Crump v. Hyatt Corporation

Background

Christine Crump alleged that she worked as a line cook at Hyatt House in Emeryville, California, from approximately January through June 2019. She claimed Hyatt used a timekeeping policy that rounded hourly employees’ time to the nearest hour rather than paying them for every minute worked. She alleged that this practice caused Hyatt to fail to pay overtime and minimum wages, pay all wages due at termination, and maintain accurate payroll records.

The parties participated in mediation in July 2021 and fully executed a settlement agreement in February 2022. The proposed settlement class consisted of all current and former non-exempt hourly employees who worked for Hyatt in California at any time from December 6, 2015, through June 9, 2019. The opinion estimated that the class included about 15,900 employees.

Settlement Terms

Hyatt agreed to pay a non-reversionary gross settlement fund of $990,000 in two payments: one-half ten days after judgment and the remaining half six months later. Class members’ payments would be calculated based on the number of weeks they worked during the relevant period.

The fund included $50,000 for civil penalties under California’s Private Attorneys General Act. Of that amount, $37,500 would go to the California Labor and Workforce Development Agency, and $12,500 would be distributed among class members. The fund also covered court-approved attorney fees and costs, settlement-administration expenses, payroll taxes, any incentive payment to Crump, and class-member payments.

The agreement authorized Crump to seek an incentive payment of up to $10,000. Class counsel could request attorney fees of up to 35% of the gross settlement fund, or $346,500, and costs of up to $100,000. The agreement set a deadline for class members to opt out or object 30 days after the initial notice mailing, and allowed Hyatt to withdraw if at least 5% of class members opted out.

Provisional Class Certification

For settlement purposes, the court found that the requirements of Federal Rule of Civil Procedure 23 were met. It found that joining thousands of estimated class members individually would be impracticable; that common questions existed concerning Hyatt’s alleged time-rounding policy; that Crump’s claims were typical because the policy allegedly applied to her and the other class members; and that Crump and her counsel adequately represented the class.

The court also found that common issues predominated over individual issues and that a class action was the superior method for resolving the dispute. The court appointed Crump as class representative and Parris Law Firm as class counsel.

Preliminary Settlement Approval

Before granting preliminary approval, the court considered whether the settlement appeared to result from serious and informed negotiations, fell within the range of possible approval, and lacked obvious defects. The court noted that the settlement was non-reversionary: uncashed or undeliverable checks would be transferred to the California State Controller’s Office as unclaimed property rather than returned to Hyatt or sent to a recipient chosen by the court.

The court identified a “clear sailing” provision under which Hyatt would not oppose a fee request up to 35% of the gross settlement fund. The court treated that provision as a warning sign requiring careful review, but found that it did not prevent preliminary approval. The court stated that it would examine the requested attorney fees more carefully at the final approval stage and did not decide the appropriate fee amount in this order.

The court also found that the possible incentive payment did not prevent preliminary approval. It stated that Crump would need to provide evidence at the final fairness hearing to support any requested award and that the court would then determine whether the award and amount were reasonable.

The proposed settlement represented approximately 76% of class counsel’s estimate of the class’s realistic recovery at trial. The court found that the settlement amount weighed in favor of approval because continued litigation involved substantial risks, including risks concerning class certification, trial, and appeals. The court ultimately found the settlement preliminarily fair, reasonable, and adequate.

Notice Plan and Disposition

The court approved the proposed notice process with changes. A third-party administrator was to mail notice by first-class United States mail to each class member’s last known address, update addresses when possible, and include individualized estimates of weeks worked. The notice explained the settlement, how to opt out or object, and the possible requests for attorney fees, costs, and Crump’s incentive payment.

The court required the notice to identify deadlines for fee and incentive-payment motions, deadlines for objections to those requests, and how class members could access the motions and supporting materials. The court directed the parties to implement the notice plan with those edits.

The court granted the motion for preliminary approval. It directed the parties to meet and confer and submit a schedule within seven days for mailing notice, filing fee and incentive-payment motions, the opt-out and objection deadline, the motion for final approval, and the final fairness hearing. The order provided preliminary approval only; it did not finally approve the settlement or award attorney fees, costs, or an incentive payment.