Tentative Ruling: Jesus Garcia vs The Towbes Group Inc et al
Case Number
25CV02583
Case Type
Hearing Date / Time
Fri, 10/09/2026 - 10:00
Nature of Proceedings
CMC; Motion: Preliminary Approval of Class Action Settlement - Unopposed
Tentative Ruling
For the reasons stated herein, the unopposed 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.
Background:
The operative first amended complaint (FAC) of plaintiff Jesus Garcia (Plaintiff) alleges that, from August 2022 to approximately January 2025, Plaintiff worked as an hourly, non-exempt Property Maintenance Worker for The Towbes Group, Inc., and Michael Towbes Construction & Development, Inc., (collectively, Defendants). During Plaintiff’s employment, Defendants allegedly failed to pay Plaintiff for all hours worked including minimum and overtime wages; failed to authorize or permit Plaintiff to take uninterrupted rest and meal periods; required Plaintiff to work “off-the-clock” without compensation; failed to maintain accurate records of the hours Plaintiff worked; required Plaintiff to pay expenses incurred in direct discharge of Plaintiffs’ duties without reimbursement; failed to pay all wages at the conclusion of Plaintiffs’ employment; failed to pay Plaintiffs’ final paycheck immediately upon termination; and failed to furnish Plaintiff with accurate, itemized wage statements, among other things.
On September 22, 2025, with leave of court, Plaintiff filed their FAC against Defendants, asserting nine causes of action: (1) failure to pay minimum wages for all hours worked; (2) failure to pay overtime wages; (3) failure to provide meal periods; (4) failure to authorize and permit rest periods; (5) failure to indemnify necessary business expenses; (6) failure to pay wages of discharged employees – waiting time penalties; (7) failure to provide and maintain accurate and compliant wage records; (8) violation of Business and Professions Code section 17200 et seq.; (9) civil penalties under the Labor Code Private Attorneys General Act of 2004, codified as Labor Code section 2698 et seq. (PAGA).
Plaintiff brings the FAC individually and on behalf of a proposed class of all persons who worked for Defendants in California as an hourly, nonexempt employee at any time during the period beginning four years before the filing of Plaintiff’s initial complaint in this action on April 25, 2025, and ending when notice of class certification is sent to that class of persons. (FAC, ¶ 25.)
On October 22, Defendants filed an answer to the FAC, generally denying its allegations and asserting forty-five affirmative defenses.
On August 5, 2026, Plaintiff filed an unopposed motion for an order preliminarily approving a proposed class action and PAGA settlement, the settlement class, the appointment of Plaintiff as the representative of the class, the appointment of the Sentinel Firm, APC, as counsel for the class, and the appointment of Phoenix Class Action Administration (Phoenix) as the settlement administrator; approving and directing distribution of notice to the settlement class; and setting a final approval hearing.
The motion is supported by a declaration of Plaintiff’s counsel, Tiffany Hyun (attorney Hyun). Attached to that declaration is a “Joint Stipulation Of Class Action And PAGA Settlement And Release” (the Settlement). The Settlement defines the term “Class Members” as all current or former hourly-paid or non-exempt employees of Defendants who worked within the State of California at any time from April 25, 2021, through March 11, 2026, (the Class Period). (Hyun Dec., exhibit 1 at pp. 2-3, ¶¶ 4, 6, 9.) The “Settlement Class” and “Settlement Class Members” include those Class Members who do not “opt out” pursuant to the terms of the Settlement, and the “PAGA Members” include all current or former hourly-paid or non-exempt employees of Defendants who worked within the State of California at any time from April 25, 2024, through March 11, 2026, (the PAGA Period). (Hyun Dec., exhibit 1, ¶¶ 6, 20, 23, 24, & 57(d).)
Pursuant to the Settlement, Defendants have agreed to compromise the disputed claims in this case for the amount of $350,000 (the Gross Settlement Amount or GSA) plus employer-side taxes. (Hyun Dec., exhibit 1, ¶¶ 14, 15, 44, 51(h)(ii), 59(d)(ii).) The parties have agreed, subject to the court’s approval, that the GSA will be apportioned as follows: no more than 35 percent of the GSA or $122,500 will be paid to The Sentinel Firm, APC, as “Class Counsel”; an amount not to exceed $25,000 will be paid to Class Counsel for litigation costs which appear to include “unclaimed attorneys’ fees”; an amount up to $7,000 will be paid for fees and costs to administer the Settlement; an amount not to exceed $7,500 will be paid to Plaintiff as an “Enhancement Award”; and the amount of $30,000 will be designated to resolve claims brought under PAGA, of which 65 percent or $19,500 will be paid to the California Labor & Workforce Development Agency (the LWDA), and $10,500 will be paid to the PAGA Members. (Hyun Dec., exhibit 1, ¶¶ 3, 51(a)-(e).)
