Judge Daniel M. Crowley, Case Number: STCV19161, Date: 2024-05-31 Tentative Ruling

Plaintiff Estefania Fuentes Rosas’ unopposed motion for an order approving a PAGA Settlement reached in this case is granted.

Plaintiff Estefania Fuentes Rosas (“Rosas”) (“Plaintiff”) moves unopposed for an order approving the PAGA Settlement reached in this case. (Notice Motion, pg. 1; Lab. Code §2699(l)(2).)

Plaintiff and Defendant Spring Restaurant Group, LLC, dba Super Mex Restaurant & Bar (“Super Mex”) (collectively, “Parties”) reached a settlement of all claims in this case, including the PAGA claim at issue, during a settlement conference on January 18, 2024. (Decl. of Phillips ¶¶6-7, Exh. 2.) Plaintiff requests the Court issue an order approving the following: (1) the Gross Settlement Amount of $10,000.00 distributed as follows: (a) $3,300.00 for PAGA attorneys’ fees; (b) $6,700.00 of the Net Settlement Amount (“NSA”); (c) $5,025.00 for PAGA Penalty Payment to LWDA (75% of NSA); and (d) $1,675.00 PAGA Penalty Payment to Aggrieved Employees (25% of NSA). (Decl. of Phillips ¶11.)

Labor Code §2699(l)(2) provides, as follows: “The superior court shall review and approve any settlement of any civil action filed pursuant to this part. The proposed settlement shall be submitted to the [Labor & Workforce Development Agency (“LWDA”)] at the same time that it is submitted to the court.”

As a threshold matter, Plaintiff submitted evidence she complied with Labor Code §2699(l)(2) by submitting a copy of the Settlement and instant motion to the LWDA on the same day it submitted the instant motion to this Court on May 8, 2024. (Proof of Service.)

On May 22, 2023, prior to commencing her lawsuit, as required by California Labor Code section 2699.3, Plaintiff provided the LWDA and Defendant with written notice of her intent to assert claims under PAGA and the basis for those claims. (Decl. of Phillips ¶3, Exh. 1.) On August 11, 2023, Plaintiff filed a complaint against Defendant asserting claims under FEHA, the Labor Code, claims under common law, and a cause of action for individual and representative PAGA claims.

On January 18, 2024, the parties agreed to resolve the action during a mandatory settlement conference with Resolve Law LA before attorneys Polina Bernstein and Matthew Lane. (Decl. of Phillips ¶6.) The Parties reached a settlement of all of the claims in the case, including the PAGA claim, during the settlement conference (“Settlement Agreement”). (Decl. of Phillips ¶7, Exh. 2.)

The Settlement defines “PAGA Non-Exempt Employees” as all Non-Exempt Employees that worked for Defendant between June 11, 2022, and January 18, 2024, inclusive. (Decl. of Phillips ¶7, Exh. 2 at §A.) Plaintiff obtained information through written discovery that approximately 25 non-exempt employees worked for Defendant between June 11, 2022, and January 18, 2024 (“PAGA Period”). Plaintiff determined that approximately 84 workweeks are at issue for this period of time. (Decl. of Phillips ¶5.) The definitions are proper pursuant to the statute of limitations and the date of notice on the LWDA.

The Settlement includes a provision, “Limited Release,” which bars Plaintiff, the LWDA, and any PAGA Non-Exempt Employee from pursuing any action against Defendant for civil penalties under Labor Code §§558 and 2698 et. seq. predicated on the alleged Labor Code violations asserted in the Lawsuit, filed August 11, 2023 (including, but not limited to, California Labor Code §§201-203, 221, 223, 226, 226.7, 246, 351, 510, 512, 1174, 1194) during the period June 11, 2022 through January 18, 2024, (“Released PAGA Claim”) against Defendant, and/or Defendant’s past or present parents, subsidiaries, and affiliated corporations, and/or Defendants’ officers, directors, employees, partners, agents, insurers, and/or any other individual or entity which could be liable for the acts of omissions of Defendants (“Released Parties”). (Settlement Agreement ¶2.) As such, the Settlement provides that Released Claims only include claims for civil penalties under PAGA and does not apply to any individual claims and is proper. (Settlement Agreement ¶2; see ZB, N.A. v. Superior Court (2019) 8 Cal.5th 175.)

