Leticia Bernabe Benitez v. Westerlay Orchids, LLC, et al

Case Number

23CV04353

Case Type

Hearing Date / Time

Wed, 06/11/2025 - 10:00

Nature of Proceedings

Plaintiff’s Motion for Preliminary Approval Of Class Action And PAGA Settlement

Tentative Ruling

For Plaintiff Leticia Bernabe Benitez: Shoham J. Solouki, Grant Joseph Savoy, Solouki Savoy, LLP

                                   

For Defendants Westerlay Orchids, LP, TJO Floral, LLC, and Antoine Overgaag: Rafael Gonzalez, Christina M. Behrman, Sean Stratford-Jones, Mullen & Henzell L.L.P.

RULING

For all reasons discussed herein, the motion of Plaintiff for preliminary approval of class action and “PAGA” settlement is granted. Counsel shall appear at the hearing on the motion and shall be prepared to discuss scheduling for the final settlement hearing and any other matters remaining for the Court at this time.

The final settlement hearing is set for ________________________.

Background

On March 20, 2024, with leave of Court, Plaintiff Leticia Bernabe Benitez filed a first amended class action complaint (the FACC) against Defendants Westerlay Orchids, LLC (Westerlay LLC), Westerlay Orchids, LP (Westerlay LP), TJO Floral, LLC (TJO), and Antoine Overgaag (Overgaag) (collectively, Defendants), alleging eleven causes of action: (1) failure to provide required meal periods (Lab. Code, §§ 226.7, 510, 512, 1194, 1197; IWC Wage Order Nos. 8, 13, 14 & § 11); (2) failure to provide required rest periods (Lab. Code, §§ 226.7, 512; IWC Wage Order Nos. 8, 13, 14 & § 12); (3) failure to pay overtime wages (Lab. Code, §§ 510, 1194, 1198; IWC Wage Order Nos. 8, 13, 14 & § 3); (4) failure to pay minimum wages (Lab. Code, §§ 1194, 1197; IWC Wage Order Nos. 8, 13, 14 & § 4); (5) failure to timely pay wages during employment (Lab. Code, § 204); (6) failure to pay all wages due to discharged and quitting employees (Lab. Code, §§ 201, 202, 203); (7) failure to maintain required records (Lab. Code, §§ 226, 1174; IWC Wage Order Nos. 8, 13, 14 & § 7); (8) failure to furnish accurate itemized wage statements (Lab. Code, § 226; IWC Wage Order Nos. 8, 13, 14 & § 7); (9) failure to indemnify employees for necessary expenditures (Lab. Code, § 2802); (10) unfair and unlawful business practices (Bus. & Prof. Code, § 17200 et seq.); and (11) Labor Code Private Attorneys General Act of 2004 (Lab. Code, § 2698 et seq.)

The claims and causes of action alleged in the FACC, which is the operative pleading, are brought on behalf of Plaintiff, individually, and all other similarly situated current and former non-exempt employees who were employed by Defendants at any time during the four years preceding the filing of the complaint. (FACC, ¶¶ 4-5.) As alleged in the FACC:

Defendants, who are joint employers, failed to pay their employees, including Plaintiff, wages earned for all hours worked, to provide required rest and meal periods and compensation for missed meal and rest periods, to compensate employees for all overtime hours worked, to properly maintain records and provide accurate itemized statements for each pay period, and to compensate for necessary business expenditures, and a maintained a policy and practice of requiring or permitting Plaintiffs and the members of the class to work off the clock, among other things. (FACC, ¶¶ 13-14, 19-20, 24-25, 29-30, 34, 38, 45, 49, 52-53, 57.) Plaintiff requests civil penalties under Labor Code 2698 et seq. (the Labor Code Private Attorneys General Act of 2004 or PAGA).

On April 23, 2024, Westerlay LP, TJO, and Overgaag, who the Court will also refer to collectively as Defendants, filed an answer to the FACC, generally denying its allegations and asserting fifty-one affirmative defenses.

On October 29, 2024, the parties submitted a notice that they have reached a settlement of this action.

On March 4, 2025, Plaintiff filed a motion for an order preliminarily approving a class action and PAGA settlement agreement (the Agreement or, at times, Settlement). The present motion is unopposed.

The declaration of Shoham J. Solouki:

In support of the present motion, Plaintiff submits the declaration of her counsel, Shoham J. Solouki (Solouki), who asserts that Defendants jointly own and operate Westerlay Orchids which is a grower of greenhouse orchids based in Carpinteria, California. (Solouki Decl., ¶ 7.) According to Solouki, Defendants farm 21 acres of property, and produce over 3.5 million orchids annually which are sold and delivered by Defendants to companies including Trader Joe’s and Albertsons. (Ibid.)

Solouki states that, under the terms of the Agreement, the class at issue includes all current and former non-exempt employees who worked for Westerlay LP at any time from October 3, 2019, to the date the Court enters an order granting preliminary approval of the Agreement. (Solouki Decl., ¶ 7.) (Note: Throughout his declaration, Solouki refers to a “Defendant” without identifying which of the Defendants this general term refers to. Based on information appearing in the record including the definition of “Defendant” set forth in the Agreement attached to the Solouki declaration, the Court understands this term to refer to Westerlay LP.) According to Solouki, Plaintiff worked for Westerlay LP as a non-exempt direct employee during most of the class period, including in inventory, production, and as a production supervisor, until Plaintiff’s employment ended in September 2023. (Id. at ¶ 6.) Solouki asserts that Plaintiff experienced the same treatment as others working for Westerlay LP with respect to the wage violations alleged in this action. (Ibid.)

Solouki’s office conducted a search of available public records and have not found any overlapping class, representative, or collective actions currently pending in the state of California. (Solouki Decl., ¶ 8.) Solouki further states that neither he nor other members of his firm are aware of any class, representative, or other collective actions which assert claims similar to or overlapping those set forth in this case. (Ibid.)