The amount remaining after deducting the payments described above is the Net Settlement Amount or “NSA” from which payments to each Settlement Class Member will be made. (Hyun Dec., exhibit 1, ¶¶ 18, 51(f), 56(h), 57(a).) The amount of those payments will equal the individual number of calendar workweeks credited to each Class Member during the Class Period, or to each PAGA Member during the PAGA Period (the Workweeks Worked) multiplied by the amount yielded from dividing the NSA by the total of all Workweeks Worked (the Workweek Rate). (Hyun Dec., exhibit 1, ¶¶ 38, 39, 51(h).) The NSA will be divided by the total Workweeks Worked by all Settlement Class Members during the Class Period as reflected in Defendants’ records. (Hyun Dec., exhibit 1, ¶ 51(h)(i).)
The payments to be made to the PAGA Members ($10,500) will be divided by the total number of workweeks credited to all PAGA Members. (Hyun Dec., exhibit 1, ¶ 25.) The respective workweeks credited to each PAGA Member during the PAGA Period (the PAGA Workweeks Worked) will be multiplied by the “PAGA” Workweek Rate. (Hyun Dec., exhibit 1, ¶¶ 25-26, 51(e)(ii).)
The settlement payments described above will be paid as a “net” amount after tax withholdings have been deducted. (Hyun Dec., exhibit 1, ¶ 53.) The parties agree that 40 percent of each payment will be allocated to wages, 40 percent will be considered penalties, and 20 percent will be allocated to interest and any other non-wage related amount, if any, and reported as such. (Hyun Dec., exhibit 1, ¶¶ 53(a).) The payments made to the PAGA Members will be designated as penalties. (Ibid.)
The Settlement includes releases by Plaintiff, the Settlement Class Members, and the PAGA Members. (Hyun Dec., exhibit 1, ¶¶ 29, 32, 33, 49, 50.)
The Settlement includes a “Discretionary Escalator Clause” or “Cap” pursuant to which Defendants estimate that the workweeks of the Settlement Class Members total 16,400 through December 11, 2025. (Hyun Dec., exhibit 1, ¶ 51(g).) If the actual number of workweeks for Settlement Class Members exceeds 16,400 by more than 10 percent (or 18,040 workweeks), then Defendants shall elect either to increase the GSA on a pro rata basis for the workweeks above 10 percent, or to end the Class Period and PAGA Period on the date that the number of Workweeks worked by Class Members reaches 18,040. (Ibid.) Defendants shall inform Plaintiff no later than April 10, 2026, whether that clause was triggered and if so, their election. (Ibid.) The administrator of the Settlement shall be responsible for making a final determination of whether that clause was triggered. (Ibid.)
The parties have selected Phoenix to serve as the “Settlement Administrator”, to distribute the “Notice of Proposed Class Action Settlement” (the Class Notice) attached to the Settlement, and to administer the Settlement and tax reporting as further described above. (Hyun Dec., exhibit 1, ¶¶ 5, 55(a), exhibit 4.)
By the deadline stated in the Settlement, Defendants will provide the Settlement Administrator with a list that identifies each Class Member and PAGA Member’s Social Security number, last known address, Workweeks Worked, and PAGA Workweeks Worked. (Hyun Dec., exhibit 1, ¶ 55(b).) Before mailing the Class Notice, the Settlement Administrator will update the address for each Class Member and PAGA Member using the National Change of Address database and other available resources deemed suitable and, to the extent that process yields a different address from the one supplied by Defendants, that address shall replace the address supplied by Defendants. (Hyun Dec., exhibit 1, ¶ 56(a).) Within 7 days of receiving the information described above from Defendants, the Settlement Administrator will send the Class Notice to each Class Member and PAGA Member by first class mail, in English and Spanish. (Hyun Dec., exhibit 1, ¶¶ 5, 56(b).)
