Morrison v. American National Red Cross

Background

La Toiya Morrison brought a wage-and-hour class action against American National Red Cross on behalf of herself and a proposed class of California instructors who taught courses to Red Cross clients. She alleged that the Red Cross required instructors to use personal cell phones for work-related communications without reimbursing their expenses. She also alleged that instructors were not authorized or permitted to take required meal and rest breaks and were not paid for missed breaks. The complaint asserted violations of California labor laws, California wage orders, and California’s Unfair Competition Law. The case also included a claim under California’s Private Attorneys General Act, which allows an employee to seek civil penalties for certain labor-law violations on behalf of the state and other affected employees.

The parties settled after informal discovery, investigation of the Red Cross’s policies and practices, review of payroll and scheduling information, and mediation. The settlement class covered current and former Training Services instructors and Nurse Assistant Training instructors who taught courses to Red Cross clients in California from April 24, 2015, through the date of the preliminary approval order. The Red Cross agreed to pay a non-reverting $377,000 settlement fund. Of that amount, $37,700 was allocated to the Private Attorneys General Act claim: $28,275 to the California Labor and Workforce Development Agency and $9,425 to eligible instructors. Settlement payments to class members were based on the number of pay periods worked. The agreement also provided for notice, the opportunity to object or opt out of the class settlement, a payment to a legal-services organization for uncashed checks, attorneys’ fees and costs, and a possible incentive award for Morrison.

Final Settlement Approval

The court held a final fairness hearing on January 7, 2021. It found that the notice plan complied with the applicable class-action rules. The settlement administrator mailed 377 notice packets, re-mailed 21 of the 25 packets initially returned as undeliverable, and reported that four packets remained undeliverable as of November 30, 2020. No class member objected, and three class members requested exclusion.

The court found the settlement fair, adequate, and reasonable. It considered the risks and expense of continued litigation, the risk of maintaining class certification, the settlement amount, the parties’ investigation and informal discovery, counsel’s experience, and the class members’ response. The court stated that the $377,000 settlement represented approximately 71 percent of class counsel’s estimate of the realistic recovery at trial. It granted the motion for final approval of the class-action settlement.

Attorneys’ Fees, Costs, and Incentive Award

Class counsel requested $94,250 in attorneys’ fees, $9,095.15 in costs, and an $8,000 incentive award for Morrison. The court granted attorneys’ fees of $94,250, equal to 25 percent of the settlement fund. It found that the requested percentage was supported by the results achieved, the risks of litigation, counsel’s work and experience, and the contingent nature of the representation. The court also granted the requested $9,095.15 in costs.

The court granted in part the request for an incentive award. Although it recognized Morrison’s work on behalf of the class, it found that the requested $8,000 was almost fourteen times the average class-member recovery and that the case settled before formal discovery and before Morrison was deposed. The court awarded her $5,000 instead.

Disposition

The court granted the motion for final approval of the class-action settlement and granted in part the motion for attorneys’ fees and incentive award. It approved the $377,000 settlement, administrator fees not exceeding $7,500, attorneys’ fees and costs totaling $103,345.15, and a $5,000 incentive award for Morrison. The parties and settlement administrator were directed to implement the agreement, and the parties were directed to file a short stipulated final judgment within 21 days.