Ward v. United Airlines, Inc.

Background

This certified class action concerned alleged deficiencies in wage statements issued to United Airlines pilots covered by California income-tax laws. The initial complaint alleged that United failed to include the employer’s physical address, hours worked, and applicable hourly rates, in violation of California Labor Code Section 226(a). Plaintiffs sought civil penalties under the Private Attorneys General Act, statutory damages, and an injunction.

The court previously certified a class of certain United pilots with a designated home-base airport in California during the relevant period. After an initial summary-judgment ruling for United, the court of appeals reversed and remanded. In August 2022, this court granted summary judgment for plaintiffs on their claims under Sections 226(a)(2) and (a)(9), and granted United’s motion on the Section 226(a)(8) claim. That ruling changed the beginning of the class period from April 2014 to February 2021.

Settlement

The parties reached a settlement after mediation. Following discovery of an error in the class data, the class expanded to 4,207 members, and the settlement fund increased from $7.5 million to $10.1 million. The fund was deposited into an interest-bearing account for administration. After litigation costs, settlement-administration costs, and service awards, $9,966,420.17 remained for calculating attorney’s fees. The order provided that $7,041,122.52, plus accumulated interest, would be distributed to class members after the fee award and other deductions. Payments would be calculated proportionally based on the number of wage statements each class member received.

The settlement required dismissal of the action with prejudice and released claims related to the alleged wage-statement formatting violations, including derivative claims based on the pleadings. Of 4,194 notified class members, one opted out and none objected. The settlement also included a $134,700 penalty under the Private Attorneys General Act, with the opinion stating that 75 percent would go to the California Labor and Workforce Development Agency and 25 percent, or $33,675, would be distributed to 7,484 affected employees.

Final approval

Judge William Alsup applied the factors required for class-action settlements, including the strength of the claims, the risks and costs of continued litigation, the amount offered, the discovery completed, counsel’s experience, and the class’s reaction. He also considered whether the representatives and counsel adequately represented the class, whether negotiations were at arm’s length, whether the relief was adequate, and whether class members were treated equitably. He found these factors supported approval and held that the settlement was fair, reasonable, adequate, consistent with public policy, and legally compliant. Final approval of the class settlement was therefore granted.

Attorney’s fees, costs, and service awards

Counsel requested one-third of the settlement fund in fees. The court used 25 percent as the usual benchmark for common-fund cases and found that the strong result justified an upward adjustment. It granted counsel 28 percent of the relevant fund, or $2,790,597.65, rather than the requested one-third. The court also granted the request for $81,953.13 in litigation costs. Half of the attorney’s fees was payable immediately, while the remaining half could be recovered only after counsel certified that the fund had been completely wound up.

The court found the requested $20,000 service award for Ward and $10,000 award for Richards excessive. It awarded Ward $500 and Richards $250 instead. The awards were to be paid from the settlement fund.

Consent decree

United separately sought approval of a consent decree concerning revised pilot wage statements. The court stated that the revised forms appeared to include total hours worked, applicable effective hourly rates, and the hours worked at each rate, appearing to conform to the relevant portions of Section 226(a). But the court found that the consent decree itself was substantively deficient because it purported to provide a complete defense against too broad a group of potential litigants for too long a period. United’s motion to approve the consent decree was denied.

Continuing jurisdiction

The court retained jurisdiction over the class action, the named plaintiffs, the class, and United for four years from the order’s entry to supervise implementation, enforcement, construction, and interpretation of the revised settlement agreement and the order.