Rodriguez v. BELFOR USA Group, Inc.

Background

Richard Rodriguez asserted claims under the Fair Labor Standards Act (FLSA), California’s Private Attorneys General Act (PAGA), and other California labor laws on behalf of himself and other similarly situated employees against BELFOR USA Group, Inc., BELFOR Environmental, Inc., Oakwood Construction and Restoration Services, Inc., and 1 800 Water Damage North America, LLC. The court had previously denied Rodriguez’s motion for preliminary approval of an earlier settlement without prejudice. After further negotiations, the parties submitted an amended settlement, which the defendants did not oppose.

Settlement structure

The amended agreement establishes three employee groups:

- A California class covering people employed by the defendants in California in non-exempt positions from February 25, 2018, through the date of preliminary approval. Rodriguez estimated 1,034 members. - An FLSA collective covering people employed by the defendants in the United States in non-exempt positions from February 25, 2019, through the date of preliminary approval. Rodriguez estimated 4,349 members. Unlike the California class, FLSA collective members must affirmatively opt in to participate. - PAGA members covering people employed by the defendants in California in non-exempt positions from March 8, 2021, through the date of preliminary approval. Rodriguez estimated 697 members, all of whom were also members of the California class.

The gross settlement amount is $1,622,000 and is non-reverting. The agreement allocates approximately $799,500 to the California class’s net settlement fund, $250,000 to the FLSA settlement fund, and $200,000 to the PAGA settlement. Of the PAGA amount, $150,000 will be paid to the California Labor and Workforce Development Agency and $50,000 will be distributed to PAGA members. The agreement also permits a request for up to $300,000 in attorneys’ fees and up to $30,000 in costs, estimates administration costs at $32,500, and permits Rodriguez to seek a $10,000 enhancement payment. The court reserved decisions on the attorneys’ fees, costs, and enhancement payment for later motions.

California class members who do not opt out will receive payments based on the number of weeks they worked during the class period and will release claims asserted or reasonably related to the facts in the lawsuit. FLSA collective members who opt in will receive payments based on weeks worked and will release related FLSA claims. PAGA members cannot opt out of or object to the PAGA portion of the settlement. Uncashed checks after 180 days will result in remaining funds being donated to Worksafe.

Court’s analysis

For the California class, the court relied in part on its earlier finding that the class faced meaningful risks on both the claims and class certification. The court found that the amended agreement supplied additional information about expected individual payments and the parties’ estimate of realistic recovery. Although the proposed $799,500 net settlement was approximately 9% of estimated maximum damages, the court found it closer to 70% of the estimated realistic recovery and concluded that the amount was fair and reasonable for preliminary approval.

The court also found that the parties had adequately explained the allocation among the California class, FLSA collective, and PAGA members. The court did not treat the proposed $10,000 enhancement payment as a barrier because Rodriguez would later need to file a formal motion supporting that payment. The court likewise found no indication of collusion and noted that the possible attorneys’ fee request had been reduced to $300,000, or a maximum of 18% of the gross settlement amount. The revised California notice addressed the court’s earlier concerns by explaining that class members might also belong to the FLSA collective and by noting that a Spanish version would be available.

For the FLSA collective, the court found the $250,000 allocation sufficiently supported for preliminary approval. Rodriguez’s counsel calculated a lower, more realistic potential recovery by accounting for an estimated 14% opt-in rate and then discounting that amount for litigation risks. The court also accepted, at this stage, counsel’s explanation for excluding liquidated damages from the maximum-recovery calculation. The revised FLSA opt-in form stated that a person opting in also consented to magistrate-judge jurisdiction, and the court approved adding information about the Spanish translation to the notice.

For the PAGA settlement, the court found that Rodriguez had adequately addressed its earlier concerns about the estimated penalty amount and the basis for reducing potential penalties. The court noted that the $200,000 PAGA settlement was about 10% of the revised realistic exposure estimate and evaluated it together with the California class settlement. The court concluded that the PAGA settlement was adequate for preliminary approval.

Order and next steps

The court granted Rodriguez’s motion for preliminary approval in its entirety. It conditionally certified the California class and FLSA collective for settlement purposes only; approved the PAGA settlement; approved the proposed class and FLSA notices, including the agreed Spanish-translation modification; directed mailing of the notices; appointed Rodriguez as settlement-class representative; appointed Capstone Law APC as class counsel; and appointed CPT Group, Inc. as settlement administrator.

The order set deadlines for distributing notices, requesting exclusion, disputing payment calculations, objecting, opting into the FLSA settlement, filing motions for attorneys’ fees and the enhancement payment, and seeking final approval. It scheduled the final-approval hearing for October 7, 2025, at 10:00 a.m. The order granted preliminary approval only and did not make the settlement final.