Solouki asserts that, in anticipation of mediation, the parties conducted investigations and discovery of the facts and law. (Solouki Dec., ¶ 9.) Plaintiff’s counsel conducted legal research, and the parties met and conferred regarding the scope of discovery necessary to engage in a productive mediation. (Id. at ¶ 25.) Pursuant to an agreement by the parties to exchange records and data prior to the mediation, Westerlay LP informally produced hundreds of pages of written policies and procedures including those pertaining to timekeeping and breaks, Plaintiff’s personnel file, and a sampling of approximately 10 percent of payroll and timekeeping data for the subject class. (Id. at ¶¶ 9 & 25-26.)

Plaintiff’s counsel’s review of the records produced by Westerlay LP, which included information relating to the size and scope of the subject class, was sufficient to permit counsel and an expert statistician retained by Plaintiff to understand the number of workweeks and pay periods at issue. (Solouki Decl., ¶¶ 9 & 13.) Solouki’s office was also able to identify multiple current and former employees of Westerlay LP who provided information which allowed Solouki and Plaintiff’s expert to clarify any discrepancies in the data provided by Westerlay LP with respect to “off-the-clock” work and rest breaks. (Id. at ¶¶ 16 & 27-28.) The interviews conducted by Solouki revealed that a majority of the class rarely received a full 10-minute rest break, missed at least one uninterrupted 10 minute break per work day, and conducted approximately 15 minutes of work per week while off-the-clock. (Id. at ¶ 28.)

Plaintiff and Westerlay LP attended a mediation session on May 23, 2024, with Louise A. LaMothe (LaMothe), who is a retired judge. (Solouki Decl., ¶ 9.) Solouki contends that the parties’ negotiations during the mediation, which lasted a full day, were adversarial and conducted at arm’s length. (Id. at ¶¶ 10 & 24.)

During the mediation, the parties discussed, with LaMothe’s guidance, Plaintiff’s claims, theories for class certification, and the defenses of Westerlay LP. (Solouki Decl., ¶¶ 10 & 20.) The parties also analyzed the potential liability of Westerlay LP for penalties and interest, and the potential risks associated with litigating this action through a contested class certification proceeding, trial, and potential appeals. (Ibid.) Though it became apparent during the mediation that many issues would be highly disputed and could pose a risk to both parties, the mediation allowed the parties to better understand each other’s respective positions as to their claims, defenses, and Westerlay LP’s potential exposure to liability. (Id. at ¶¶ 10 & 19.)

The parties were unable to reach a resolution at the mediation and, with LaMothe’s assistance, continued their efforts to resolve the case after the mediation. (Solouki Dec., ¶ 9.) As a result of the parties’ negotiations and efforts during and after the mediation, and LaMothe’s assistance, the parties reached the Agreement, a copy of which is attached to the Solouki declaration as exhibit A. (Id. at ¶¶ 9-10, 24 & Exh. A.)

Solouki states that he and Plaintiff considered several factors in reaching the decision to settle this litigation. (Solouki Decl., ¶ 13.) For example, based on the claims that are likely to survive through judgment, Plaintiff’s expert statistician provided in advance of the mediation what Solouki describes as an “accurate and detailed breakdown” of the damages and penalties to which Westerlay LP may be exposed as evidenced by the face of the payroll, timekeeping, and class data provided to the expert. (Ibid.) Based on Plaintiff’s expert’s calculations, the maximum potential exposure of Westerlay LP to damages and penalties in this action is $3,478,435.33. (Ibid.) This valuation includes unpaid wages and overtime, unpaid meal and rest break premiums based on stated violation rates, waiting time and other penalties, and civil penalties under PAGA, and is based on the number of total shifts or work weeks worked by class members and the average hourly rate of pay for the putative class. (Ibid.) Solouki believes this amount is Westerlay LP’s maximum damage exposure should the case succeed at trial. (Ibid.)

In addition, based on his experience litigating wage and hour class actions, Solouki estimates that there exists a 60 percent likelihood, or 40 percent unlikelihood or risk, of obtaining and maintaining certification of Plaintiff’s claims. (Solouki Decl., ¶ 15.) Solouki’s office further estimates that there exists a 60 percent likelihood, or 40 percent unlikelihood or risk, that Plaintiff will prevail at trial on her individual and class claims. (Ibid.) Accounting for these risk factors, Solouki asserts that the Agreement reflects a realistic damages recovery analysis when compared to the total exposure of Westerlay LP to damages. (Ibid.)

Solouki also asserts that there exists what Solouki describes as a “significant” risk that the Court may deny class certification, which is obviated by the Agreement. (Solouki Decl., ¶ 15.) Further, Solouki contends that continued litigation would reduce and delay recovery by the members of the class, whereas the proposed Agreement will provide timely relief and avoid the risk of an unfavorable judgment and the possibility of all or some of the class and representative claims being lost to a dispositive motion. (Ibid.)

Solouki also states that there exists a legitimate controversy as to each cause of action alleged by Plaintiff. (Solouki Decl., ¶ 16.) Solouki explains that the “lion share” of the nonderivative and non-penalty class damages are attributable to meal and rest break claims, that “off-the-clock work” is based solely on subjective information, such as statements given by Plaintiff and other members of the class, making these claims difficult to certify and prove, and that only meal breaks were based on objective evidence such as inaccurate time records produced by Defendants. (Ibid.) According to Solouki, Plaintiff also recognizes that proving the amount of wages due to each individual member of the class would be an expensive, time-consuming, and uncertain proposition. (Id. at ¶ 17.) These factors were considered by Plaintiff and counsel when valuing the reasonableness of the Agreement. (Id. at ¶ 16.)

Solouki asserts that on October 4, 2023, a letter detailing the violations of PAGA was submitted to the Labor and Workforce Development Agency (the LWDA) and to Defendants by certified mail. (Solouki Decl., ¶ 47 & Exh. C.) On February 11, 2025, a copy of the Agreement was uploaded to the LWDA. (Id. at ¶ 48 & Exh. D.)

The Agreement:

Under the Agreement, the “Class” is defined as all current and former non-exempt employees who worked for Westerlay LP in the State of California during the “Class Period”, which includes the time period from October 3, 2019, to the date the Court enters an order granting preliminary approval of the Agreement and the parties’ settlement. (Solouki Decl., Exh. A [Agreement] at ¶¶ 1.5, 1.12, 1.15, 1.36-1.37.) According to Solouki, the Class consists of approximately 500 individuals. (Solouki Decl., ¶ 23.) (Note: The Court will refer to members of the Class as “Class Member” or “Class Members”.)

