Stickles v. Atria Senior Living, Inc.

Background

George Stickles and Michele Rhodes worked as Community Sales Directors for Atria Senior Living, Inc. and Atria Management Company, LLC. The lawsuit alleged that the defendants improperly classified Community Sales Directors as exempt outside salespersons, denying them overtime and meal-and-rest-break protections under California law. Stickles asserted six class claims, and Rhodes asserted a representative claim under California’s Private Attorneys General Act.

The court had certified a class consisting of Community Sales Directors who did not sign arbitration agreements and whom the defendants classified as exempt outside salespersons from April 9, 2018, through September 29, 2019. The class was certified only on the classification issue. In November 2022, the court granted summary judgment for the plaintiffs on that issue, but other defenses and the individual wage-and-hour issues remained.

After an earlier proposed settlement was rejected, the parties proposed a revised $1.3 million class and PAGA settlement. The court granted preliminary approval in April 2023 and held a final fairness hearing on October 10, 2023. Of the 73 people initially identified, 69 fell within the class definition. Notice reached all 69; no class member opted out, objected, or disputed the calculations.

Settlement Approval

Under Federal Rule of Civil Procedure 23, a court may approve a class settlement only after finding that it is fair, reasonable, and adequate. The court considered the strength of the plaintiffs’ case, the risks and expense of continued litigation, the settlement amount, the stage of the case, counsel’s experience, and the class members’ response. It also examined whether the settlement showed collusion, conflicts of interest, or unequal treatment.

The court approved the settlement because the plaintiffs faced continuing risks, including unsettled law concerning the outside-salesperson exemption, a possible administrative exemption, and claim-specific proof issues. The $1.3 million settlement represented 35 percent of the estimated maximum recovery of approximately $3,705,718. The court found that the notice was adequate, the settlement was negotiated at arm’s length, and there were no signs of collusion or inequitable treatment.

The settlement provided a net class amount of $885,287.02 for distribution among 69 class members, with an average payment of $12,830.25 and a highest payment of $19,695.49. It separately allocated $40,200 to the PAGA claim. Under the settlement, 75 percent of that PAGA amount would go to the California Labor and Workforce Development Agency, and 25 percent would go to 58 aggrieved employees.

Fees, Costs, and Service Award

Class counsel requested $325,000 in attorney’s fees, equal to 25 percent of the settlement fund. The court approved that request, with half payable immediately and half payable after distribution of the settlement fund. The court also approved $37,512.98 in litigation costs and $7,000 for Phoenix Class Action Administrators, the settlement administrator. The court stated that any request by the administrator for additional costs would require a new motion explaining why those costs were justified.

Stickles requested a $5,000 service award for serving as the class representative. The court found that a large service award could affect a representative’s judgment and create tension with the duty to protect absent class members. It concluded that $500 was the most that could be awarded without that risk. The court therefore granted the motions for final settlement approval and related fees, costs, and awards to the extent stated in the order, and directed that judgment be entered.