Vigil v. Hyatt Corporation

Background

Joe Vigil alleged that he worked as a security officer at the Grand Hyatt San Francisco hotel from approximately February 2001 through November 2020. He claimed that Hyatt Corporation and Grand Hyatt S.F., LLC applied uniform policies requiring employees to work off the clock, remain on the premises during meal and rest periods, carry communication devices during those periods, and sometimes continue working without breaks. During the COVID-19 pandemic, employees allegedly had to wait for off-the-clock screening before resuming work. Vigil also alleged that employees used personal phones for work without reimbursement.

The alleged violations included failure to pay minimum and overtime wages and sick leave; failure to provide meal and rest periods; failure to pay wages on time during employment and after separation; failure to reimburse necessary expenses; and failure to maintain accurate timekeeping and payroll records. The parties participated in a full-day mediation in December 2022 and fully executed a settlement agreement in May 2023.

Provisional Class Certification

For settlement purposes, the court provisionally certified a class consisting of all current and former non-exempt, hourly employees who worked for the defendants at the Grand Hyatt San Francisco hotel at any time from November 2, 2017, through March 9, 2023. The court estimated that the class included 527 people.

The court found that the proposed class met Federal Rule of Civil Procedure 23’s requirements of numerosity, commonality, typicality, and adequacy of representation. In plain terms, the class was large enough that joining every person separately would be impractical; the case involved common questions; Vigil’s claims were similar to those of the class; and neither Vigil nor his counsel appeared to have conflicts with other class members. The court also found that common questions predominated and that a class action was the superior method for resolving the dispute for settlement purposes.

The court appointed Vigil as class representative and James Hawkins APLC as class counsel.

Settlement Terms

The defendants agreed to make a non-reversionary payment of $725,000. The fund includes payments to class members, settlement administration costs, the employees’ share of payroll taxes, court-approved attorneys’ fees and costs, and any incentive payment approved for Vigil. Class members’ cash payments will be based on the number of weeks they worked during the relevant period.

The agreement allocates $10,000 to civil penalties under California’s Private Attorneys General Act. Of that amount, $7,500 will go to the California Labor and Workforce Development Agency and $2,500 will be distributed proportionally to class members.

The agreement permits class counsel to request attorneys’ fees of up to 35 percent of the settlement fund, or $253,750, and costs of up to $25,000. Counsel stated that they intended to seek one-third of the fund, or $241,666.67. Vigil may request an incentive award of no more than $10,000. The court expressly stated that it would decide the appropriate fees, costs, and incentive award at the final approval stage; it did not decide those requests in this order.

The settlement releases claims based on the factual allegations in the operative complaint arising between November 2, 2017, and March 9, 2023. The listed claims include wage, meal-period, rest-period, sick-leave, expense-reimbursement, wage-statement, recordkeeping, unfair-competition, and Private Attorneys General Act claims, along with related penalties, interest, fees, and costs.

Preliminary Approval Analysis

The court reviewed whether the settlement appeared to result from serious and informed negotiations without improper collusion, whether it avoided preferential treatment, whether it fell within the possible range of approval, and whether it contained obvious deficiencies.

The court noted that the agreement included a “clear sailing” provision, meaning the defendants agreed not to oppose fee or incentive requests consistent with the agreement. The court treated that provision as a warning sign requiring close review, but found that the factor nevertheless favored preliminary approval at this stage. The settlement was non-reversionary: checks that remained undeliverable or uncashed after 180 days would be sent to the California State Controller’s Office as unclaimed property rather than returned to the defendants.

The court also found that the possible incentive award did not automatically create improper preferential treatment because incentive awards can compensate representatives for work and risks undertaken for the class. The court reserved judgment on whether Vigil should receive an award and, if so, whether the requested amount was reasonable.

The court found that the settlement represented approximately 35.5 to 39.1 percent of counsel’s estimated realistic trial recovery. Counsel estimated individual recoveries ranging from $6.97 to $1,944.63, with an average recovery of approximately $817.99. The court concluded that the settlement amount was within the possible approval range given the risks of continued litigation, including risks involving class certification, trial, and appeals. It found no obvious deficiencies.

Notice Plan and Order

A third-party settlement administrator will mail notice by first-class United States mail to each class member at the last known address, using updated addresses when available and checking the National Change of Address Database when necessary. The notice will include individualized estimates of the number of weeks each class member worked.

The court required additional notice language identifying the deadlines for filing motions for attorneys’ fees, costs, and an incentive award; the deadline for objections to those requests; and how class members could access the motions and supporting materials. With those changes, the court found that the notice provided sufficient information and met due-process requirements.

Judge Haywood S. Gilliam, Jr. granted the motion for preliminary approval and directed the parties to implement the revised notice plan. He also directed the parties to meet and confer and submit, within seven days of the order, a proposed schedule for notice, objections and opt-outs, fee and incentive-payment motions, the final approval motion, and the final fairness hearing. This order granted preliminary approval only; it did not grant final approval of the settlement or decide the final amounts of attorneys’ fees, costs, or any incentive payment.