Forsyth v. HP Inc.

Background

The plaintiffs alleged that HP Inc., previously named Hewlett-Packard Company, and Hewlett-Packard Enterprise Company violated the federal Age Discrimination in Employment Act, California’s Fair Employment and Housing Act, California’s Unfair Competition Law, and common law by terminating older employees in workforce reductions and replacing them with younger employees. The defendants denied that they engaged in unlawful conduct, violated the cited laws, or owed damages.

The case involved 146 plaintiffs who opted into the federal age-discrimination collective action and approximately 242 participating members of the California settlement classes. Thirty-two California class members also opted into an Age Discrimination in Employment Act collective. The opinion states that 356 unique individuals were eligible to share in the settlement proceeds.

Settlement Terms

The court approved a maximum gross settlement amount of $18,000,000. The fund covered individual settlement payments, attorneys’ fees, litigation costs and expenses up to $200,000, and service awards of up to $10,000 for each of five named plaintiffs. After the listed deductions, the adjusted settlement amount was $13,250,000, allocated as $7,905,044.17 for the federal collective-action plaintiffs and $5,344,955.83 for participating California class members.

The allocation method considered each person’s salary at termination, years employed by a defendant, and potential lost earnings after considering post-termination earnings and the duty to reduce damages. Half of each payment would be treated as back wages and half as liquidated damages. The defendants would pay the employer’s share of payroll taxes, while other applicable taxes would be deducted from individual settlement shares.

The settlement covered California employees age 40 or older whose employment was terminated under specified workforce-reduction plans during the periods stated in the class definitions. It excluded people who had signed specified waivers, releases, or arbitration agreements. The release was limited to age-discrimination claims concerning re-hiring, retention, termination, or related retaliation through November 3, 2023. The five named plaintiffs also agreed to a general release.

If at least $25,000 in uncashed checks remained, the settlement provided for a second proportional distribution to the federal plaintiffs and participating California class members. Smaller remaining amounts, or money left after that second distribution, would go to the AARP Foundation as the proposed recipient for those funds. No allocated settlement money would revert to the defendants.

Class Certification and Final Approval

For settlement purposes only, the court finally certified the California settlement classes under Federal Rule of Civil Procedure 23(a) and (b)(3). The court found that the classes were sufficiently numerous, shared factual and legal questions, had representative claims, and were adequately represented. It also found that common issues predominated and that a class action was the superior method for resolving the controversy.

The court reviewed whether the settlement was fair, reasonable, and adequate. It found substantial risks in continued litigation, including risks at the certification stage and at trial. It found the settlement amount and allocation plan fair and based on objective factors. The court also found that discovery—including written discovery, corporate depositions, investigations, and expert consultations—adequately informed the parties’ negotiations.

The court found that class counsel were experienced and qualified, that no government entity objected or sought to intervene, and that the absence of class-member objections supported approval. The notice was sent to 244 California settlement-class members; no objections were filed, and two people opted out. The court also found that the settlement resulted from arm’s-length negotiations and showed no indication of collusion.

Fees, Costs, and Service Awards

The court granted the request for $4,500,000 in attorneys’ fees, equal to 25 percent of the maximum common fund. It found the amount reasonable based on the results obtained, the risks counsel undertook on a contingent-fee basis, counsel’s skill and work, comparisons with similar awards, and a lodestar cross-check.

The court also granted reimbursement of $200,000 in costs and expenses, including electronic-discovery storage, consultants and potential expert witnesses, mediator fees, and settlement-administration costs. It granted $10,000 service awards to each of the five named plaintiffs, finding that their contributions and the risks they took supported those awards.

Order

The court granted Plaintiffs’ Motion for Final Approval and Plaintiffs’ Motion for Attorneys’ Fees, Costs and Service Awards. It certified the California settlement classes for settlement purposes only, found the settlement fair, reasonable, and adequate, approved the notice, approved the fees, costs, and service awards, authorized the settlement administrator to distribute the funds, and retained jurisdiction over the claims, parties, and settlement administration.

The court approved the released claims and ordered that the parties’ proposed final judgment be entered, dismissing the action and the released claims with prejudice and without costs against any settling party except as provided in the settlement agreement. The order also required class counsel to file a post-distribution accounting within 21 days after distributing the settlement funds and paying attorneys’ fees, and no later than November 15, 2024.