Kelly v. Aramark Services

Background

Lawrence Kelly brought a putative class action and representative action under California’s Private Attorneys General Act against Aramark Services, Inc. Kelly alleged that Aramark deprived him and other Aramark workers of wages and legally required meal and rest breaks. The court considered Kelly’s motion for preliminary approval of a class-action and PAGA settlement.

The proposed settlement class covers people employed by Aramark in California in hourly or non-exempt positions in the Refreshments line of business from March 1, 2018, through February 10, 2024, excluding people whose hours were regulated by specified federal or California transportation regulations. The class was estimated to include 97 people.

Settlement Terms

The settlement provides a gross amount of $95,000. That amount includes a $5,000 PAGA payment, $23,750 in attorney’s fees, up to $5,000 in litigation costs, up to $7,500 in settlement-administration costs, and a $5,000 service award for Kelly. After the listed expenses, the estimated net settlement amount is $48,750, with each estimated class member receiving an equal share of approximately $502.58. Aramark will also pay the employer’s share of payroll taxes on the portions of payments allocated as unpaid wages.

Of the $5,000 PAGA payment, $3,750 will go to the California Labor and Workforce Development Agency and $1,250 will go to PAGA members. Kelly’s supplemental filing stated that the maximum PAGA recovery was $7,500, based on an estimated five PAGA members and 75 total PAGA pay periods. The court found the proposed PAGA allocation to be within a reasonable recovery range. Kelly will release all claims under PAGA as part of the settlement.

Conditional Class Certification

Before approving a settlement reached before class certification, the court first considered whether certification was appropriate. The court found that the proposed class satisfied Federal Rule of Civil Procedure 23(a)’s requirements of numerosity, commonality, typicality, and adequacy of representation. The court also found that the class satisfied Rule 23(b)(3), because common questions about Aramark’s wage, meal-break, and rest-break policies predominated and a class action was the superior method for resolving the dispute.

The court therefore conditionally certified the class for settlement purposes under Rule 23(b)(3). It appointed Kelly as class representative and Shaun Setareh of Setareh Law Group as class counsel.

Preliminary Fairness Review

The court found, at the preliminary stage, that the settlement was fundamentally fair, adequate, and reasonable. It found that Kelly and class counsel adequately represented the class, the settlement was negotiated at arm’s length, the relief was adequate, and class members would be treated equitably. The court considered the risks of continued litigation, including risks relating to class certification, proving liability, and recovering certain wage penalties. It also compared the proposed payments with payments in another wage-and-hour settlement.

The court noted that the settlement agreement allowed class counsel to seek up to one-third of the gross settlement amount, but counsel had agreed to seek 25 percent, or $23,750. The court deferred deciding the exact amount of attorney’s fees until final approval. The court also found no reversion provision returning unawarded fees to Aramark and no separate arrangement requiring Aramark to pay attorney’s fees outside the settlement fund.

Notice and Further Proceedings

The court approved the text of the class notice subject to one modification. The notice must state the deadline for filing a notice of intent to appear at the final approval hearing and must explain that anyone seeking to appear virtually must make that request in the notice. The notice will be sent by first-class mail and email, and the administrator will use skip tracing to locate people whose notices are returned as undeliverable.

The court appointed ILYM Group, Inc. as settlement administrator. The administrator must distribute notice no later than January 9, 2026. Class members and PAGA members have 45 days after notice is distributed to opt out, object, or challenge their estimated payment amounts, following the procedures in the class notice. Kelly’s motion for attorney’s fees, costs, and his service award must be filed by April 10, 2026. Anyone wishing to speak at the final approval hearing must file a notice of intent to appear by April 17, 2026.

The court set the final approval hearing for June 11, 2026, at 2:00 p.m. in San Francisco. The order granted the motion for preliminary approval but did not grant final approval of the settlement.