As to the cause of action for civil penalties under PAGA, the “Aggrieved Employees” are defined in the Agreement to include all current and former non-exempt employees who worked for Westerlay LP within the State of California at any time during the “PAGA Period” which includes the period from October 4, 2022, to the date the Court enters an order granting preliminary approval of the Agreement and the parties’ settlement. (Solouki Decl., Exh. A at ¶¶ 1.4, 1.31-1.32.)

The parties have agreed that, for present purposes, Plaintiff will serve as the “Class Representative”. (Solouki Decl., Exh. A at ¶ 1.13.) Phoenix Settlement Administrators (Phoenix) will serve as the administrator to establish the settlement fund and to administer the settlement pursuant to the terms of the Agreement. (Id. at ¶¶ 1.2 & 7.1-7.3.) “Class Counsel” is defined as the firm of Solouki Savoy, LLP. (Id. at ¶ 1.6.)

Pursuant to the Agreement, Westerlay LP has agreed to pay, within 14 days after the “Effective Date” as that term is defined under the Agreement, a gross settlement amount (the GSA) of $200,000, and to separately fund and pay all employer payroll taxes that may be owed payments made under the terms of the Agreement. (Solouki Decl., Exh. A, ¶ 1.17 [definition of “Effective Date”], 1.21, 3.1, 4.2.) The GSA is non-reversionary. (Id. at ¶ 3.1.)

Phoenix will disburse the GSA without requiring the submission of any claim by any Aggrieved Employees or “Participating Class Members”, who are defined as those members of the class who do not execute and submit a compliant, valid, and timely written request to be excluded from the Agreement or the settlement. (Solouki Decl., Exh. A at ¶ 1.35, 1.41, 3.1.)

Phoenix will deduct and pay from the GSA the following amounts, each of which are subject to the Court’s approval: (1) an amount not to exceed $66,000 payable to Class Counsel (the Class Counsel Fees Payment) as reimbursement for reasonable attorney’s fees incurred by Plaintiff to prosecute this action; (2) an amount not to exceed $20,000 payable to Class Counsel (the Class Counsel Litigation Expenses Payment) as reimbursement for reasonable expenses incurred by Plaintiff to prosecute this action; and (3) an amount not to exceed $9,850 payable to Phoenix (the Administration Expenses Payment) as reimbursement for reasonable fees and expenses incurred by Phoenix. (Solouki Decl., Exh. A at ¶¶ 1.3, 1.7, 3.2.1 & 3.2.2.)  

Class Counsel will file, no later than 16 Court days prior to the hearing date of Plaintiff’s motion for final approval of the Agreement, a motion for an order approving the Class Counsel Fees Payment and Class Counsel Litigation Expenses Payment. (Solouki Decl., Exh. A at ¶¶ 1.19, 3.2.1.) Westerlay LP agrees not to oppose that motion to the extent Plaintiff does not request fees or costs which exceed the amounts stated above. (Id. at ¶ 3.2.1.)

The Administration Expenses Payment shall be made pursuant to a “not to exceed” bid to be submitted by Phoenix in connection with preliminary approval of the Agreement. (Solouki Decl., Exh. A at ¶ 3.2.2.)

To the extent the Court approves payment of the Class Counsel Fees Payment, the Class Counsel Litigation Expenses Payment, or the Administration Expenses Payment in an amount less than those set forth above, Phoenix will allocate the remainder to the net settlement amount further described below. (Solouki Decl., Exh. A at ¶¶ 3.2.1 & 3.2.2.)

To settle Plaintiff’s PAGA claims, civil penalties under PAGA (the PAGA Penalties) will be paid from the GSA in the total amount of $15,000. (Solouki Decl., Exh. A at ¶¶ 1.34, 3.2.5.) Of this amount, 75 percent or $11,250 will be allocated to the LWDA (the LWDA PAGA Payment), and 25 percent or $3,750 will be allocated to the Aggrieved Employees. (Id. at ¶¶ 1.26, 1.34, & 3.2.5.)

Each Aggrieved Employee will receive a pro rata share of the 25 percent of the PAGA Penalties described above (the Individual PAGA Payments), which will be calculated according to the number of pay periods during the PAGA Period in which an Aggrieved Employee worked for Westerlay LP for at least one day (the PAGA Pay Periods). (Solouki Decl., Exh. A at ¶¶ 1.23, 1.30, & 3.2.5.1.) To calculate the Individual PAGA Payments, Phoenix will divide the Aggrieved Employees’ 25 percent share by the total number of PAGA Pay Periods, and multiply that result by each Aggrieved Employee’s PAGA Pay Periods. (Id. at  ¶¶ 3.2.5.1.)

The Aggrieved Employees are solely responsible for taxes due on any Individual PAGA Payment, which will be reported by Phoenix on appropriate forms. (Solouki Decl., Exh. A at ¶¶ 3.2.5.1-3.2.5.2.)

The net settlement amount (the NSA) to be paid to Participating Class Members is the GSA less the Individual PAGA Payments, the LWDA PAGA Payment, the Class Counsel Fees Payment, the Class Counsel Litigation Expenses Payment, and the Administration Expenses Payment. (Solouki Decl., Exh. A at ¶ 1.27.)

Each of the Participating Class Members will receive a pro rata share of the NSA (the Individual Class Payment or Payments), which will be calculated according to the number of weeks or “workweeks” during which a Class Member worked as a non-exempt employee for Westerlay LP for at least one day during the Class Period. (Solouki Decl., Exh. A at ¶¶ 1.22, 1.44, 3.2.3.) To calculate the Individual Class Payment, Phoenix will divide the NSA by the total number of workweeks worked by all Participating Class Members during the Class Period, and multiply that result by each Participating Class Member’s workweeks. (Id. at ¶ 3.2.3.)

The parties have agreed that fifteen percent of each Individual Class Payment will be subject to tax withholding and reporting. (Solouki Decl., Exh. A at ¶ 3.2.4.1.) To the extent a Class Member opts out of the Agreement by sending Phoenix a valid and timely request, Phoenix will retain that Class Member’s Individual Class Payment in the NSA to be distributed pro rata to the Participating Class Members. (Id. at ¶¶ 1.28 & 3.2.4.2.)

