement. Zhou, 2006 U.S. Dist. LEXIS 84397 at *4. 3 In reviewing the settlement agreement, the Court must determine whether the proposed 4 settlement is a fair and reasonable resolution of a bona fide dispute. Lynn’s Food Stores, 679 5 F.2d at 1355. “If a settlement in an employee FLSA suit does reflect a reasonable compromise 6 over issues, such as . . . computation of back wages, that are actually in dispute[,] . . . the district 7 court [may] approve the settlement in order to promote the policy of encouraging settlement of 8 litigation.” Id. 9 II. THE PROPOSED SETTLEMENT OF PLAINTIFFS’ FLSA CLAIMS IS A FAIR AND REASONABLE RESOLUTION OF A BONA FIDE DISPUTE REGARDING 10 ALLEGED UNPAID WAGES. 11 Plaintiffs allege that they were required to work off-the-clock and, as a result, allege that 12 they did not receive minimum wages and overtime under the FLSA for off-the-clock work. SAC 13 ¶¶ 24, 29, 39, 44, 80. Plaintiffs also allege that they received non-discretionary incentive 14 compensation that was not included in the regular rate of pay and, as a result, allege that they did 15 not receive overtime under the FLSA. SAC ¶¶ 25, 36, 91. 16 Court approval of the Parties’ settlement is proper because a bona fide dispute exists as to 17 the liability for Plaintiffs’ alleged unpaid minimum wages and overtime claims under the FLSA. 18 Plaintiffs and Defendant have provided Initial Disclosures and Defendant has propounded written 19 discovery. The Parties have exchanged documents and information to facilitate their settlement 20 negotiations. The Parties agree that no records exist regarding any alleged off-the-clock work. 21 Defendant contends that it did not require them to perform any work off-the-clock, as their jobs 22 required them to be performed in-person at the worksite. In addition, Plaintiffs were paid only an 23 hourly rate of pay and neither received non-discretionary incentive compensation that would need 24 to be factored into the regular rate of pay. As a result, Defendant disputed that Plaintiffs were 25 owed any alleged unpaid minimum wages or overtime under the FLSA. 26 “A bona fide dispute exists when there are legitimate questions about the existence and 27 extent of the defendant's FLSA liability.” Jennings v. Open Door Mktg., LLC, No. 15-CV-4080- 28 KAW, 2018 WL 4773057, at *4 (N.D. Cal. Oct. 3, 2018). Given the Parties’ bona fide dispute 1 regarding liability and absence of any records to support Plaintiff’s claims for alleged unpaid 2 minimum wages and overtime under the FLSA, and after weighing the risks and costs of 3 continued litigation, the Parties reached a compromise to settle Plaintiffs’ FLSA claims. 4 Plaintiffs’ counsel believes this resolution represents a fair and reasonable compromise of their 5 claims. 6 The Parties executed a Settlement Agreement and General Release of all of Plaintiffs’ 7 claims, including their FLSA, PAGA and other California law claims, as well as any other claims 8 Plaintiffs could potentially bring in connection with their employment with Defendant, for which 9 Defendant denies all liability. The Parties allocated the settlement payments as follows: 10 (a) payment to Plaintiffs in compromise of claims for alleged unpaid wages (under the FLSA), 11 (b) payment to Plaintiffs in compromise of claims for alleged non-wage damages, including 12 alleged penalties and statutory interest, and (c) payment to “James Hawkins APLC” in 13 compromise of claims for and relating to Plaintiffs’ attorneys’ fees and costs incurred in litigating 14 the claims contained in the Civil Action and the PAGA Action. The amounts referenced in the 15 Settlement Agreement are a fair and reasonable compromise of the Parties’ good faith and bona 16 fide dispute and include a payment in compromise for Plaintiff’s FLSA claims as well as 17 Plaintiff’s claims under California law, which are not subject to the Court’s approval. As such, 18 because the settlement amounts provide for not just Plaintiffs’ FLSA claims, but also his 19 California law claims, the Court can be confident that Plaintiff is not waiving any claims for 20 which there is no dispute. Saleh v. Valbin Corp., No. 17-CV-00593-LHK, 2018 WL 6002320, at 21 *2 (N.D. Cal. Nov. 15, 2018). True and correct copies of the Parties’ settlement agreements are 22 attached hereto as Exhibits 1 and 2. 