If a Class Notice is returned with a forwarding address or if a Class Member or PAGA Member personally provides the Settlement Administrator with an updated address, the Settlement Administrator will re-mail the Class Notice to that forwarding or updated address. (Hyun Dec., exhibit 1, ¶ 56(d)(i).) In the event that the first mailing of the Class Notice to any Class Member or PAGA Member is returned without a forwarding address, the Settlement Administrator will immediately perform a skip trace using social security numbers provided by Defendants and the National Change of Address database, as needed, to verify the accuracy of the addresses provided. (Hyun Dec., exhibit 1, ¶ 56(d)(ii).)
The Settlement Administrator will conduct any necessary second mailing of the Class Notice within an agreed number of days. (Hyun Dec., exhibit 1, ¶ 56(d)(ii).) If no new information is ascertained by means of a skip trace, or if the Class Notice is returned after using an address obtained from a standard skip trace, the Settlement Administrator will immediately perform a manual, in-depth skip trace to locate a more recent or accurate address. (Ibid.) If an updated address is identified by this method, the Settlement Administrator will resend the Class Notice to that address within three days. (Ibid.)
The Class Members will have 60 days from the mailing of the Class Notice to mail a writing, with a “Request for Exclusion” form, indicating that member’s intention to be excluded from the class portion of the Settlement (the Opt Out Request); or a written objection to the Settlement in the form specified. (Hyun Dec., exhibit 1, ¶¶ 11 [defining “Exclusion Period”], 19, 20, 56(c), 58.) Settlement Class Members may also appear at the final approval hearing to object to the Settlement. (Hyun Dec., exhibit 1, ¶ 58.) The Settlement Administrator must submit any Opt Out Request or objection to the parties, and Class Counsel will submit them to the court. (Hyun Dec., exhibit 1, ¶ 56(c).) An Opt Out Request does not apply to the PAGA claims and will not exclude a PAGA Member from the release of those claims. (Ibid.)
Class Members will have the right to challenge their allocated number of Workweeks Worked pursuant to the procedure set forth in the Settlement, which requires that Class Member to send, within 60 days of the initial mailing of the Class Notice, a challenge to the Settlement Administrator at the address listed on the Class Notice. (Hyun Dec., exhibit 1, ¶¶ 57(c).) A Class Member challenging the number of Workweeks Worked may also submit documentary evidence to prove the number of Workweeks Worked during the Class Period. (Ibid.) Defendants shall have the right to respond to a challenge by any Settlement Class Member. (Ibid.) The Settlement Administrator will inform the parties’ counsel in writing of any timely filed challenges to Workweeks Worked, and will determine all such disputes after consulting with the parties. (Ibid.)
Within 7 days after resolving all challenges made by Settlement Class Members, the Settlement Administrator will provide the parties with a report showing the calculation of the payments to be made to Settlement Class Members and PAGA Members. (Hyun Dec., exhibit 1, ¶ 56(h).) After reviewing comments from counsel, the Settlement Administrator will finalize its calculation of the settlement payments and PAGA payments and provide the parties’ counsel with a final report listing the amount of all payments to be made from the NSA to each Settlement Class Member, and the amount of all payments to be made to each PAGA Member from the amount allocated for PAGA penalties. (Ibid.)
In support of the motion, attorney Hyun states that on April 25, 2026, the same day Plaintiff filed their initial complaint in this action, Plaintiff submitted a letter to the LWDA alleging various violations of the Labor Code. (Hyun Dec., ¶ 5 & exhibit 2.) After the filing of the complaint, the parties engaged in informal discovery during which attorney Hyun requested and received class data that included the number of Class Members and “Aggrieved Employees”, the total Workweeks Worked by the Class Members during the Class Period, the total PAGA pay periods, applicable meal and rest period policies and practices, time keeping policies and practices, applicable expense reimbursement policies and practices, and other documents relevant to the litigation. (Hyun Dec., ¶ 6.) Attorney Hyun asserts that Defendants produced hundreds of pages of relevant documents, including a sampling of the time sheets and payroll records for the putative class. (Ibid.)
On December 11, 2025, the parties participated in a full-day mediation with Eve Wagner, who attorney Hyun describes as having excellent skills and experience in wage-and-hour class actions such as this case. (Hyun Dec., ¶ 8.) After contentious and lengthy negotiations, the parties accepted a mediator’s proposal of $350,000 to settle all claims, and thereafter negotiated the Settlement. (Ibid.)