Westerlay LP will, on or before 14 days after the Court grants preliminary approval of the Agreement, deliver identifying information for each Class Member including mailing addresses, social security numbers, number of workweeks, and number of PAGA Pay Periods (the Class Data) to Phoenix, who will, within 14 days after Westerlay LP funds the GSA, mail checks for all Individual Class Payments, Individual PAGA Payments, the LWDA PAGA Payment, the Administration Expenses Payment, the Class Counsel Fees Payment, and the Class Counsel Litigation Expenses Payment. (Solouki Decl., Exh. A at ¶¶ 1.8, 4.1, & 4.3.)

Checks for the Individual Class Payments or Individual PAGA Payments will be sent to Participating Class Members and Aggrieved Employees by first class mail, postage prepaid, and will prominently state the date (not less than 180 days after the date of mailing) when the check will be voided. (Solouki Decl., Exh. A at ¶ 4.4.1.) Phoenix may send a single check combining the Individual Class Payment and the Individual PAGA Payment, and will update each check recipients’ mailing address using the National Change of Address Database before mailing any checks. (Id. at ¶ 4.4.1.)

To the extent any check is returned undelivered without a forwarding address, Phoenix shall, within 7 days of receiving the returned check, either re-mail the check to the forwarding address provided, or search for an address using all reasonably available sources, methods, and means including skip traces and direct contact. (Solouki Decl., Exh. A at ¶¶ 1.10 & 4.4.2.) To the extent an Individual Class Payment check or Individual PAGA Payment check remains uncashed and is cancelled after the void date, Phoenix shall transmit the funds represented by such checks to the California Controller’s Unclaimed Property Fund in the name of that Class Member. (Id. at ¶ 4.4.3.)

Provisions relating to the notice to be provided to the Class Members are set forth in paragraph 7.4 of the Agreement. (See Solouki Decl., Exh. A at pp. 12-13.) The Agreement provides that, no later than 10 days after receiving the Class Data, Phoenix will mail to all Class Members a “COURT APPROVED NOTICE OF CLASS ACTION SETTLEMENT AND HEARING DATE FOR FINAL COURT APPROVAL” (the Class Notice), a copy of which is attached to the Agreement as Exhibit A. A Spanish translation of the Class Notice will be provided without material variation. (Id. at ¶¶ 1.11 & 7.4.2.)

The first page of the Class Notice will include an estimate of the dollar amount of any Individual Class Payment and any Individual PAGA Payment payable to that Class Member, and the number of workweeks and PAGA Pay Periods (if applicable) used to calculate these amounts. (Solouki Decl., Exh. A at ¶ 7.4.2.) Before mailing the Class Notice, Phoenix will update each Class Member’s address using the National Change of Address database. (Id. at ¶ 7.5.2.) If any Class Notice is returned to Phoenix as undelivered, Phoenix will, no later than 3 business days after receipt of the undelivered Class Notice, re-mail the Class Notice using the forwarding address provided. (Id. at ¶ 7.4.3.) If no forwarding address is provided, Phoenix will perform an investigation and search for a current mailing address using all reasonably available sources, and re-mail the Class Notice to the most current address obtained by Phoenix. (Id. at ¶¶ 1.10 & 7.4.3.)

To the extent a Class Notice is re-mailed, all deadlines stated in the Agreement with respect to objections, challenges, or requests for exclusion from the Agreement will be extended by 14 days, and Phoenix will inform that Class Member of that extended deadline with the re-mailed Class Notice. (Solouki Decl., Exh. A at ¶ 7.4.4.)

The procedures and deadlines under which Class Members may exclude themselves or “opt-out” of the Agreement, challenge the number or calculation of workweeks by Phoenix, or challenge the number of PAGA Pay Periods, are set forth in paragraphs 7.5 and 7.6 of the Agreement. (Solouki Decl., Exh. A at pp. 13-14.) These deadlines generally expire within 45 days after Phoenix mails the Class Notice to the Class Members and Aggrieved Employees, plus an additional 14 calendar days to the extent a Class Notice is returned as undeliverable. (Id. at ¶¶ 1.42 [defining “Response Deadline”], 7.5.1 [deadline to submit requests for exclusion from settlement], 7.6 [deadline to challenge calculation of workweeks].)

Every Class Member who does not submit a timely and valid written request to be excluded from the Agreement is deemed to be a Participating Class Member including with respect to the releases set forth in paragraphs 5.2 and 5.3 of the Agreement, notwithstanding whether the Class Member actually receives the Class Notice or objects to the Settlement. (Solouki Decl., Exh. A at ¶ 7.5.3.) Every Class Member who submits a valid and timely written request to be excluded from the Agreement shall not receive an Individual Class Payment, or have the right to object to the class action components of the Agreement, but shall be deemed to release the PAGA claims identified in the Agreement, and shall be eligible to receive an Individual PAGA Payment. (Id. at ¶ 7.5.4.)

To the extent the number of requests to be excluded from the Agreement exceed 10 percent of all Class Members, Westerlay LP may elect to withdraw from the Agreement. (Solouki Decl., Exh. A at ¶ 8.)

Only Participating Class Members may object to the “class action” components of the Agreement. (Solouki Decl., Exh. A at ¶¶ 7.7.1 & 7.7.3.) A Participating Class Member may either submit to Phoenix a written objection to the Agreement pursuant to the terms of the Agreement, or may appear in Court to present verbal objections at the time of the final approval hearing, provided that the objecting Class Member or their attorney files and serves a notice of appearance no later than 45 days after Phoenix mails the Class Notice, plus an additional 14 days for any Class Member whose Class Notice was re-mailed. (Id. at ¶¶ 1.42 & 7.7.2.)

