Eisenacher v. VITAS HOSPICE SERVICES, LLC

Background

Kristina Eisenacher alleged that her former employer, VITAS Hospice Services, LLC, created unsafe working conditions during the COVID-19 pandemic by requiring sales representatives to continue making in-person visits to hospitals and other medical facilities despite shelter-in-place orders. She also alleged that VITAS retaliated against her after she complained.

The parties jointly sought approval of a settlement under California’s Labor Code Private Attorneys General Act of 2004, commonly called PAGA. Under PAGA, a worker acts as an agent of California’s labor-law enforcement agencies and seeks civil penalties on the state’s behalf. A court must review and approve a PAGA settlement, and the proposed settlement must also be submitted to the California Labor and Workforce Development Agency.

Settlement Terms

The parties agreed to a gross settlement of $236,993.27. The settlement includes $20,000 in PAGA penalties, a net payment of $177,964.14 to Eisenacher, and $39,029.13 in attorneys’ fees and costs, including the cost of distributing the fund.

The agreement also includes ten non-monetary COVID-19 safety protocols. The listed measures require VITAS to continue or provide workplace and in-person-sales safety protocols, COVID-19 testing and reporting, employee contact tracing, compliance with facility policies, two additional weeks of paid time off for employees including those who contracted COVID-19, reasonable work-from-home accommodations for sales representatives with a disability or medical issue unless doing so would cause undue hardship, and credit for virtual communications toward call quotas while COVID-19 public-health orders remain in place.

Seventy-five percent of the PAGA penalties will be distributed to California, and the remaining 25 percent will be distributed among the “aggrieved employees.” The agreement defines that group as all current and former California sales representatives employed by the defendants from March 12, 2020, through January 31, 2021. Eisenacher proposed an equal distribution among 112 employees, resulting in approximately $44.64 per employee.

The aggrieved employees release claims for civil penalties recoverable under PAGA, but the settlement does not release their individual underlying claims or causes of action. The notice accompanying the distribution explains that they cannot bring later PAGA actions but retain the right to bring private lawsuits. Eisenacher separately agreed to release all claims, including unknown claims, against VITAS as of the settlement’s effective date and not to participate in any class, collective, or enforcement action.

Court’s Analysis

The court applied the requirements that PAGA’s statutory procedures be satisfied and that the settlement be fair, reasonable, and adequate in light of PAGA’s public-policy goals. Those goals include helping the state enforce labor laws, encouraging compliance, and deterring violations. The court also considered the factors commonly used to evaluate class-action settlements, including the risks and expense of continued litigation and the adequacy of the proposed recovery.

The court found that continued litigation would be risky because of the number of employees and their differing experiences with VITAS’s policies, locations, and managers. The court also noted that the effects of COVID-19 on worker safety presented novel legal questions, and that further litigation could delay needed workplace-policy changes. It concluded that the $20,000 penalty was within a reasonable range and large enough to encourage compliance. The opinion’s footnote states that the California Labor and Workforce Development Agency and the California Division of Occupational Safety and Health were notified, and that the agencies declined to intervene or appear.

Disposition

The court approved the PAGA settlement. The order did not decide whether VITAS actually violated the Labor Code or retaliated against Eisenacher; it approved the parties’ resolution after evaluating the settlement’s fairness, adequacy, and consistency with PAGA’s purposes.