Dixon v. Cushman & Wakefield Western, Inc.

Background

Dimitri Dixon and Ryan Seltz brought wage-and-hour claims against Cushman & Wakefield entities. The plaintiffs alleged that appraisers, junior appraisers, associate appraisers, and senior appraisers were misclassified as exempt employees and therefore denied overtime pay. The allegations also included missed meal and rest periods, inaccurate wage statements, unpaid wages at termination, unreimbursed business expenses, and issues involving recoverable-draw compensation and promissory notes.

The parties reached a global settlement combining three related proceedings for settlement purposes. The settlement was presented through a second amended complaint that added a defendant, expanded the California class to include junior appraisers, and expanded the Fair Labor Standards Act (FLSA) collective to include junior appraisers and appraisers who worked outside California.

Settlement groups and terms

The proposed settlement included a California class under Federal Rule of Civil Procedure 23 and FLSA collectives for employees who affirmatively opted into the federal claims. The proposed California class covered people employed in California as appraisers, including junior and senior appraisers, during the stated class period. The proposed FLSA collectives covered specified appraisers, senior appraisers, junior appraisers, and associate appraisers assigned to Cushman offices in any state during the applicable periods.

The court stated that there were 476 settlement class or collective members: 111 California settlement class members and 367 non-California settlement collective members. The agreement provided for a maximum common fund of $4.9 million. Up to approximately $3,134,666.67 would be distributed through a point-based formula. The formula awarded one point per workweek to eligible non-California employees who had not previously opted into the FLSA claims, two points to certain prior FLSA opt-ins, three points to California class members who had not opted into the FLSA action, and four points to California class members who had opted into the FLSA action.

The agreement also provided for a $20,000 payment to California’s labor agency as the state’s share of the proposed Private Attorneys General Act penalties, service awards of $10,000 each to Dixon and Seltz, $2,000 awards to six declarants, up to $20,000 in settlement-administration costs, up to $60,000 in litigation costs, and a maximum attorney-fee request of one-third of the common fund, or $1,633,333.33. The court did not finally approve those service awards, fees, or costs in this order.

Participating California class members would release claims based on the alleged misclassification and related facts, and participants in the FLSA settlement would release the covered federal and state overtime claims. California class members could opt out of the settlement, while eligible non-California FLSA participants could participate by submitting claim forms. FLSA collective members would not be bound unless they affirmatively opted in.

Conditional certification of the settlement class

For settlement purposes, the court found that the proposed California class met Rule 23(a)’s requirements of numerosity, commonality, typicality, and adequate representation. The court found that common questions predominated, including whether Cushman properly classified California employees as exempt, failed to provide meal and rest breaks, required personal-cell-phone use without reimbursement, issued inaccurate wage statements, and failed to pay wages due at separation. The court also found that a class action was the superior method for resolving those common issues.

The court therefore concluded that conditional certification of the California settlement class was proper. This was certification for settlement purposes, not a final ruling on liability for the alleged wage violations.

Conditional certification of the FLSA collectives

The court separately applied the FLSA’s requirement that collective members be similarly situated. It found a reasonable basis for concluding that the proposed collective members held similar appraiser positions and were subject to the same alleged treatment as exempt from FLSA overtime requirements. The court granted conditional certification of the FLSA collective action for settlement purposes.

Preliminary approval of the settlement

The court explained that preliminary approval asks whether a proposed class settlement appears potentially fair, adequate, and reasonable and whether it appears to result from serious, informed, non-collusive negotiations. The court considered the parties’ investigation, discovery, three mediations, prior conditional certifications, the proposed allocation formula, litigation risks, estimated recovery, and non-monetary relief.

The court was initially concerned about aspects of the settlement, including the amount of the service awards, the possible return of unclaimed funds for non-California employees, and the settlement amount. After reviewing supplemental briefing, the court concluded at the preliminary stage that the agreement had no obvious deficiencies, did not improperly favor particular class members, and fell within the range of possible approval. The court also found that the parties’ different treatment of Rule 23 class claims and FLSA collective claims was appropriate because FLSA participants would not be bound unless they opted in.

The court considered significant non-monetary relief, including Cushman’s reclassification of junior appraisers as non-exempt, changes to pay practices for employees receiving recoverable draws, and the agreement not to enforce promissory notes against participating settlement members. The court concluded that preliminary approval and notice to class members were warranted.

Notice and next steps

The court approved the revised notices and notice plan. The notices were required to describe the litigation, settlement, estimated minimum individual recovery, participation choices, opt-out and objection procedures, releases, attorney-fee information, and the final fairness hearing. Notices were to be mailed and emailed by September 20, 2021.

The court set November 22, 2021, as the latest deadline for California class members to request exclusion or object. Eligible non-California participants were given 60 days from initial mailing, or 90 days after a remailing, to submit claim forms. Class counsel had to file the attorney-fee and cost motion by October 25, 2021, and the plaintiffs had to file the motion for final approval by February 24, 2022. The final approval hearing was scheduled for March 31, 2022, at 9:00 a.m.

Disposition

The court granted the motion for preliminary approval of the class and collective action settlement. It did not grant final approval, decide the ultimate merits of the wage claims, or finally determine the appropriate attorney fees, litigation costs, or service awards.