Sales v. United Road Services, Inc.

Background

The named plaintiffs brought a class action against United Road Services, Inc. (URS), alleging violations of California labor laws and California’s unfair competition law. The plaintiffs alleged that URS drivers were employees rather than independent contractors and therefore were entitled to employee protections, including minimum wages and reimbursement of business expenses.

The certified class covered individuals who signed Independent Contractor Service Agreements with URS, were assigned to a California business unit, and drove in California from November 18, 2015, through March 29, 2022. The certified claims included alleged failures to reimburse business expenses, pay statutory minimum wages, provide compliant wage statements, pay wages due at termination, and comply with California’s unfair competition law. The settlement also released specified claims under California’s Private Attorneys General Act (PAGA), which allows recovery of certain civil penalties for labor-law violations.

The parties mediated and later signed a written settlement agreement. The court had previously granted preliminary approval. Notice was mailed and emailed to class members in English and Spanish. The opinion states that 24 class members continued to object to the settlement and that no class members opted out.

Settlement Terms

URS agreed to pay a gross settlement amount of $7,500,000. The fund would cover class-member payments, court-approved attorney’s fees and litigation costs, settlement-administration costs, and the required 75% share of the PAGA payment to the California Labor and Workforce Development Agency.

The agreement allocated $126,325 to PAGA civil penalties. Of that amount, $94,743.75 would go to the Labor and Workforce Development Agency, and $31,581.25 would be distributed among eligible individuals. The proposed net settlement amount available for distribution was $5,460,354.40. Payments would generally be calculated on a pro rata basis using the number of weeks class members worked during the relevant period.

Court’s Analysis

The court applied Federal Rule of Civil Procedure 23, which requires approval of a certified-class settlement and requires the court to determine whether the settlement is fair, adequate, and reasonable. The court found that the notice procedures were sufficient, that the new class representatives were adequate, and that the settlement reasonably addressed the risks and uncertainties of continued litigation.

The court considered the plaintiffs’ acknowledged litigation risks, including URS’s continuing dispute over whether the drivers were employees and URS’s position that drivers received enhanced compensation covering work-related expenses. The court also found that the parties had conducted enough discovery to make an informed settlement decision, that the allocation method treated class members equitably, and that the settlement amount was reasonable in light of the risks. The court overruled the objections and concluded that they did not undermine the settlement’s fairness, adequacy, or reasonableness.

Attorney’s Fees and Costs

The court approved class counsel’s request for $1,875,000 in attorney’s fees, equal to 25% of the $7,500,000 settlement fund. It also approved $27,320.60 in litigation costs and $11,000 in settlement-administration costs. The court found the requested fees reasonable after considering counsel’s 1,925.8 hours of work, hourly rates ranging from $450 to $900, and a lodestar multiplier of 1.4.

Disposition and Further Requirements

The court granted the motion for final approval of the class action settlement. It also granted the motion for attorney’s fees, litigation costs, and the settlement-administrator award. The parties and administrator were directed to implement the order and settlement agreement. Class counsel must file a post-distribution accounting within 21 days after distributing the settlement funds. The court will withhold 10% of the approved attorney’s fees until that accounting is filed and the remaining fees are released by further order.