Rodriguez v. Nike Retail Services, Inc.

Background

Isaac Rodriguez brought this wage-and-hour class action against Nike Retail Services, Inc. under California law. He alleged that Nike required retail employees to undergo security inspections when leaving its stores but did not compensate them for the inspection time. He asserted claims under California Labor Code sections 1194, 1997, 510, and 1194, and under California’s unfair-competition law, and also sought waiting-time penalties.

The Court certified a class in 2016. In 2017, it granted Nike summary judgment based on the federal de minimis doctrine, which treats very small amounts of otherwise compensable time as legally insignificant. The Ninth Circuit reversed in 2019 after the California Supreme Court held in Troester that the federal doctrine did not apply to California wage-and-hour claims. The parties later amended the class period to end on November 15, 2019, when Nike adopted a policy paying employees for time spent in security inspections, and then reached a settlement.

Settlement Terms and Notice

The settlement fund totaled $8,250,000. Class members who did not opt out would receive payments based on their shifts worked as a fraction of the class’s total shifts. The opinion stated that the average payment would be approximately $319.99, with individual payments ranging from approximately $11.36 to $2,280.74. Uncashed-check funds would be paid to Legal Aid at Work as the designated recipient.

The settlement administrator mailed notice packets to the class. The opinion reported that more than 16,000 packets were sent, that only 34 packets remained undeliverable after updated addresses were located, that no objections were filed, and that one class member opted out. The Court found the notice adequate and concluded that the settlement class met the requirements for certification under Federal Rule of Civil Procedure 23.

Court’s Analysis

For final approval of a class settlement, the Court considered whether the settlement was fair, adequate, reasonable, and free from collusion. Applying the factors used by the U.S. Court of Appeals for the Ninth Circuit, the Court found that Rodriguez faced uncertainty about whether the inspections were compensable under California law and that continued litigation would involve significant risk, expense, complexity, and time. The Court also considered the extensive discovery, counsel’s experience and recommendation, the settlement’s recovery for class members, and the class’s lack of objections. The Court concluded that the settlement was fundamentally fair, adequate, and reasonable.

The Court approved $178,996.11 in class-counsel costs after reviewing the itemized expenses. It also approved $2,750,000 in attorneys’ fees, equal to approximately one-third of the settlement fund. Although that percentage exceeded the Ninth Circuit’s 25-percent benchmark, a calculation based on counsel’s time and hourly rates produced a lodestar of $2,333,980 and a multiplier of approximately 1.17. The Court found the requested fee reasonable in light of the length of the litigation, the appeal, the work performed, and the results achieved.

Rodriguez requested a $15,000 enhancement award for his work as the named plaintiff. The Court found that his described activities—including meeting with attorneys, providing information and documents, reviewing case materials, preparing for a deposition, and traveling for that deposition—were typical of a named plaintiff and did not justify the requested amount. Because the case had been pending for a significant period and Rodriguez had publicly identified himself with the case, the Court approved a higher-than-usual award of $7,500. The Court also found the settlement administrator’s $69,750 fee reasonable.

Disposition

The Court GRANTED Rodriguez’s Motion for Final Approval of Class Action Settlement in the total amount of $8,250,000. It APPROVED $2,750,000 in attorneys’ fees and $178,996.11 in costs for Class Counsel; APPROVED IN PART Rodriguez’s enhancement award in the amount of $7,500; APPROVED the Settlement Administrator’s costs of $69,750; and APPROVED Francisco A. Soto’s timely request for exclusion. The fees, costs, enhancement award, and administrator costs were to be deducted from the total settlement amount.