Attorney Hyun states that the risks associated with this litigation include significant delay in the receipt of any funds by the Class Members, Defendants declaring bankruptcy; a contested class certification process; defenses asserted by Defendants which include that individualized issues will make class certification inappropriate or that Defendants properly classified employees as exempt from meal or rest breaks and overtime; the possibility that Defendants will obtain releases from putative class members; the potential for the court to reduce PAGA penalties; the signing of arbitration agreements by Defendants’ employees; and numerous potential but undefined appellate issues. (Hyun Dec., ¶ 11.)
The data points upon which attorney Hyun relied in analyzing the potential exposure of Defendants include the class size of 191 individuals; the number of workweeks worked by the Class Members during the Class Period which totals 16,400; the number of separated employees which totals 90 individuals; the number of Aggrieved Employees which total 108 individuals who worked 2,623 PAGA pay periods; and an average regular pay rate of $28.02 per hour. (Hyun Dec., ¶ 12.) According to attorney Hyun, the basis of the minimum wage and overtime wage claims in this case is that Defendants are alleged to have given the putative class members a heavy workload but discouraged the recording of unauthorized overtime; that most of the tasks were required to be completed within regular business hours; and that, as a result, Plaintiff and the putative class members worked during their rest and meal periods to complete their job duties. (Hyun Dec., ¶¶ 12-13.)
Attorney Hyun asserts that the determination of Defendants’ reasonable exposure to the class for the “off-the-clock” allegations is inherently difficult because that determination implicates work that was not recorded. (Hyun Dec., ¶ 14.) According to attorney Hyun, approximately 56 percent of shifts were recorded as 8 hours, and Defendants did not permit Plaintiff and the putative class to clock into their shifts until they arrived at the location. (Ibid.) To determine Defendants’ reasonable exposure to the class for the off-the-clock allegations, Plaintiff’s counsel assumed that employees were required to work approximately fifteen-minutes off-the-clock each day, or 7.5 minutes for each shift. (Ibid.) That assumption is based on conversations with Plaintiff and an investigation into the nature and extent of the alleged “off-the-clock” work. (Ibid.)
Attorney Hyun states that, assuming each employee worked 7.5 minutes “off-the-clock” before and after each shift or 15 minutes per day, it is reasonable to estimate that Defendants’ employees were entitled to 75 minutes of unpaid wages each week. (Hyun Dec., ¶ 15.) Defendants’ exposure for those claims assumes that each employee would be owed $35.02 for each workweek based on an hourly rate of $28.02. (Ibid.) Plaintiff’s Counsel calculated the maximum reasonable exposure for settlement purposes to be $574,328 ($35.02 x 16,400 workweeks). (Ibid.) Attorney Hyun asserts that, if this work were compensated at the overtime rate, the maximum reasonable exposure would be $717,910. (Ibid.)
Attorney Hyun also explains that Plaintiff’s claim for unpaid overtime is premised on the fact that at certain times, off-the-clock work should have been compensated at an overtime rate. (Hyun Dec., ¶ 16.) Defendants’ pay records demonstrated that, for the majority of the Class Period, Defendants paid an overtime rate where an entitlement to overtime was reflected in those records. (Ibid.) There was no independent value attributed for recorded work not paid at an overtime rate. (Ibid.)
Attorney Hyun asserts that it is impossible to discern from the records alone the exact amount of off-the clock work that each employee performed, and that these questions could create individualized issues inappropriate for class certification and would require significant evidence from the Class Members to establish. (Hyun Dec., ¶ 17.) Further, Defendants’ written policies do not specifically require off-the-clock work. (Ibid.) Considering these matters, Plaintiff’s counsel significantly discounted the calculated exposure based on the risk of non-certification and the risk of unsuccessfully proving the merits of the claim and damages. (Ibid.)