The duties of Phoenix with respect to the administration of the settlement described in the Agreement are set forth in paragraph 7.8 of the Agreement, and include a duty to establish and maintain a website, to post necessary information and a copy of the Agreement on that website, to promptly review Class Member requests for exclusion from the Agreement, to provide written reports to counsel for the parties, to address and make final decisions consistent with the terms of the Agreement as to the calculation of workweeks or PAGA Pay Periods and any challenges to those calculations asserted by Class Members, and to provide a due diligence declaration and final report with respect to these obligations and any disbursements made under the Agreement. (Solouki Decl., Exh. A at ¶¶ 7.8.1-7.8.6.)

Pursuant to the terms of the settlement, Plaintiff releases Westerlay LP, TJO Floral, LLC, Paul Jacob Holdings LLC, and Toine Overgaag, among others, from all claims, damages, and liabilities of any nature and under any theory of liability “arising from or relating to any transactions or occurrences that occurred during the Class Period…” including those that reasonably could have been alleged in the complaint and claims arising out of Plaintiff’s employment with Westerlay LP. (Solouki Decl., Exh. A at ¶¶ 1.40 [defining “Released Parties”] & 5.1-5.1.1.)

The Agreement also includes a release by the Participating Class Members (the Class Released Claims). (Solouki Decl., Exh. A at ¶ 5.2.) The Class Released Claims applies to any claims, causes of actions, and demands arising during the Class Period that were alleged or reasonably could have been alleged in the complaint or ascertained in the course of this action, and include “any and all statutory, constitutional, contractual, and/or common law claims for wages, reimbursements, damages, penalties, restitution, liquidated damages, interest, attorneys’ fees, or litigation costs, including but not limited to claims arising under California Labor Code sections 200, 201, 202, 203, 204, 210, 218.5, 218.6, 226, 226.2, 226.3, 226.7, 226.8, 350, 351, 510, 512, 558, 1021.5, 1174, 1174.5, 1182.12, 1194, 1194.2, 1197, 1197.1, 1198, and 2802; the California Business and Professions Code section 17200, et seq.; and any IWC Wage Orders.” (Ibid.)The Class Released Claims also include “any and all claims involving any alleged unpaid overtime, unpaid meal period premiums, unpaid rest period premiums, unpaid minimum wages, final wages not timely paid, wages not timely paid during employment, non-compliant wage statements, failure to keep requisite payroll records, and unfair business practices.” (Ibid.)

Under the Agreement, the Aggrieved Employees release claims “for civil penalties under PAGA arising during the PAGA Period that were alleged, or reasonably could have been alleged, in” the complaint, the October 4, 2023, letter sent by Plaintiff to Westerlay LP and the LWDA, or ascertained in the course of this action (the PAGA Released Claims). (Solouki Decl., Exh. A at ¶¶ 1.33 & 5.3.) The PAGA Released Claims include claims for PAGA penalties arising out of violations of Labor Code sections 201, 202, 203, 204, 226, 226.2, 226.3, 226.7, 403, 404, 510, 512, 558, 1102.5, 1174, 1194, 1194.2, 1197, 1198, 2699, 2699.3, 2802 and any IWC Wage Orders, and any claims for PAGA penalties arising out of any alleged unpaid overtime, unpaid meal period premiums, unpaid rest period premiums, unpaid minimum wages, final wages not timely paid, wages not timely paid during employment, noncompliant wage statements, or failure to keep requisite payroll records.” (Solouki Decl., Exh. A at ¶ 5.3.)

The Court’s May 14, 2025, Minute Order:

On May 14, 2025, following a hearing on the motion, the parties submitted to the Court’s tentative ruling on the present motion, which the Court adopted in its Minute Order of the same date, as follows: 

“California Rules of Court, rule 3.769, sets forth the procedure for settlement of a class action before class certification. “In that case, certification and settlement approval occur simultaneously.” (Luckey v. Superior Court (2014) 228 Cal.App.4th 81, 93.) Under this procedure, a party to the settlement files a motion for preliminary approval, which must include the settlement agreement and proposed notice to the class members and lodges a proposed order. (Cal. Rules of Court, rule 3.769(c).) After a preliminary settlement hearing, the Court makes “an order approving or denying certification of a provisional settlement class….” (Cal. Rules of Court, rule 3.769(d).) If the Court grants preliminary approval of the settlement, the Court’s order must include “the time, date, and place of the final approval hearing; the notice to be given to the class; and any other matters deemed necessary for the proper conduct of a settlement hearing.” (Cal. Rules of Court, rule 3.769(e).)

As the present motion includes a copy of the Agreement and the Class Notice, and Plaintiff has lodged a proposed order, the motion is procedurally appropriate.

To protect the rights of class members including the named Plaintiff, the Court must determine if the proposed class action settlement is fair, adequate, and reasonable. (Dunk v. Ford Motor Co. (1996) 48 Cal.App.4th 1794, 1800-1801.) The Court considers relevant factors including “the strength of [Plaintiff’s] case, the risk, expense, complexity and likely duration of further litigation, the risk of maintaining class action status through trial, the amount offered in settlement, the extent of discovery completed and the stage of the proceedings, the experience and views of counsel, the presence of a governmental participant, and the reaction of the class members to the proposed settlement.” (Id. at p. 1801.) The Court’s inquiry is limited “ ‘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.’ [Citation.]” (Ibid.)

As to settlements of claims brought under PAGA, “while PAGA does not require the trial Court to act as a fiduciary for aggrieved employees,” the Court applies the same factors and standards of review to evaluate the fairness of a PAGA settlement. (Moniz v. Adecco USA, Inc. (2021) 72 Cal.App.5th 56, 76-77 (Moniz); Lab. Code, § 2699.) The Court’s review and approval of a PAGA settlement acts as a “safeguard” to ensure the negotiated resolution is fair and protects the interests of the public and the LWDA in maximizing the enforcement of state labor laws in consideration of PAGA’s purposes and policies. (Moniz, supra, 72 Cal.App.5th at pp. 76-77.) Factors useful in evaluating the fairness of a PAGA settlement include “the strength of the Plaintiff’s case, the risk, the stage of the proceeding, the complexity and likely duration of further litigation, and the settlement amount….” (Id. at p. 77.)

A copy of the proposed settlement must be provided to the LWDA at the same time it is submitted to the Court. (Lab. Code, § 2699, subd. (l)(2).) Available information demonstrates that Plaintiff submitted the Agreement to the LWDA on February 11, 2025, prior to filing the present motion. (Solouki Decl., ¶ 48 & Exh. D.) There is no information to suggest or demonstrate that the LWDA has indicated its objection to the Agreement or an intent to intervene.