23 III. THE SETTLEMENT OF PLAINTIFFS’ PAGA CLAIMS. 24 California Labor Code § 2699(l)(2) states that the “court shall review and approve any 25 settlement of any civil action filed pursuant to [the PAGA].” The Parties’ settlement agreement 26 provides that no PAGA penalties are being paid to the California Labor and Workforce 27 Development Agency (“LWDA”) as part of the Parties’ settlement of this action and that 28 Plaintiffs’ release of their PAGA claims against Defendants applies only to Plaintiffs themselves 1 and does not apply to other employees and does not bar other current or former employees from 2 prosecuting a PAGA action against Defendant. 3 IV. RESPONSE TO THE COURT’S RECENT ORDER 4 In the Court’s December 11, 2023, Order (Dkt. 24), the Court stated that if the parties 5 “believe that the class and collective claims are no longer pending, they shall explain to the Court 6 how this is so, including citation to the record.” The Parties respond as follows: 7 As demonstrated with Defendants’ motion to dismiss, Defendants have taken the position 8 that Plaintiffs cannot assert any California law claims based on the federal enclave doctrine. As a 9 result, when Plaintiffs filed the SAC, they alleged only federal law claims under the FLSA 10 (specifically, a claim for alleged unpaid minimum wages and a claim for unpaid overtime, both 11 under the FLSA). The FLSA provides the potential for a collective action. See 29 U.S.C. 12 § 216(b). The FLSA claims are not brought as a class claim under Rule 23, but rather a collective 13 action claim. The Ninth Circuit has made clear that a collective action under the FLSA is not the 14 same as a class action under Rule 23. See Campbell v. City of L.A., 903 F.3d 1090, 1100 (9th Cir. 15 2018) (“Collective actions and class actions are creatures of distinct texts—collective actions of 16 section 216(b), and class actions of Rule 23 —that impose distinct requirements.”). Plaintiffs’ 17 only claims in the SAC are federal FLSA claims. See SAC ¶¶ 73 – 94. As a result, Plaintiffs do 18 not assert any class claims under Rule 23. The purported “Rule 23 California Class Allegations” 19 (SAC ¶¶ 73 – 94) may be stricken as they are not connected to the claims actually alleged. 20 With respect to Plaintiffs’ alleged collective action claims, the Parties do not seek to settle 21 those claims, only the Plaintiffs’ individual FLSA claims. As a result, the Court need not take any 22 action with respect to the alleged collective action claims and the allegations (to the extent they 23 seek to impact any individual other than Plaintiffs) may be stricken. 24 V. STIPULATION OF DISMISSAL WITH PREJUDICE 25 Pursuant to F.R.C.P. 41(a)(1)(A)(ii), the Parties hereby stipulate to dismiss the individual 26 claims in this action with prejudice, provided that the Court approves of the settlement of 27 Plaintiffs’ FLSA and PAGA claims. 28 / / / 1 IT IS SO STIPULATED. 2 Dated: January 22, 2024 3 4 By /s/ Christina Lucio Christina Lucio 5 Attorney for Plaintiffs 6 ARMAND WILLIAMS and ALAN LARRECOU 7 8 Dated: January 22, 2024 MORGAN, LEWIS & BOCKIUS LLP 9 10 By /s/ Eric Meckley Eric Meckley 11 Attorneys for Defendants 12 ARAMARK CAMPUS, LLC, and YOSEMITE HOSPITALITY, LLC 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1 ORDER 2 Upon review of the parties’ stipulated dismissal (ECF No. 27), the Court concludes that 3 || the compromise of Plaintiffs’ claims for alleged overtime, liquidated damages, and attorneys’ fees 4 || under the Fair Labor Standards Act ("FLSA”) to be a fair and reasonable compromise of FLSA 5 || Claims as to which there are good faith and bona fide disputes regarding liability, and thus the 6 settlement of the FLSA claims is approved. Additionally, the Court approves the Plaintiffs’ 7 settlement of their claims under the California Private Attorneys General Act. 8 Accordingly, IT IS ORDERED that, pursuant to the parties’ stipulation, this action is 9 dismissed with prejudice, under Federal Rule of Civil Procedure, Rule 41(a)(1)(A)Gi). The Clerk 10 of Court is directed to close this action. 11 || ITIS SO ORDERED. | pated: _January 29, 2024 [Je hey □ 13 UNITED STATES MAGISTRATE JUDGE 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28