Vigil v. Hyatt Corporation

Background

Joe Vigil worked as a security officer at the Grand Hyatt San Francisco hotel from approximately February 2001 to November 2020. He alleged that Hyatt Corporation and Grand Hyatt S.F., LLC had policies requiring employees to work off the clock, remain on the premises during meal and rest periods, carry communication devices during those periods, and perform other uncompensated work. He also alleged failures to pay minimum and overtime wages and sick leave, provide meal and rest periods, timely pay wages, reimburse necessary expenses, and maintain accurate time and payroll records.

The parties participated in mediation in December 2022 and fully executed a settlement agreement in May 2023. The court had previously granted preliminary approval. The final approval motions were unopposed.

Settlement Terms and Notice

The settlement class included 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 defendants agreed to make a $725,000 non-reversionary payment, meaning the fund would not return unused amounts to the defendants under the settlement’s terms. The fund included class payments, administration fees, payroll taxes, any incentive payment, and court-approved fees and costs. Payments to class members were based on the number of weeks worked.

The agreement allocated $10,000 to civil penalties under California’s Private Attorneys General Act: $7,500 to the California Labor and Workforce Development Agency and $2,500 distributed proportionally to class members. Class members who did not opt out would release claims based on the factual allegations in the operative complaint for the specified period, including wage, break, expense-reimbursement, recordkeeping, unfair-competition, and related penalty claims.

The settlement administrator mailed notice packets to all 664 people on the class list and attempted to locate and re-mail returned packets. After those efforts, no packets remained undeliverable. One class member requested exclusion, and no class member objected.

Final Settlement Approval

Under Federal Rule of Civil Procedure 23, the court reviewed whether the settlement class met the requirements for class certification and whether the settlement was fair, reasonable, and adequate. The court incorporated its earlier class-certification analysis because no relevant facts had changed. It found that the notice was adequate and that the settlement was fair, adequate, and reasonable.

The court considered the risks of continued litigation, the defenses identified by the defendants, the uncertainty of proving the alleged systemic violations, the discovery and investigation completed, the settlement amount, and the class’s reaction. The court noted that the settlement represented approximately 35.5% to 39.1% of the estimated realistic recovery at trial. It found that the 663 current claimants would receive meaningful individual recoveries, with an estimated average payment of $647.56, a highest payment of approximately $1,894.89, and a lowest payment of approximately $4.89.

The court therefore granted the motion for final approval of the class action settlement.

Attorneys’ Fees and Costs

Class counsel requested $241,666.67 in attorneys’ fees and $24,253.43 in costs. The requested fee equaled more than 33% of the settlement fund. The court applied a 25% benchmark for common-fund cases and determined that $181,250—25% of $725,000—was appropriate.

The court found that the settlement produced a significant benefit and that counsel litigated the case skillfully and professionally. But it found no sufficient basis for an upward adjustment because the case was not shown to involve unusually complex or novel issues or risks compared with similar wage-and-hour cases. The court also found the claimed lodestar, a calculation based on reasonable hours multiplied by reasonable hourly rates, inadequately supported. It cited the lack of contested motions practice, the absence of known formal depositions, vague time entries, insufficient support for counsel’s hourly rates, and possible billing for clerical work.

The court found the requested costs reasonable because counsel provided a breakdown that included expenses for experts, mediation, travel, and service of process. It awarded $181,250 in attorneys’ fees and $24,253.43 in costs, for a total of $205,503.43. The order states that 10% of the awarded attorneys’ fees would be withheld until counsel filed the required post-distribution accounting.

Incentive Award

Class counsel requested a $10,000 incentive award for Joe Vigil. The court recognized Vigil’s reported work on the case and the reputational risk he allegedly undertook, but noted that the submissions did not specify how many hours he spent. The court also found that $10,000 would exceed 15 times the projected average class-member recovery of $647.56. It determined that a $5,000 service award was reasonable and granted in part the request for an incentive award.

Disposition and Further Requirements

Judge Haywood S. Gilliam, Jr. granted the motion for final approval of the class action settlement and granted in part and denied in part the motion for attorneys’ fees and incentive award. The court awarded $181,250 in attorneys’ fees, $24,253.43 in costs, and $5,000 to Joe Vigil. The parties and settlement administrator were directed to implement the settlement, file a stipulated final judgment within 14 days, and file a post-distribution accounting within 21 days after the settlement checks became stale or all required funds had been paid.