Though the present motion appears procedurally compliant for all reasons discussed above, there is presently insufficient information to permit the Court to determine that the Agreement is in all respects fair, reasonable, adequate and in the best interests of the Class Members or Aggrieved Employees.

By way of example, Plaintiff presents evidence showing that the maximum exposure of Westerlay LP to damages for the violations alleged in the complaint on behalf of the Class and the Aggrieved Employees, totals approximately $3.4 million. Plaintiff also presents evidence showing that that Westerlay LP’s maximum exposure to penalties under PAGA is approximately $1.3 million. (Solouki Decl., ¶ 13.) In addition, and as noted above, Plaintiff contends that there exists a 60 percent likelihood of obtaining class certification and of prevailing at trial. (Solouki Decl., ¶ 15.) Though the percentages presented by Plaintiff suggest a relatively significant probability of success with respect to class certification and prevailing at trial, the GSA which, as noted above, requires Westerlay LP to pay the amount of $200,000 to settle all of the claims alleged in this action, reflects only 6 percent of Plaintiff’s expert’s valuation of the maximum exposure of Westerlay LP to damages and penalties.

It is also unclear to the Court whether the valuation described in paragraph 13 of the Solouki declaration accounts for probabilities of success in achieving class certification and prevailing at trial described above. To the extent the valuation set forth in the Solouki declaration includes downward adjustments to account for these risks, it is also unclear, for all reasons described herein, what additional or other risks, if any, warrant additional adjustments to Plaintiff’s expert valuation.

To demonstrate why the GSA to be paid to the Class Members and Aggrieved Employees, and the Agreement, is reasonable, adequate, and fair, Solouki provides overly conclusory information regarding general risks and uncertainties involved in litigation and the general nature of trial. The risks and uncertainties described by Solouki do not appear to be qualitatively different from the risks and uncertainties generally present in every case.

The information provided by Solouki appears also, at times, contradictory. For example, Solouki describes interviews which purportedly revealed that a “vast majority” of the Class Members “rarely received” a rest break. (Solouki Decl., ¶ 28.) Solouki also contends that he and Plaintiff remain “confident” of the merits of Plaintiff’s claims. (Solouki Decl., ¶ 13.) Notwithstanding these representations, Solouki also asserts in a conclusory fashion that damages attributable to rest break claims will be hard to certify and difficult to prove, without explaining why these damages will be hard to certify or prove considering that information revealed in the Class Data provided by Westerlay LP allowed Plaintiff to identify witnesses and to prepare an expert valuation of damages and penalties. (See, e.g., Solouki Decl., ¶ 16.) For these and all further reasons discussed above, the Court is presently unable to determine whether the Agreement is fair, adequate, or reasonable, or to reach a reasoned judgment that it is not the product of overreaching or collusion between the parties. (In re Microsoft I-V Cases (2006) 135 Cal.App.4th 706, 723.)

Further, after deducting from the GSA the amounts described above, the NSA available for distribution to the Class Members totals $89,150. ($200,000-66,000-20,000-9,850-15,000=$89,150.) Though Solouki cites nonspecific uncertainties in proving the wages due to each Class Member and general risks of litigation, Plaintiff’s expert valuation of the maximum damages and penalties to which Westerlay LP may be exposed appears to be based on information and evidence derived from the Class Data provided by Westerlay LP as well as interviews conducted by Plaintiff. The general and conclusory information offered by Solouki with respect to purported difficulties in proving any violations by Westerlay LP is insufficient to show why a settlement which is over $3 million lower than Plaintiff’s valuation of Westerlay LP’s maximum exposure to damages and penalties is fair, adequate, or reasonable to the Class Members.

The same analysis and reasoning apply with respect to the PAGA penalties to be paid by Westerlay LP pursuant to the Agreement. By way of example, though Plaintiff presents evidence showing that Westerlay LP’s maximum exposure to civil penalties under PAGA is valued at $1.3 million (Solouki Decl., ¶ 13), the Agreement provides for a payment of PAGA Penalties by Westerlay LP in the amount of $15,000, without a sufficient explanation showing why this amount is fair in consideration of PAGA’s purposes and policies.

The examples provided herein are intended to be illustrative but not exhaustive. Though the Court recognizes that the Agreement, including the GSA, may be fair, reasonable, and adequate in light of risks and uncertainties which may be present in this litigation, the Court is, for all reasons discussed above, unable to determine from the present record whether the settlement described in the Agreement is fair, adequate, or reasonable, or to reach a reasoned judgment that the Agreement is not the product of overreaching or collusion between the parties. Therefore, the Court will continue the hearing on the motion to permit Plaintiff an opportunity to submit supplemental briefing addressing the issues discussed herein. The supplemental briefing may be presented in a declaration executed by Plaintiff’s counsel, and must include information sufficient to show why the Agreement, including the GSA to be paid by Westerlay LP, is in all respects fair, adequate, and reasonable, and not the product of overreaching, fraud, or collusion.”

The supplemental Solouki declaration:

On May 28, 2025, Plaintiff submitted a supplemental declaration of Solouki, in which Solouki states that the maximum potential valuation calculated by Plaintiff’s expert is not a realistic exposure, and that underlying assumptions were generously calculated to determine a maximum exposure prior to applying reductions based on various risk factors. (Suppl. Solouki Decl., ¶ 4.)

