Eisenacher v. VITAS HOSPICE SERVICES, LLC

• Court: District Court, N.D. California
• Decided: April 2, 2021
• Docket: 3:20-cv-04948
• Status: Unknown

Opinion

1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 NORTHERN DISTRICT OF CALIFORNIA 9 KRISTINA EISENACHER, 10 Case No. 20-cv-04948-RS Plaintiff, 11 v. ORDER APPROVING PAGA 12 SETTLEMENT VITAS HOSPICE SERVICES, LLC, et al., 13 Defendants. 14

15 I. INTRODUCTION 16 Plaintiff Kristina Eisenacher alleges her former employer, Defendant VITAS Hospice 17 Services, LLC (“VITAS”), created unsafe working conditions by forcing its sales representatives 18 to continue making in-person visits to hospitals and other medical facilities in violation of shelter- 19 in-place orders and subsequently retaliated against her when she complained. The parties now 20 jointly seek approval of their settlement under the Labor Code Private Attorneys General Act of 21 2004 (“PAGA”), codified at California Labor Code § 2698 et seq. Because the terms are fair, 22 reasonable, and adequate, the settlement is approved. 23 II. BACKGROUND 24 The parties have agreed to a gross settlement amount of $236,993.27, which includes (1) 25 $20,000 in PAGA penalties, (2) a net settlement amount to Plaintiff in the amount of $177,964.14, 26 and (3) $39,029.13 in attorneys’ fees and costs, including the cost to distribute the PAGA fund. 27 The parties have also agreed to ten non-monetary COVID-19 safety protocols. VITAS must (1) 1 continue to provide intra-office safety protocols to reduce the risk of COVID-19 spread, (3) 2 continue the use of safety protocols related to in-person sales to decrease the risk of COVID-19 3 spread, (4) continue to provide COVID-19 testing to employees who come into contact with the 4 virus, (5) continue to require employees to report positive tests, (6) continue to perform contract 5 tracing among employees, (7) continue to require that all employees follow facility policies to 6 create a culture that respects the facilities’ focus on protecting patients and staff, (8) provide an 7 additional two weeks of paid time off for all employees, including those who have contracted 8 COVID-19, (9) continue to provide reasonable work-from-home accommodations for sales 9 representatives who present a disability or medical issue unless there is an undue hardship, and 10 (10) continue to allow virtual communications to count towards call quotas while the COVID-19 11 public health orders are in place. 12 Seventy-five percent of the PAGA settlement will be distributed to the state of California 13 and the remaining quarter will be distributed among aggrieved employees. “Aggrieved 14 employees” are defined in the Settlement Agreement (“SA”) as “all current and former sales 15 representatives who were employed by Defendants in California at any time during the period 16 from March 12, 2020 through January 31, 2021.” Motion (“Mot.”) at 6; SA ¶ A(c). Plaintiff 17 recommends an even distribution of the PAGA settlement amount between the aggrieved 18 employees, which nets approximately $44.64 over 112 employees. 19 Pursuant to the settlement, aggrieved employees release claims for civil penalties 20 recoverable under PAGA. The Settlement Agreement does not, however, “otherwise cover 21 individual, underlying claims or causes of action that Aggrieved Employees may have under the 22 law.” SA ¶ C(2). Plaintiff, individually, has agreed to release any and all claims, including 23 unknown claims, that she may have against VITAS as of the Effective Date. She has further 24 agreed not to participate in any class, collective, or enforcement action. Included with the 25 aggrieved employee distribution will be a notice letter explaining the terms of the settlement and 26 the scope of the release. The letter makes clear that though aggrieved employees may not bring 27 subsequent PAGA actions, they retain the right to initiate private suits. 1 III. LEGAL STANDARD 2 A plaintiff suing under PAGA “does so as the proxy or agent of the state’s labor law 3 enforcement agencies.” Arias v. Superior Court, 46 Cal. 4th 969, 986 (2009). Accordingly, a 4 judgment in a PAGA action binds not only the plaintiff, but also the government and nonparty 5 aggrieved employees. Id. at 985; see also Iskanian v. CLS Transp. L.A., LLC, 59 Cal. 4th 348, 380 6 (2014). Under PAGA, a trial court must review and approve any settlement of PAGA claims. Cal. 7 Lab. Code § 2699(l)(2). Additionally, the proposed settlement must be submitted simultaneously 8 to the California Labor and Workforce Development Agency (“LWDA”). Id. 9 “[N]either the California legislature, nor the California Supreme Court, nor the California 10 Courts of Appeal, nor the [LWDA] has provided any definitive answer” to the “vexing” question 11 of what standard of approval ought to be applied to PAGA settlements. Flores v. Starwood Hotels 12 & Resorts Worldwide, Inc., 253 F.Supp.3d 1074, 1075 (N.D. Cal 2017). Nonetheless, courts 13 routinely approve PAGA settlements if (1) the statutory requirements set forth by PAGA have 14 been satisfied, and (2) the settlement agreement is fair, reasonable, and adequate in view of 15 PAGA’s public policy goals. See Rincon v. West Coast Tomato Growers, LLC, 2018 WL 828104, 16 at *2 (S.D. Cal. Feb. 12, 2018). Courts employ the relevant Hanlon factors, as set out by the Ninth 17 Circuit in the class action settlement context, to gauge the fairness, reasonableness, and adequacy 18 of a proposed PAGA settlement. Id. at *2 (citing Hanlon v. Chrysler Corp., 150 F.3d 1011, 1026 19 (9th Cir. 1998)). These factors are evaluated in light of PAGA’s public policy goals of 20 “benefit[ing] the public by augmenting the state’s enforcement capabilities, encouraging 21 compliance with Labor Code provisions, and deterring noncompliance.” O'Connor v. Uber Techs. 22 Inc., 201 F.Supp.3d 1110, 1132-33 (N.D. Cal. 2016). 23 IV. DISCUSSION 24 Both the Hanlon factors and PAGA’s public policy goals support approval of the 25 settlement.1 Plaintiff admits that proceeding with litigation would be risky because of the high 26

27 1 At the hearing, counsel for Plaintiff indicated that though the LWDA and the California Division of Occupational Safety and Health were notified of the settlement and hearing date as required, the 1 number of employees and their varying experiences with VITAS’s policies, locations, and 2 managers. See Cardenas v. McLane Foodservice, Inc., 2011 WL 379413, at *3 (C.D. Cal. Jan. 31, 3 || 2011) (‘Given the statutory language [of PAGA], a plaintiff cannot recover on behalf of 4 || individuals whom the plaintiff has not proven suffered a violation of the Labor Code by the 5 defendant.”). Moreover, the effects of COVID-19 on worker safety present novel legal questions 6 || requiring speedy resolution. Ongoing litigation would not only be expensive and complex, but it 7 would likely delay or obviate the need for urgent COVID-19 policy changes. Because $20,000 is 8 || both within the range of reasonableness and large enough to serve as a deterrent to “encourage[e] 9 compliance with Labor Code provisions,” it is approved. See O’Connor, 201 F.Supp.3d at 1132- 10 || 33. 11 V. CONCLUSION 12 For the reasons set forth above, the PAGA settlement is approved.

|) 1, ISSO ORDERED.

a 16 || Dated: April 2, 2021

RICHARD SEEBORG Z 18 Chief United States District Judge 19 20 21 22 23 24 25 26 27 agencies declined to intervene or appear. 28 ORDER APPROVING PAGA SETTLEMENT CASE No. 20-cv-04948-RS