Plaintiff also alleges in this case that the Class Members routinely did not receive lawful and compliant meal periods; were not paid meal period premiums when a meal period was missed, short, or delayed; and that Defendants’ written meal and rest break policies do not comply with California law. (Hyun Dec., ¶ 18.) Attorney Hyun explains that the range of any claim for failing to provide a legally mandated meal or rest period, providing a short or interrupted meal or rest period, or failing to provide a timely meal or rest period depends on the number of meal periods that Class Members were denied because of Defendants’ policies. (Ibid.) Determining the actual meal periods at issue presented significant logistical and evidentiary difficulties because the records showed that Defendants often failed to accurately record the start and end of the meal periods. (Ibid.) To analyze Defendants’ liability, Plaintiff’s counsel reviewed time records, engaged in conversations with Plaintiff to determine the nature and extent of the violations, and conducted investigations into Defendants’ policies and procedures. (Hyun Dec., ¶ 19.)
Plaintiff’s analysis of a sample of time records revealed that approximately 25.7 percent of pay periods evidenced at least one type of meal period violation. (Hyun Dec., ¶ 19.) For this reason, Plaintiff’s counsel assumed that employees were subject to one meal period violation for every week the employees worked. (Ibid.) At the average hourly rate of $28.02, this results in approximately $459,528 in potential meal period premiums. (Ibid.) The risks in asserting that claim include significant proof issues because Defendants contend that time records are insufficient to demonstrate that a break was not taken or constituted a violation, and because liability does not arise from recordkeeping but instead from the failure to provide a legally compliant meal period. (Hyun Dec., ¶ 20.) Defendants also contend that its policies regarding meal periods were legally compliant and that to the extent the records show meal period violations, many of these were the result of employee choice. (Ibid.) Considering these defenses, Plaintiff’s counsel discounted the calculated exposure for meal period violations. (Ibid.)
As to Plaintiff’s contention that Defendants’ policies resulted in a failure to relinquish all control over non-exempt employees during their rest breaks, attorney Hyun states that rest period premiums are “trickier” to determine because employers are not legally required to track paid rest periods. (Hyun Dec., ¶ 21.) To analyze Defendants’ liability, Plaintiff’s counsel reviewed time records, engaged in conversations with Plaintiff to determine the nature and extent of the violations, and conducted investigations into Defendants’ policies and procedures. (Ibid.) In reaching the Settlement, Plaintiff’s counsel estimated that each Class Member did not receive a compliant rest break at the same rate that they were denied a meal period. (Ibid.) Applying an average hourly rate of $27.59, this results in approximately $504,897 in potential rest period premiums. (Ibid.)
Attorney Hyun asserts that, because there are unique risks to the rest period claims including that there is no evidence to prove a missed rest period, that Defendants contend that they maintained legally compliant rest period policies during the Class Period, and that Plaintiff will not be able to obtain class-wide certification of this claim based on these written and implemented policies, among other things, Plaintiff’s counsel elected to further discount this claim for the purposes of settlement based on the risks of not obtaining certification and of not prevailing on the merits. (Hyun Dec., ¶ 22.)
As to the cause of action for violation of Labor Code section 2802 based on a purported failure by Defendants to reimburse necessary business expenses, attorney Hyun states it was difficult to determine based on the records alone how often Defendants either required Class Members to use their own tools, or at what rate they should be compensated for any such use. (Hyun Dec., ¶ 23.) According to attorney Hyun, a reasonable percentage would depend on the nature of the work being performed and how often employees were required to use their personal devices or equipment. (Hyun Dec., ¶ 24.) Based on the nature of Defendants’ business, attorney Hyun asserts that it is unlikely that employees’ usage of their mobile devices would constitute a large part of their job duties or consume a large amount of usage. (Ibid.)
For the reasons described above, Plaintiff’s counsel assumed that a rate of $10 per month was appropriate as a baseline for determining Defendants’ exposure for employees’ usage of personal tools and cellular devices. (Hyun Dec., ¶ 24.) Assuming that employees were entitled to $2.50 per workweek for reimbursable expenses, this amount totals $45,750. (Ibid.) The risks relevant to this claim include that Defendants contend that they did not require employees to use their own devices and that to the extent that Class Members were otherwise incurred reimbursable expenses, Defendants were never asked to make any reimbursements. (Ibid.) The use of personal tools by Defendants’ employees could also require significant individual inquiry which might render that claim unsuitable for class treatment. (Ibid.) In light of these issues, Plaintiff’s counsel discounted the calculated exposure for that claim. (Ibid.)
