Chery v. Tegria Holdings LLC

• Court: District Court, W.D. Washington
• Decided: June 12, 2024
• Docket: 2:23-cv-00612
• Status: Unknown

Opinion

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5 UNITED STATES DISTRICT COURT 6 WESTERN DISTRICT OF WASHINGTON AT SEATTLE 7 8 RICARDO CHERY, et al., 9 Plaintiffs, Case No. C23-612-MLP 10 v. ORDER 11 TEGRIA HOLDINGS LLC, 12 Defendant. 13

14 Plaintiffs Ricardo Chery, Marcus McFarland, and Jasmine Siggers have filed an 15 Unopposed Motion for Preliminary Approval of Class Action Settlement. (Dkt. # 29.) Plaintiffs 16 seek preliminary approval of a settlement disposing of their claims that Defendant Tegria 17 Holdings LLC violated the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201, et seq., and 18 state labor laws. (See Am. Compl. (dkt. # 28) at ¶¶ 51-69.) Plaintiffs seek to certify a Federal 19 Rule of Civil Procedure (“Rule”) 23 class for settlement purposes as well as an FLSA collective 20 action. (See Mot. at 3-4.) 21 Plaintiffs’ Motion attaches the proposed settlement agreement. (Dkt. # 29-1.) Having 22 reviewed the proposed settlement, the Court has determined that certain issues must be addressed 23 before preliminary approval may be considered. 1 (1) The proposed settlement fails to allocate proceeds between the FLSA claims and 2 the state law claims. A hybrid settlement such as this one “must create separate funds for 3 payment of the Rule 23 claims and the FLSA claims[.]” Millan v. Cascade Water Servs., Inc., 4 310 F.R.D. 593, 602 (E.D. Cal. 2015); see also Ohring v. UniSea, Inc., 2023 WL 7413046, at *1

5 (W.D. Wash. Nov. 9, 2023) (“proposed settlement could not be approved because it . . . failed to 6 allocate between the FLSA and [state wage] claims”). 7 (2) The proposed settlement provides a deficient procedure for FLSA opt-in. An 8 FLSA claim may be pursued in collective fashion only by similarly-situated employees who 9 “consent in writing” to become plaintiffs, provided “such consent is filed” with the Court. 29 10 U.S.C. § 216(b). This Court and others have rejected an opt-in procedure triggered by signing the 11 back of a settlement check displaying opt-in language. (See dkt. # 29-1 at 6.) See Ohring, 2023 12 WL 7413046, at *1; Johnson v. Quantum Learning Network, Inc., 2016 WL 8729941, at *1 13 (N.D. Cal. Aug. 12, 2016) (procedure whereby “FLSA collective action members opt in to the 14 collective action by cashing or depositing their settlement checks . . . does not comply with the

15 plain language of the FLSA.”). 16 (3) Plaintiffs have not explained why it is impossible or impracticable to determine 17 each class or collective action member’s actual losses rather than rely on a proxy based on the 18 number of weeks each employee worked. (See dkt. # 29 at 10-11.) Plaintiffs report “Defendants 19 provided comprehensive data with thousands of entries recording the days and hours worked by 20 each putative class member, as well as his or her hourly rate, from which Plaintiff’s counsel 21 could compile a detailed damages model for their claimed overtime damages.” (Id. at 10.) It is 22 unclear why each member’s actual damages could not be determined using this comprehensive 23 data. Plaintiffs must explain why a damages model is appropriate. 1 The parties are ORDERED to provide a joint status report addressing the above-identified 2 issues, either showing cause why the Court should not deny approval of the currently proposed 3 settlement or providing a revised settlement agreement, by July 12, 2024. The Clerk is directed 4 to re-note Plaintiffs’ Motion (dkt. # 29) to July 12, 2024.

5 Dated this 12th day of June, 2024. 6 A 7 MICHELLE L. PETERSON United States Magistrate Judge 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23