Maciel v. M.A.C. Cosmetics Inc.

Background

The plaintiffs alleged that M.A.C. failed to compensate employees for time and expenses related to its dress code. The court also described the central class question as whether M.A.C. had a policy of failing to include all qualifying wages in the regular rate used to calculate overtime pay.

The proposed settlement class consisted of people employed by M.A.C. in California as hourly paid, non-exempt employees from April 27, 2018, through July 24, 2025. The settlement provided for a $12 million gross payment. It also contemplated a request for attorneys’ fees of up to 35 percent of that amount, costs capped at $150,000, $20,000 payments to each of the two class representatives, $300,000 for the Workforce Development Agency, and $75,000 for distribution among class members who worked during the PAGA period. The settlement stated that no money would return to M.A.C.

Conditional Class Certification

Before evaluating the settlement, the court considered whether the proposed class could be conditionally certified for settlement purposes. It found that the requirements of Federal Rule of Civil Procedure 23 were met:

- Numerosity: The class included 5,282 people, making individual joinder impracticable. - Commonality: The legality of M.A.C.’s overtime-pay policies presented a question common to the class. - Typicality: Maciel and Torres held the same positions as class members, challenged the same policy, and alleged underpayment under the same legal theory. - Adequacy: The court found no conflicts among the representatives, their lawyers, and the class. The representatives provided information and documents, identified witnesses, and assisted with investigation, discovery, mediation, certification, and settlement. - Predominance and superiority: Common questions about M.A.C.’s personnel and payroll policies predominated, and a class action was a superior method for resolving the dispute.

The court therefore conditionally certified the class under Rule 23(b)(3), solely for settlement purposes, and appointed Maciel and Torres as class representatives. It appointed Righetti Glugoski, P.C. and Nathan & Associates, APC as class counsel.

Preliminary Settlement Review

Under Rule 23(e), a court must determine at the preliminary stage whether a class settlement is fundamentally fair, adequate, and reasonable. The court found that the proposed settlement met that preliminary standard.

The court found that the representatives and class counsel had adequately represented the class and that the settlement appeared to have been negotiated at arm’s length. It noted that the settlement was reached with the assistance of a mediator and that there was no reverter clause returning unawarded funds to M.A.C. Although M.A.C. agreed not to oppose a request for fees and costs, those amounts would come from the settlement fund rather than being paid separately by M.A.C.

The court found the $12 million settlement to be within the range of reasonableness in light of the estimated potential exposure, comparable settlements, and the risks, costs, and delay of continued litigation. It also found the proposed distribution method adequate and the pro rata allocation equitable because payments would be based directly on each class member’s number of workweeks during the class period.

The court nevertheless cautioned that class counsel had not yet justified the requested attorneys’ fees. The court noted that 25 percent is the usual benchmark under the percentage-of-recovery method, while the settlement allowed a request of up to 35 percent. It also noted that counsel had not provided enough evidence supporting certain billing rates and lodestar amounts. Because fees would be decided at the final hearing, the court did not deny preliminary approval on that basis.

The court also found that Maciel and Torres had not justified $20,000 incentive payments for each representative. It did not approve those payments at that point and stated that it was unlikely to award the requested amounts at the final hearing without additional evidence.

Notice and Further Proceedings

The court approved the proposed notice, finding that it adequately explained the settlement, class members’ rights, the process for objecting and receiving payment, and the final-approval hearing. Notice was to be sent by first-class mail, with searches for updated addresses for returned notices. The court appointed ILYM Group, Inc. as settlement administrator.

The court ordered the parties to submit proposed deadlines for distributing class data, mailing notice, submitting exclusions and objections, filing motions for final approval and for fees and costs, and holding the final hearing. The order granted the motion for preliminary approval but did not finally approve the settlement, attorneys’ fees, costs, or class-representative awards.