As to the claims arising from purportedly inaccurate wage statements, attorney Hyun states that proving actual damages for each employee on a class-wide basis is unlikely, and that this claim would likely be subject to a one-year statutory period. (Hyun Dec., ¶ 25.) Attorney Hyun asserts that the Class Members worked 2,623 pay periods during the PAGA period; that there were 108 employees during that period; that the first 108 such pay periods would incur a $50 penalty, or $5,400; and that the remaining 2,515 pay periods would incur a $100 penalty, or $251,500, for a total settlement exposure of $256,900. (Ibid.) The hurdles to obtaining class certification and damages as to that claim asserted by attorney Hyun include that the claims are largely derivative of and reliant upon proof of the underlying violations; that Defendants contend that any failure to include information on wage statements was an inadvertent or isolated mistake and that they reasonably and in good faith believed that they were issuing complete and accurate wage statements; and that the statements are not missing any information other than premiums or the disputed and unrecorded work. (Hyun Dec., ¶ 26.) For these reasons, Plaintiff’s counsel adjusted the value of this claim based on those risks and asserted defenses. (Ibid.)
The class list provided to Plaintiff shows that there are 90 employees who are separated from employment. (Hyun Dec., ¶ 27.) Based on an hourly rate of $28.02, attorney Hyun calculated a potential exposure for waiting time penalties of $6,724.80 per employee, for a maximum recoverable amount of $605,232. (Hyun Dec., ¶ 27.) Attorney Hyun asserts that Plaintiff would need to establish not only the underlying violations addressed above and that the wages were paid late, but also that Defendants’ failure to timely pay such wages was willful. (Ibid.) According to attorney Hyun, even if the calculation described above is accurate and provable, it is not certain that wages would be calculated on an 8 hours per day basis as many employees did not work that many hours each day. (Ibid.) For these reasons, Plaintiff’s counsel used the figures described above as a “baseline” and considered the defenses asserted to each claim to determine Defendants’ potential exposure for the purposes of settlement. (Ibid.)
Attorney Hyun asserts that there are 2,623 pay periods in the PAGA Period, and that, assuming that “stacking” or the imposition of multiple or derivative penalties per pay period applies and that the court will use a violation rate of $100 per pay period, the potential PAGA penalties total $262,300. (Hyun Dec., ¶ 28.) Plaintiff’s counsel used this figure as a baseline for determining potential liability given the presence of the direct wage claims. (Ibid.) Because the claims under PAGA are predicated on the violations described above, attorney Hyun asserts that they are subject to the same disputes, defenses, and discounts. (Ibid.)
Analysis:
“A settlement or compromise of an entire class action, or of a cause of action in a class action, or as to a party, requires the approval of the court after hearing.” (Cal. Rules of Court, rule 3.769(a).) “Any party to a settlement agreement may serve and file a written notice of motion for preliminary approval of the settlement. The settlement agreement and proposed notice to class members must be filed with the motion, and the proposed order must be lodged with the motion.” (Cal. Rules of Court, rule 3.769(c).)
Plaintiff has filed a copy of the Settlement and the proposed Class Notice, and lodged a proposed order with the court. For these reasons, the court finds that the motion is procedurally appropriate.
As to the cause of action for civil penalties under PAGA, a “a file-stamped copy of the complaint that includes the case number assigned by the court” and the “proposed settlement” must be provided to the LWDA within the time prescribed under PAGA. (Lab. Code, § 2699, subd. (s)(1), (2).) Information and evidence appearing in the record indicates or suggests that Plaintiff submitted to the LWDA a file-stamped copy of the complaint within 10 days following the commencement of this action, and a copy of the Settlement on August 5, 2026. (Hyun Dec., exhibits 2, 3.) There is no information which shows or suggests that the LWDA has indicated any objection to the Settlement or an intent to intervene in this action.
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 (Luckey).) 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).)
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, supra, 228 Cal.App.4th at pp. 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.)
As further discussed above, the present record shows that the putative class consists of approximately 191 individuals which Plaintiff ascertained through data provided to Plaintiff by Defendants. The available information is also sufficient to show that those 191 individuals were subject to the purported violations and unlawful policies or practices alleged in the FAC. Based on Plaintiff’s analysis of the claims and defenses asserted in this matter as further described above, it appears to the court that the policies and practices at issue were applied to all employees who are members of the putative class.
Plaintiff has presented evidence of a numerous, ascertainable class with a well-defined community of interest consisting of at approximately 191 employees of Defendants 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 purported practices. There also appears to be sufficient and reliable means available to identify the members of the putative class from the records of Defendants.
