Ayoub v. Harry Winston, Inc.

Background

Samer Srour Ayoub worked as a security guard at Harry Winston, Inc.’s store from March 15, 2019, through September 28, 2020. After his employment ended, he sued Harry Winston, asserting individual wage-and-hour claims and representative claims under California’s Private Attorneys General Act, or PAGA. The PAGA claims covered Ayoub and other non-exempt security officers employed by Harry Winston in California beginning December 18, 2019.

Following a half-day mediation on September 3, 2021, the parties agreed to resolve Ayoub’s individual claims for $76,500 and the PAGA claims for $23,500. The court previously denied Ayoub’s first motion to approve the PAGA settlement because he had not provided enough information to evaluate the settlement amount and requested attorney’s fees. Ayoub then filed the renewed motion addressed in this order.

Proposed PAGA Settlement

The proposed $23,500 PAGA Settlement Fund included deductions of $7,833.33 for attorney’s fees, $3,134.64 for litigation costs, and $975 for third-party administration costs. The proposed net settlement was $11,557.03. Under PAGA, 75% of that amount would go to California’s Labor and Workforce Development Agency, and 25% would be distributed among 14 aggrieved employees.

PAGA requires court review and approval because a PAGA settlement resolves claims that could otherwise be brought by the state. The court evaluated the settlement using factors concerning the strength of the claims, the risks and costs of continued litigation, the settlement amount, the extent of information exchanged, counsel’s experience and views, and government participation.

Approval of the Settlement

The court concluded that the factors, considered together, favored approval. Ayoub would have had to prove each alleged Labor Code violation for each of the 14 employees. The court noted risks involving the lack of records for alleged pre-shift unpaid work, the need for additional information exchange, the expense and duration of further litigation, and the possibility that penalties could be reduced even if violations were proven.

The $23,500 settlement represented 22.4% of Harry Winston’s maximum calculated exposure of $105,029.06. The court found that amount fair, reasonable, and consistent with PAGA’s purpose of deterring violations of California labor law. Although the parties had not conducted formal discovery, they had exchanged information under initial discovery procedures, which gave Ayoub enough data to model maximum liability. The absence of formal discovery weighed against approval, but the other factors outweighed that concern. The court also found that counsel had substantial employment-litigation experience, while the Labor and Workforce Development Agency’s lack of response to the settlement notice made the government-participation factor neutral.

The court approved the $23,500 PAGA settlement.

Attorney’s Fees and Costs

Ayoub requested $7,833.33 in PAGA attorney’s fees, equal to 33.3% of the PAGA Settlement Fund, and $4,109.64 in costs, including administration costs. The court explained that it had an independent duty to assess whether fees were reasonable, even though the parties had agreed to them.

The court denied the requested additional $7,833.33 in attorney’s fees. The separate individual-claims settlement already provided $28,500 in attorney’s fees and costs. Because the total settlement was $100,000, that amount represented 28.5% of the total settlement and was already near the upper end of the Ninth Circuit’s usual 20% to 30% range. Ayoub did not identify special circumstances supporting additional fees, so the $7,833.33 was deemed unreasonable and was to be returned to the PAGA Settlement Fund.

As to costs, the court found that the actual total costs for the case were $7,109.64 and were reasonably incurred. Because Ayoub’s proposed allocation contained inconsistent figures, the court divided the costs equally between the individual and PAGA settlements and awarded $3,554.82 in costs to the PAGA portion.

Disposition

For these reasons, Judge Jon S. Tigar approved the PAGA settlement and granted in part and denied in part Ayoub’s request for attorney’s fees and costs. The court dismissed Ayoub’s individual and PAGA claims with prejudice, directed the Clerk to enter judgment and close the file, and retained jurisdiction to carry out and enforce the individual and PAGA settlement agreements.