Citing the recent decision in Naranjo v. Spectrum Security Services, Inc. (2022) 13 Cal.5th 93, Solouki explains that any penalties associated with the violations of the Labor Code alleged in this action may be reduced or eliminated to the extent Westerlay LP can show that it acted in good faith. (Suppl. Solouki Decl., ¶¶ 5-6.) Solouki also explains that, at the mediation, Westerlay LP asserted various defenses including: that it maintained and enforced compliant and detailed meal period and rest break policies and policies prohibiting off-the-clock work; that employees signed acknowledgement forms confirming their understanding and receipt of these policies; that its employees sign voluntary meal period waiver forms for first and second meal periods; that there exists evidence showing that employees were choosing to work through, cut short, or take late meal breaks rather than being forced to do so; that the issue of whether its employees took meal and rest breaks during compliant time frames and were relieved of all duties are questions that can only be resolved by resorting to individualized inquiries; that certification for noncompliant rest breaks will be difficult since rest breaks are not recorded; that “production employees” earn discretionary bonuses such that the regular rate of pay is properly calculated and paid; that time records from October 2019 through July 2022 reveal overall meal period compliance rate of 98 percent for shifts over 6 hours; that Westerlay LP uses an electronic time system and maintains electronic time records; that employees track their time to the exact minute; that Westerlay LP has no knowledge of employees working off-the-clock; that the evidence will show that to the extent employees complained about not being compensated for all hours worked, Westerlay LP would immediately attempt to rectify the issue; that there exists no evidence of any knowing and intentional violation on any wage statement; that any failure to pay wages in a timely manner was an honest mistake, and that there is no prior finding of any violations by Westerlay LP by either the Labor Commissioner or the Court.

(Id. at ¶ 6.)

Solouki asserts that the defenses asserted by Westerlay LP and described above may give rise to a finding by the Court that Westerlay LP acted in good faith, resulting in an award no penalties, and a reduction in Westerlay LP’s total exposure $1,385,835.33. (Suppl. Solouki Decl., ¶¶ 6-7.) Solouki further contends that there exists a significant risk that the Court will not certify the rest break claims because rest breaks are not recorded and cannot be analyzed by Plaintiff’s expert, which would further reduce Westerlay LP’s total exposure to $834,053.58. (Id. at ¶ 8.)

Based on Plaintiff’s counsel’s extensive experience litigating wage and hour class actions, Solouki estimates a 40 percent likelihood of obtaining and maintaining certification of Plaintiff’s meal period and overtime claims, reducing the value of these class claims $500,432.15, and that Solouki’s office estimates that there exists a 40 percent chance that Plaintiff will prevail at trial on her individual and class claims, further reducing the value of these claims to $300,259.29. (Suppl. Solouki Decl., ¶ 10.) For these reasons, Solouki asserts, the GSA, which as noted above totals $200,000, represents approximately 66 percent of the total damages exposure without penalties and without certification of the rest break claim. (Ibid.)

In valuing the reasonableness of the Agreement, Solouki also accounted for what Solouki describes as “legally compliant and detailed meal period and rest break policies and policies prohibiting off-the-clock work” produced by Westerlay LP prior to the mediation, that Westerlay LP used waiver forms, and that the overall meal period compliance rate appeared to be 98 percent for shifts over 6 hours. (Suppl. Solouki Decl., ¶¶ 13-14.) Plaintiff also recognizes the expense and difficulties in proving the wages due to each individual Class Member, which would require Class Counsel to gather declarations to demonstrate any improper practices, which may be offset by evidence revealing Westerlay LP’s compliance with its wage and hour obligations. (Id. at ¶ ¶ 15.)

Solouki further asserts that the NSA is estimated to be $92,900, and that assuming full participation of the approximately 500 individuals who qualify as Class Members, Solouki estimates that each Class Member will recover on average approximately $179.02, which Solouki contends is far from insignificant considering that most Class Members will never pursue their individual claims. (Suppl. Solouki Decl., ¶ 21.) Solouki also notes that the putative class members will be allowed to assess the fairness of this settlement when they receive the Class Notice, and either object to or exclude themselves from the settlement. (Id. at ¶ ¶ 22.)

As to the allocation of $15,000 to PAGA penalties, Solouki notes that these penalties are discretionary and subject to significant reduction, and that Westerlay LP maintained that it would be unjust to award maximum PAGA penalties given the current state of the law concerning these penalties and stacking. (Suppl. Solouki Decl., ¶ 23.) Plaintiff also recognized that the allegations underlying the PAGA claim were duplicative of the statutory claims. (Ibid.)

Analysis

Noted in the Court’s Minute Order set forth above, which is incorporated here, the motion is procedurally appropriate. There is also no information to suggest or demonstrate that the LWDA has indicated its objection to the Agreement or an intent to intervene in this proceeding.

Code of Civil Procedure section 382 authorizes class actions “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, one or more may sue or defend for the benefit of all.” (Code Civ. Proc., § 382.) “Class certification requires proof (1) of a sufficiently numerous, ascertainable class, (2) of a well-defined community of interest, and (3) that certification will provide substantial benefits to litigants and the Courts, i.e., that proceeding as a class is superior to other methods. [Citation.]” (Fireside Bank v. Superior Court (2007) 40 Cal.4th 1069, 1089.)

To determine whether a class is ascertainable, the Court examines “(1) the class definition, (2) the size of the class, and (3) the means available for identifying class members. [Citation.]” (Reyes v. San Diego County Bd. of Supervisors (1987) 196 Cal.App.3d 1263, 1271.) “A related inquiry is manageability of the proposed class[.]” (Global Minerals & Metals Corp. v. Superior Court (2003) 113 Cal.App.4th 836, 849.) “The community of interest requirement embodies three factors: (1) predominant common questions of law or fact; (2) class representatives with claims or defenses typical of the class; and (3) class representatives who can adequately represent the class.” (Richmond v. Dart Industries, Inc. (1981) 29 Cal.3d 462, 470.) “The burden is on the party seeking certification to establish the existence of both an ascertainable class and a well-defined community of interest among the class members.” (Washington Mutual Bank, FA v. Superior Court (2001) 24 Cal.4th 906, 913.)

“Because a Court evaluating certification of a class action that settled prior to certification is considering certification only in the context of settlement, the Court's evaluation of the certification issues is somewhat different from its consideration of certification issues when the class action has not yet settled. In some ways, the Court’s review of certification of a settlement-only class is lessened; as no trial is anticipated in a settlement-only class case, ‘the case management issues inherent in the ascertainable class determination need not be confronted.’ [Citation.] However, other certification issues, ‘those designed to protect absentees by blocking unwarranted or overbroad class definitions’ require heightened scrutiny in the settlement-only class context ‘for a Court asked to certify a settlement class will lack the opportunity, present when a case is litigated, to adjust the class, informed by the proceedings as they unfold.’ [Citation.]” (Luckey v. Superior Court (2014) 228 Cal.App.4th 81, 93-94.) To protect absent class members whose rights may not have been considered by the settling parties, and to ensure the absence of fraud and collusion, heightened scrutiny is required if there has been no adversary certification. (Ibid.)