In support of the motion, Plaintiff states their belief that they had a similar experience with Defendants compared to the other Class Members because Plaintiff and those individuals were all subjected to the same policies and practices; and because Plaintiff observed that others seemed to be subject to the same pay issues to which Plaintiff was subjected. (Garcia Dec., ¶ 4.) Plaintiff is not aware of anything that would raise unique defenses to Plaintiff’s claims as opposed to the claims of the other Class Members, and asserts that Plaintiff’s claims are based upon the same facts that relate to the rest of the putative class. (Ibid.)
Plaintiff further states that they have learned about the laws relating to the minimum wage, overtime, and meal and rest break issues in this action. (Garcia Dec., ¶ 6.) Plaintiff knows of no conflicts between their interests and goals and those of any other Class Member. (Garcia Dec., ¶ 7.) For these and all further reasons discussed above, the available information and evidence is sufficient to show that Plaintiff appears to have claims typical of the class and to be able to adequately represent the class.
Furthermore, and notwithstanding whether the Settlement purports to release claims outside the limitations period of Plaintiff’s own claims, the class definitions do not, on their face, appear overbroad. (See, e.g., Amaro v. Anaheim Arena Management, LLC (2021) 69 Cal.App.5th 521, 541–542 (Amaro) [discussing release of PAGA claims outside limitations period].) Based on the above, there appears to be reasonable support for provisional certification of a settlement class.
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 (Dunk).) 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.)
“[A] presumption of fairness exists where: (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.)
Also relevant here, “while PAGA does not require the trial court to act as a fiduciary for aggrieved employees, adoption of a standard of review for settlements that prevents ‘ “ ‘ “fraud, collusion or unfairness” ’ ” ’ [citation], and protects the interests of the public and the LWDA in the enforcement of state labor laws is warranted. Because many of the factors used to evaluate class action settlements bear on a settlement’s fairness—including 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—these factors can be useful in evaluating the fairness of a PAGA settlement.” (Moniz v. Adecco USA, Inc. (2021) 72 Cal.App.5th 56, 77.)
The available information and evidence shows that Plaintiff engaged in informal investigations and discovery to which Defendants have responded by providing the relevant data and records described in attorney Hyun’s declaration. Attorney Hyun states that, based on the figures described above, thee average payment to be made to each Class Member and PAGA Member is approximately $882.20. (Hyun Dec., ¶ 34.) To evaluate the adequacy of the GSA and the Settlement, Plaintiff’s counsel has ostensibly accounted for potential difficulties associated with achieving class certification and prevailing on the merits of the claims asserted by Plaintiff in the FAC, in particular with regard to whether Defendants properly classified their employees; whether Defendants’ employees signed arbitration agreements; whether Defendants’ written policies specifically require “off-the-clock” work; whether employees chose to skip meal periods despite being instructed to do so; whether the evidence shows any missed rest periods; whether Defendants were asked to reimburse employees for the use of personal devices; and whether Defendants held a good faith belief in the accuracy of their wage statements at issue, among other factors. (See Hyun Dec., ¶¶ 11, 17, 20, 22, 24, 26.)
It also appears from the undisputed present record that the Settlement is the product of arm’s-length, “contentious”, and “lengthy” negotiations which included a mediation during which the mediator made a mediator’s proposal. (Hyun Dec., ¶¶ 8-9.) Noted above, Plaintiff has presented evidence of the risks of uncertainty associated with litigation with respect to the defenses asserted by Defendants and potential difficulties in certifying the class. These risks appear to be substantial.
The Settlement includes a release by the Settlement Class Members, including the PAGA Members, of “Settled Claims” and “Settled PAGA Claims” against “any and all Released Parties”. (Hyun Dec., exhibit 1, ¶¶ 48 & 49.) “Releases must be appropriately tethered to the complaint’s factual allegations.… Requiring a reasonable connection prevents the release from extending to claims that are only remotely related to the allegations in the complaint.” (Amaro, supra, 69 Cal.App.5th at p. 538 [discussing scope of releases in context of a class action].)
