De Leon v. Ricoh USA, Inc.

Background

Augusto De Leon brought a class and representative action against Ricoh USA, Inc., Ricoh Americas Corporation, and IKON Office Solutions, Inc. He alleged California wage-and-hour violations, including claims involving minimum and overtime wages, meal and rest periods, expense reimbursement, sick leave, wage statements, recordkeeping, unfair business practices, and civil penalties under California’s Private Attorneys General Act. He also alleged violations of the Fair Labor Standards Act, the federal wage law commonly called the FLSA.

De Leon worked for Ricoh in California from approximately May 2000 through November 2017 as a field service representative and technology service technician. The case was removed from California state court to federal court under the Class Action Fairness Act. After discovery and a full-day private mediation, the parties reached a settlement in principle and submitted a motion for preliminary approval.

Proposed Settlement

The proposed settlement class included current and former hourly, non-exempt Ricoh employees who worked in California in technology service technician, field support representative, or similar positions from May 22, 2014, through the date of preliminary approval. The proposed FLSA collective covered the same types of workers for the period beginning May 22, 2015, through the date of preliminary approval. Approximately 900 people were in the proposed settlement class, and approximately 700 were in the proposed FLSA collective.

Ricoh agreed to pay a non-reversionary gross settlement amount of $2.2 million. The agreement allocated $55,000 for participating FLSA collective members, $75,000 to the California Labor and Workforce Development Agency for civil penalties under the Private Attorneys General Act, $10,000 to De Leon as a service award, $733,333.33 to class counsel for attorney fees, $15,000 to class counsel for costs, and $35,000 to the claims administrator. The estimated net settlement amount for class members was approximately $1,276,666.67.

Class members who did not exclude themselves would generally receive a pro rata share based on the number of workweeks they worked during the class period. Eligible workers could opt into the FLSA collective by cashing their FLSA settlement checks. The settlement also described how unclaimed funds would be distributed, including a possible second distribution to participating class members and, in some circumstances, a distribution to the East Bay Community Law Center’s Community Economic Justice Clinic.

Conditional Certification

For settlement purposes, the court found that the proposed class met the requirements of Federal Rule of Civil Procedure 23. The court found sufficient numerosity, commonality, typicality, and adequacy of representation. It also found that common questions about Ricoh’s compensation, break, expense-reimbursement, sick-leave, wage-statement, and recordkeeping policies predominated over individual questions and that a class action was the superior method for resolving the dispute.

The court separately conditionally certified the FLSA collective. At this preliminary stage, the court found a reasonable basis to conclude that De Leon and the proposed collective members were similarly situated because they allegedly were subject to the same wage-and-hour policies. FLSA collective members would have to affirmatively opt in; they would not become participants merely by failing to exclude themselves.

Preliminary Settlement Approval

The court concluded that the proposed settlement appeared to result from serious, informed, and non-collusive negotiations. Discovery included written requests, policy and training documents, time and payroll records, witness interviews, and sample employee records and wage statements. The parties also participated in mediation with an experienced private mediator.

The court found no obvious deficiency that would prevent preliminary approval. It deferred deciding whether the $10,000 service award was appropriate because that amount was higher than awards typically approved in the circuit. The court also deferred final decisions on attorney fees and costs, requiring class counsel to submit billing records and an itemized cost summary.

The court found that the proposed $2.2 million settlement fell within the range of possible approval at the preliminary stage. Counsel estimated Ricoh’s potential exposure at approximately $20,285,268.80 and represented that the gross settlement was approximately 10.85 percent of the monetary relief sought. The court emphasized that this was only a preliminary evaluation and that a full fairness analysis would occur at the final approval hearing.

Notice Corrections and Deadlines

The court found the notice plan adequate but required two corrections before mailing. First, the notice had to change the estimated net settlement amount from $1,281,666.67 to $1,276,666.67 to reflect the additional $5,000 allocated to the claims administrator. Second, the instruction for people seeking exclusion had to say that they were requesting to be “excluded,” rather than “included,” from the settlement class.

The order required the corrected notice to be mailed by December 19, 2019. Class members had 45 days after the initial mailing, and no later than February 2, 2020, to request exclusion or object to the settlement. Class counsel’s attorney-fee and cost motion and De Leon’s final-approval motion were due February 20, 2020. The court set the final approval hearing for March 26, 2020.

Disposition

The court GRANTED preliminary approval of the class and collective action settlement. It appointed the Clark Law Group and United Employees Law Group as class counsel, conditionally certified the settlement class and FLSA collective, approved the notice plan subject to the stated corrections, and set the schedule for final approval. The order did not finally approve the settlement or finally award attorney fees, costs, or the service award.