Foster v. Advantage Sales & Marketing, LLC.

Background

Wilma Foster filed an overtime and wage lawsuit against Advantage Sales & Marketing, LLC, doing business as Advantage Solutions. She brought a nationwide collective action under the Fair Labor Standards Act (FLSA) and a California class action under Federal Rule of Civil Procedure 23. The plaintiffs alleged that Advantage misclassified Customer Development Managers-Retail as exempt and therefore failed to pay required compensation under federal and California law. The first amended complaint added a claim under California’s Private Attorneys General Act, and Adam Thimons and Kimberly Schmidt were later added as named plaintiffs.

Advantage reclassified the Customer Development Managers-Retail from exempt to non-exempt shortly after the original complaint was filed. The parties exchanged information, participated in settlement discussions and a settlement conference, and finalized their agreement on November 7, 2019. The plaintiffs then sought preliminary approval of the settlement and permission to file their second amended complaint.

Proposed Settlement

The proposed California class included people who worked for Advantage as Customer Development Managers-Retail in California during any workweek from January 1, 2017, through December 31, 2018, while classified as exempt. The proposed FLSA collective included eligible Customer Development Managers-Retail who worked outside California during that period, excluding California class members. The opinion identified 59 California class members and 261 non-California opt-in eligible plaintiffs.

The total settlement amount was $1.2 million. The agreement allocated $734,000 as the net settlement amount, including $362,000 for California plaintiffs and $372,000 for non-California plaintiffs. It also provided $10,000 for the Private Attorneys General Act claim, $10,000 for Foster’s service award, $3,000 each for Thimons and Schmidt, up to $400,000 in attorney fees, up to $20,000 in litigation costs, and up to $20,000 in settlement-administration costs. Payments were generally based on each person’s share of the total workweeks.

California class members could exclude themselves by sending an opt-out letter. Non-California employees would opt into the FLSA settlement by cashing their checks within 180 days. The proposed release was limited to claims based on the facts alleged or claims that could have been brought based on those facts, although the three named plaintiffs would receive a general release.

Court’s Analysis and Rulings

The court found federal-question jurisdiction over the FLSA claims and supplemental jurisdiction over the state-law claims. For settlement purposes only, it preliminarily found that the California class met Rule 23’s requirements concerning sufficient numbers, common issues, typical claims, adequate representation, predominance of common questions, and superiority of a class action. It conditionally certified that class for settlement, notice, and a final approval hearing. The court also preliminarily authorized the FLSA collective for settlement purposes because the representatives and other employees had common factual and legal issues.

The court preliminarily approved the settlement after evaluating its overall fairness. It cited the value of the settlement, litigation risks and uncertainties, the possibility of individualized inquiries about job duties and exemptions, the costs and delay of continued litigation or arbitration, and the parties’ serious, non-collusive, arm’s-length negotiations. The court also found the proposed Private Attorneys General Act allocation within a reasonable range. This was preliminary approval only; a later hearing was required for final approval.

The court deferred attorney-fee decisions, service-award decisions, and consideration of the proposed cy pres distribution until the final approval hearing. “Cy pres” refers here to distributing certain remaining settlement funds to the Employee Rights Advocacy Institute for Law and Policy if specified California class-member funds remained unclaimed. The court approved the notice plan, provisionally appointed Foster as class representative, provisionally appointed the listed attorneys as class counsel for settlement purposes only, appointed Atticus as settlement administrator, and authorized the second amended complaint.

Disposition

Judge Laurel Beeler ordered the parties and the administrator to follow the settlement procedures, including notice, opt-out, objection, and final-approval deadlines. The order conditionally certified the settlement groups, preliminarily approved the settlement, approved notice, and set a final approval hearing for March 12, 2020. The order stated that its findings were for settlement purposes only and that the action would proceed as if no class had been certified if final approval did not occur or the agreement was later invalidated.