Phillips v. C&K Market

Background

Eric Allen Phillips brought a class action against C&K Market, Inc., doing business as Smart Shop and Ray’s Food Place. He alleged that Defendants failed to pay overtime for off-the-clock work, failed to pay minimum wages, failed to provide meal and rest breaks or the required compensation, issued inaccurate wage statements, failed to pay all wages at termination, failed to reimburse business expenses, failed to pay reporting-time pay and sick pay, and unlawfully deducted wages. He also alleged that these practices violated California’s Unfair Competition Law and supported penalties under the Private Attorneys General Act, a California law allowing certain employment-law penalty claims to be pursued on behalf of the state.

Phillips filed the original class complaint in Alameda County Superior Court on September 30, 2024. Defendants removed the case to this court on February 21, 2025, and Phillips filed a first amended complaint on June 20, 2025, adding the Private Attorneys General Act claim. After informal discovery and arm’s-length negotiations, the parties agreed to a settlement. Defendants continued to deny all allegations and maintained that they had lawful wage-and-hour policies and procedures. They did not oppose the settlement motion but reserved their rights and defenses in the litigation.

Conditional Class Certification

For settlement purposes, the court conditionally certified a class under Federal Rule of Civil Procedure 23(b)(3). The class consists of current and former hourly-paid employees who worked for Defendants in California during the period stated in the order. The court found that the class included approximately 1,094 members identified through Defendants’ records.

The court found the requirements for class certification satisfied at this preliminary stage. It found common legal and factual questions concerning the alleged wage-and-hour practices, that Phillips’s claims were typical of the class, and that he and his counsel could adequately represent the class. The court also found that common issues predominated over individual issues and that a class action was superior because it would provide economies of scale, conserve judicial resources, and avoid repetitive proceedings and inconsistent results. The court appointed Phillips as class representative and Kevin Lipeles of Lipeles Law Group, APC, as class counsel.

Preliminary Settlement Approval

The court preliminarily approved the $750,000 total settlement amount. It found on a preliminary basis that the agreement fell within the range of reasonable settlements, appeared to result from non-collusive, arm’s-length negotiations, and was fair and reasonable when compared with the potential outcome, risks, delay, and costs of continued litigation.

The court relied in part on the parties’ informal discovery, including data showing a meal-break compliance rate above 90 percent and ten sworn employee declarations concerning meal breaks, rest breaks, off-the-clock work, and reimbursement claims. The court stated that this information supported Defendants’ position concerning compliance and helped explain why the settlement amount was proportionately low compared with the value of the claims initially asserted.

The court did not at that time approve Phillips’s proposed $20,000 class-representative enhancement award or the requested attorneys’ fees of 35 percent of the settlement fund, stated as $262,500, plus $13,500 in costs. The court noted that the requested percentage exceeded the typical 25 percent benchmark in the circuit. The court allowed counsel to file a fee-and-cost motion for consideration at the final fairness hearing.

Notice and Settlement Schedule

The court approved the long-form and short-form class notices, subject to requiring the $750,000 settlement figure and the sentence stating that the average estimated amount per class member was $372.00 to appear in bold on the short-form notice. It found that mailing and emailing the notices to identified class members at their last-known addresses satisfied due-process and Rule 23 notice requirements. The court also approved Phoenix Class Action Administration Solutions as settlement administrator and administration costs of no more than $14,500, to be paid from the settlement fund.

The order established deadlines for mailing and re-mailing notices, requesting exclusion from the class, objecting to the settlement, disputing workweek information, funding the settlement, and making payments. It also set a final approval and fairness hearing for March 19, 2026, at 1:30 p.m. in Courtroom 5. Class members may object or appear at that hearing if they comply with the order’s filing and service requirements.

Disposition

The court granted preliminary approval of the class settlement, conditionally certified the settlement class, appointed the class representative and class counsel, approved the class notice subject to the stated revision, approved the settlement administrator and administration-cost limit, and granted Phillips’s motion to set a final fairness hearing. The court did not approve the enhancement award or attorneys’ fees and costs at this stage; it reserved those matters for the final approval hearing.