Billups-Larkin v. Aramark Services, Inc.

Background

Tiara Billups-Larkin filed a putative wage-and-hour class action against Aramark Services, Inc. in California state court in 2021. The complaint alleged violations of California law, including failures to pay minimum wages and overtime. It also alleged that employees were not compensated for temperature screenings and health checks related to the COVID-19 pandemic and that Aramark failed to reimburse employees for personal protective equipment. After removal to federal court, Billups-Larkin amended the complaint to add a claim under California’s Private Attorneys General Act, or PAGA.

The parties conducted informal discovery and participated in a full-day private mediation. They then proposed a non-reversionary settlement under which Aramark would pay a gross amount of $460,000. The proposed settlement class consisted of all current and former non-exempt employees who worked for the Corrections line of business in California at any time from December 19, 2016, through December 15, 2022. The parties estimated that the class included approximately 745 people.

From the gross settlement, the proposal allowed up to $161,000 for attorney fees, up to $15,000 for costs, a $15,000 service award to Billups-Larkin, and $25,000 for settlement administration. It also designated $20,000 as the PAGA settlement amount, with 75% payable to the California Labor and Workforce Development Agency. The opinion stated that $229,000 would remain for the class, divided proportionally according to members’ workweeks and pay periods, with an estimated average payment of about $308. Class members would release claims raised in the action or based on the same alleged facts, legal theories, or statutory violations.

Legal standard

The court considered the request under Federal Rule of Civil Procedure 23, which governs class actions, and Rule 23(e), which governs settlement approval. For settlement purposes, a proposed class must satisfy Rule 23(a)’s requirements of numerosity, commonality, typicality, and adequacy, as well as one of Rule 23(b)’s categories. Billups-Larkin relied on Rule 23(b)(3), which requires common legal or factual questions to predominate over individual questions and requires a class action to be superior to other methods of resolving the dispute.

The court also had to decide whether the proposed settlement appeared fair, adequate, and reasonable. At the preliminary-approval stage, the court examined whether the agreement appeared to result from serious, informed, non-collusive negotiations, had no obvious defects, avoided preferential treatment, and fell within the range of possible approval. Preliminary approval would be followed by notice to class members and a later hearing on final approval.

Court’s analysis

The court found that the proposed class met the certification requirements. Its approximately 745 members satisfied numerosity. The members shared common questions concerning Aramark’s workplace policies and protocols, and the court found that common issues generally predominated even though overtime and minimum-wage claims were less easily resolved through common proof because employees worked within different prison systems with potentially different policies. Because Billups-Larkin was subject to the challenged policies, the court found her claims typical. The court also found no apparent conflicts of interest or other problems preventing her from adequately representing the class.

The court found the settlement fair, adequate, and reasonable. It noted the asserted risks and uncertainties concerning class certification and the merits, Aramark’s twenty-nine affirmative defenses, Aramark’s disputes about the allegations, and the additional discovery, class-certification proceedings, and possible trial that continued litigation would require. The court also considered counsel’s significant wage-and-hour class-action experience.

The court stated that the settlement represented approximately 16.6% of the maximum possible recovery. Although that percentage could also be viewed as an 83.4% discount, the court concluded that the result was fair and reasonable and exceeded other settlements approved by district courts in the Ninth Circuit in both percentage and amount. The court found that the proposed fee and cost ceilings appeared reasonable on their face, while noting that final approval of those expenses would require closer scrutiny. It also found the service award appeared reasonable. Because the settlement was non-reversionary, any amounts not approved for attorney fees, the service award, or administration would return to the class’s net settlement amount.

The court separately found the proposed $20,000 PAGA payment reasonable. It described the payment as approximately 1.9% of the stated $1,031,200 value of the PAGA claim, but concluded that the reduction was consistent with the strengths and weaknesses of the case and the possibility that penalties would be reduced if the case continued. The Labor and Workforce Development Agency would have an opportunity to address the payment before final approval.

Order

Judge Seeborg granted the motion for preliminary approval. The court certified the settlement class for purposes of settlement, preliminarily appointed Billups-Larkin as class representative, preliminarily appointed Jonathan M. Lebe and Zachary Gershman of Lebe Law, APLC as class counsel, and preliminarily approved the submitted Settlement Agreement.

The court appointed Phoenix Settlement Administrators as settlement administrator and approved the proposed class notice and notice procedures. Class members would have 45 days after the administrator mailed the notice to opt out, submit a dispute, or object. The court scheduled a final hearing for December 7, 2023, at 1:30 p.m., and ordered the parties to file a final implementation schedule and briefing schedule as soon as practicable. The opinion granted preliminary approval; it did not state that the settlement received final approval.