The terms of the Settlement’s release imply that only in exchange for the consideration set forth in the Settlement (i.e., the individual PAGA payments) do PAGA Non-Exempt Employee release Released Parties from Released Claims. As such, the release is accordingly effective after the payment date, which is proper. (See Settlement Agreement ¶2.)

The Settlement provides that no later than five (5) business days after the Effective Date, Defendant shall provide Law Office of Ramin R. Younessi, APLC (“PAGA Counsel”), with a list of all PAGA Non-Exempt Employees (“PAGA Non-Exempt Employees List”). The PAGA Non-Exempt Employees List shall state the PAGA Non-Exempt Employees’ full names, contact information (including address, phone number, and employee identification number), and dates of service. This data shall only be used for the purpose of facilitating the PAGA settlement and for no other purpose. (Settlement Agreement ¶3a.)

PAGA Non-Exempt Employees shall receive a pro rata share of the amount of the Penalties Fund. Each PAGA Non-Exempt Employees’ pro rata share shall be determined based on the number of workweeks that he or she worked for Defendants in the State of California from June 11, 2022, and January 18, 2024 (“Calculations Period”), relative to the total number of workweeks during which all of the PAGA Non-Exempt Employees worked for Defendant in the State of California during the Calculations Period. These amounts paid to each PAGA Non-Exempt Employee shall be issued via an IRS Form 1099 by Defendant. (Settlement Agreement ¶3d.)

A superior court must review and approve any penalties sought as part of a proposed settlement agreement pursuant to Labor Code section 2699(l). “If, at the time of the alleged violation, the person employs one or more employees, the civil penalty is one hundred dollars ($100) for each aggrieved employee per pay period for the initial violation and two hundred dollars ($200) for each aggrieved employee per pay period for each subsequent violation.” (Lab. Code § 2699(f)(2).) A prevailing employee is entitled to an award of reasonable attorney fees and costs incurred in the action. (Lab. Code §2699(g)(1).) “[C]ivil penalties recovered by aggrieved employees shall be distributed as follows: 75 percent to the [LWDA] for enforcement of labor laws and education of employers and employees about their rights and responsibilities under this code to be continuously appropriated to supplement and not supplant the funding to the [LWDA] for those purposes; and 25 percent to the aggrieved employees.” (Lab. Code § 2699(i).)

Plaintiff’s counsel provides information relating to the investigation conducted. (Decl. of Phillips ¶16.) Plaintiff provided the Court with the Settlement and Plaintiff’s Notice Letter to the LWDA. (Decl. of Phillips ¶¶3, 7, Exhs. 1-2.) Plaintiff also provided information suggesting the Settlement is reasonable based on Plaintiff’s counsels’ detailed analysis of Plaintiffs’ claims and their potential value if Plaintiffs were successful at trial prior to mediation. (Decl. of Phillips ¶9.) Plaintiff provided sufficient information to support the reasonableness of the Settlement and how the terms of the settlement were reached. (Decl. of Phillips ¶¶16-25.)

Plaintiff provides the total amount of the settlement ($10,000.00) and the manner of its distribution from a Settlement Sum. (Settlement Agreement ¶3.) The Settlement sets forth the tax treatment of each Aggrieved Employee’s Payment Share. (Settlement Agreement ¶3d.)

As discussed above, to the extent the release of claims for PAGA penalties is based only on underlying allegations in this action, and as such it only releases claims alleged in the Notice Letters sent to the LWDA, the release does not release anything other than claims for penalties, and there is no Civil Code §1542 waiver, and as such, the release is proper. (See Settlement Agreement ¶2.)

As the prevailing employee, Plaintiff is entitled to reasonable attorneys’ fees in this action. (Lab. Code §2699(g)(1).) The Settlement provides for $3,300 of the NSA allocated to PAGA Counsel. (Settlement Agreement ¶3b.) The Court finds the attorneys’ fees award is sufficiently supported and reasonable.

The Settlement Agreement provides Parties seek this action to be dismissed with prejudice. (Settlement Agreement ¶3b.)

Based on the foregoing, Plaintiff’s unopposed motion for an order approving the Settlement is granted.

Hon. Daniel M. Crowley

Judge of the Superior Court