Though the “Settled Claims” and “Settled PAGA Claims” appear appropriately limited to those claims, allegations, and assertions that were alleged or reasonably could have been alleged based on the facts, allegations, assertions, and claims in the operative pleading and the letter sent to the LWDA on April 25, 2025, (Hyun dec., exhibit 1, ¶¶ 32 & 33), the definition of “Released Parties” appears overbroad. For example, that term includes, without explanation, past, present, and unidentified “insurers”, “owners”, “shareholders”, “agents”, “attorneys”, and “servants”, and other persons or entities who may have separately employed a Settlement Class Member or PAGA Member. (Hyun Dec., exhibit 1, ¶ 29.)
Notwithstanding concerns in regard to the broad definition of “Released Parties” described above, the court understands the releases contained in the Settlement, which include a release of other persons or entities apart from Defendants, to relate only to liability which may attach by virtue of a Settlement Class Member or PAGA Member’s employment with Defendants, and not from any claims that may arise from any separate employment or relationships those members have or may have had with the Released Parties. The court also understands the release by the Settlement Class Members and PAGA Members to be limited to claims based on or reasonably arising from the facts alleged in this action and within the scope of the allegations of the FAC only, including as to those facts which give rise to Plaintiff’s claim for penalties under PAGA. (See Amaro, supra, 69 Cal.App.5th at p. 538 [general discussion].)
To the extent any party contends that the court’s understanding of the scope of the releases contained in the Settlement, as stated herein, is incorrect, that party shall appear at the hearing on the motion to identify this issue, and to explain why the court’s understanding is incorrect and the intent of those releases.
Based on the information provided in attorney Hyun’s declaration, counsel for Plaintiff appears to have substantial experience with wage, hour, and PAGA matters. (Hyun Dec., ¶ 32.) Attorney Hyun believes that the Settlement is fair, adequate, and reasonable. Based on the above and the evidence presented in the moving papers, it appears to the court that the Settlement is fair, adequate, and reasonable, and in the best interests of the class in light of known facts and circumstances. There is no evidence to suggest that the Settlement is the product of collusion.
The court has reviewed the proposed Class Notice, which is easy to understand, apprises the Class Members including the PAGA Members of the pendency of and the claims and defenses asserted in the present action, explains the rights and obligations of those members in connection with the proposed settlement, and notifies each member of their right and opportunity to opt out or present objections to the settlement agreement. For these reasons, the court finds that, for present purposes, the Class Notice complies with due process. (Martorana v. Marlin & Saltzman (2009) 175 Cal.App.4th 685, 694-695.)
The Settlement also provides that, to the extent a Settlement Class Member does not cash their check within 180 days of mailing, that check will become void and a stop payment will be placed on the uncashed check. (Hyun Dec., exhibit 1, ¶ 63.) Further, settlement checks that are not cashed within 180 days of mailing will be distributed pursuant to the State Controller Unclaimed Property Fund, “or as otherwise directed by California Code of Civil Procedure section 384 and as ordered by the Court.” (Ibid.) The Settlement also states “if the remaining funds are not able to be distributed to the State Controller Unclaimed Property Fund and if a cy pres fund is required, ... the [Settlement Administrator] shall forward the entire amount of any amounts remaining from uncashed checks, plus any interest that has accrued thereon, to CASA (Court Appointed Special Advocates ...).” (Ibid.)
The motion provides no information or reasoned argument showing why the proposed cy pres distribution of unpaid residue is appropriate. The court interprets the provisions of the Settlement in that regard to require Plaintiff to show, before any cy pres distribution is made, that the recipient of the distribution satisfies the terms of Code of Civil Procedure section 384, which the court will determine at an appropriate time.
Based on the information and evidence presented in the motion, the court finds that the Settlement 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 Settlement constitutes sufficient notice to the class members of the present action and the terms of the Settlement as well as the date and location of the final settlement hearing. Therefore, the court determines that the Settlement 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 court will grant Plaintiff’s motion for preliminary approval of the Settlement.
The court has reviewed the proposed order lodged by Plaintiff and intends to sign it. Further, the court will determine the reasonableness of attorney’s fees and costs, the Enhancement Award, and any administrative expenses upon noticed motion at the final settlement hearing. Counsel shall appear at the hearing of the present motion and be prepared to discuss scheduling for the final settlement hearing and any other matters remaining at this time. The parties are further requested to note that the court will require any final report to include reasoned factual and legal argument showing why any cy pres distribution of unpaid residue is appropriate and authorized under Code of Civil Procedure section 384.