Information appearing in the supporting memorandum and declarations shows that the Class Members consist of approximately 500 individuals who were subject to the same purported violations and unlawful policies or practices alleged in this action, which Plaintiff contends were applied to all employees who are members of the proposed class. (See Solouki Decl., ¶ 23) Plaintiff has presented evidence that there exists a numerous, ascertainable class with a well-defined community of interest, and who were subject to meal and rest break violations, and unlawful employment policies and practices with respect to payment of wages, the furnishing of accurate wage statements, and other matters alleged by Plaintiff in the FACC. There also appears to be sufficient and reliable means available to identify the Class Members from Westerlay LP’s records. In addition, the Class Representative appears to have claims typical of, and appears to be able to adequately represent, the proposed class. Based on the above, there appears to be reasonable support for provisional certification of the settlement class.

As further discussed in the Minute Order set forth above, the Court must determine if the proposed class action settlement is fair, adequate, and reasonable, by considering various factors including the strength of Plaintiff’s case, the risks and expense of further litigation and of maintaining class action status through trial, the settlement amount, and the experience and views of counsel, and “ ‘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.’ [Citation.]”  (Dunk v. Ford Motor Co. (1996) 48 Cal.App.4th 1794, 1800-1801 (Dunk).)

A class action settlement is presumptively fair if “(1) the settlement is reached through arm's-length bargaining; (2) investigation and discovery are sufficient to allow counsel and the Court to act intelligently; (3) counsel is experienced in similar litigation; and (4) the percentage of objectors is small.” (Dunk, supra, 48 Cal.App.4th at p. 1802.) “Public policy generally favors the compromise of complex class action litigation.” (In re Microsoft I-V Cases (2006) 135 Cal.App.4th 706, 723, fn. 14.)

In addition, and as further discussed in the Minute Order set forth above, the Court applies the same factors and standards of review to evaluate and determine the fairness of a settlement under PAGA. (Moniz v. Adecco USA, Inc. (2021) 72 Cal.App.5th 56, 76-77; Lab. Code, § 2699.)

Available evidence and information are sufficient to show that Plaintiff engaged in informal investigation and discovery to which Westerlay LP responded and provided relevant data and records. Plaintiff has presented sufficient evidence and information, as further discussed above, regarding the approximate amount of the payments to be issued to Class Members and Aggrieved Employees. In evaluating the adequacy of the Agreement, Plaintiff’s counsel also accounted for potential difficulties associated with achieving class certification and prevailing on the merits of Plaintiff’s claims in this action, in particular with regard to whether Westerlay LP had an objectively reasonable and good faith belief that it provided compliant meal and rest breaks, whether employees signed meal period waiver forms or voluntarily chose to work through meal breaks, whether employees’ rates of pay were correctly calculated, and whether Westerlay LP had knowledge that employees were working off-the-clock. (Supp. Solouki Decl., ¶ 6.)

The Agreement is the product of an arms-length mediation and the parties’ subsequent negotiations with the assistance of mediator LaMothe. (Solouki Decl., ¶¶ 9-10.) For all reasons discussed above, Plaintiff has now presented sufficient evidence of the risks and uncertainty associated with continued litigation of this matter, including as to the defenses asserted by Westerlay LP, and the potential difficulties in certifying the class. These risks appear to be substantial.

Information appearing in the Solouki declaration also shows that Plaintiff’s counsel has substantial experience with wage and hour and PAGA matters. (Souloki Decl., ¶¶ 37-40.) Class Counsel believes that the Agreement is fair, adequate, and reasonable. Based on the information discussed above, the evidence presented in the moving papers as further described above, and information appearing in the supplemental Solouki declaration, it appears to the Court that the Agreement is fair, adequate, and reasonable, and in the best interests of the Class Members and Aggrieved Employees, in light of known facts and circumstances. The evidence does not suggest that the settlement agreement is the product of collusion.

The Court has reviewed the proposed Class Notice, which will be provided to the Class Members in English, with a Spanish translation without material variation. (Solouki Decl., Exh. A, Agreement Exh. A [Class Notice].) The Class Notice is easy to understand, apprises Class Members of the pendency of and the claims and defenses asserted in the present action, explains the rights and obligations of the Class Members in connection with the proposed Agreement, and notifies Class Members of their right and opportunity to opt out or present objections to the Agreement. For these reasons, the Court finds that the Class Notice complies with due process. (Martorana v. Marlin & Saltzman (2009) 175 Cal.App.4th 685, 694-695.)

The Class Released Claims further described above are limited to claims or causes of action arising during the Class Period, and that were alleged or reasonably could have been alleged in the FACC or ascertained during the course of this proceeding. Except as set forth in the “Release by Participating Class Members” appearing in the Agreement, the Class Members do not release any other claims. (Solouki Decl., Exh. A, ¶ 5.2.)

Based on the evidence presented, including matters set forth in the supplemental Solouki declaration discussed above, the Court finds that the Agreement is in all respects fair, reasonable, adequate and in the best interests of the putative class. The Court further finds that the notice plan set forth in the Agreement constitutes sufficient notice to the Class Members of the present action and the terms of the Agreement, as well as the date and location of the final settlement hearing.

For all reasons discussed above, the Court determines that the Agreement is entitled to preliminary approval, that the settlement class should be provisionally certified, that Plaintiff’s counsel should be appointed as counsel for the settlement class, that Plaintiff should be appointed as class representative for settlement purposes, that Phoenix should be appointed as the settlement administrator, and that the notice to the class and settlement administration deadlines should be approved as set forth in the motion. Accordingly, the motion for preliminary approval of class action settlement will be granted.

The Court will determine the reasonableness of attorney’s fees and costs, the incentive award, and the administrative expenses upon noticed motion at the final settlement hearing. Counsel shall appear at the hearing of the motion and shall be prepared to discuss scheduling for the final settlement hearing and any other matters remaining at this time.