Rendon v. Infinity Fasteners, Inc.

District Court, E.D. California·Decided April 12, 2023·No. 1:20-cv-01538·Unknown

Opinion

ERIC RENDON, individually on behalf of Case No. 1:20-cv-01538-ADA-BAM himself and all others similarly situated, under the Private Attorney General Act ORDER VACATING HEARING (PAGA), pursuant to Labor Code §§ 2698, et seq., ORDER RE UNOPPOSED MOTION FOR APPROVAL OF SETTLEMENT UNDER Plaintiff, THE CALIFORNIA PRIVATE ATTORNEYS GENERAL ACT OF 2004 v. (“PAGA”) INFINITY FASTENERS, INC., a Kansas (Docs. 34, 41.) Corporation; and DOES 1-50; Defendants.

Plaintiff Eric Rendon (“Plaintiff”) filed suit against Defendant Infinity Fasteners, Inc. (“Defendant”) and DOES 1-50, alleging that they violated California’s Private Attorneys General Act (“PAGA”), Labor Code, Business & Professions Code, and the Fair Employment and Housing Act. (Doc. 1 at 4-39.) The parties reached a settlement, and now before the Court is Plaintiff’s unopposed Motion for Approval of PAGA Settlement. (Docs. 32, 34, 41.) The parties filed a joint consent to magistrate jurisdiction for the limited purpose of deciding the pending Motion for Approval of Settlement Pursuant to PAGA. (Doc. 37.) The Court finds the motion suitable for decision without the need for oral argument. Accordingly, the hearing on the motion currently set for April 21, 2023, is HEREBY VACATED, and the matter is submitted on the record. E.D. Cal. L.R. 230(g). For the reasons discussed below, the Court will grant this motion. A. Procedural History and Claims and Allegations in Operative Pleading Plaintiff initiated this action on June 14, 2020, in Fresno County Superior Court. (Doc. 1 at 4-20.) On April 10, 2020, Plaintiff sent notice of his claims to the California Labor and Workforce Development Agency (“LWDA”). (Doc. 34-5 ¶¶ 3-4, Doc. 34-5, Ex. 1 at 21-24). Plaintiff subsequently sent additional notice to the LWDA on July 10, 2020, 91 days after his first notice. (Doc. 34-5 ¶¶ 3-4, Doc. 34-5, Ex. 2 at 25-29.) The LWDA did not indicate its intent to investigate in response to Plaintiff’s notices. (Doc. 34-5 ¶¶ 3-4.) Plaintiff filed a First Amended Complaint on September 17, 2020. (Doc. 1 at 22-39.) In the operative First Amended Complaint, Plaintiff alleged nine causes of action (both individual claims and PAGA claims) for: (1) Retaliation for complaints of unsafe working conditions pursuant to California Labor Code §§ 6310(a),(c), 2699.5; (2) Retaliation for complaints of illegal activity pursuant to California Labor Code §§ 1102.5(b)(h), 2699.5; (3) Retaliation for complaints of unpaid wages pursuant to California Labor Code §§ 98.6, 2699.5; (4) Withholding of wages pursuant to California Labor Code §§ 222; 225.5, 2699.5; (5) Waiting Time penalties pursuant to California Labor Code §§ 20l, 202, 203, 2699.5; (6) Failure to Reimburse for Travel and Other Expenses pursuant to California Labor Code §§ 2802, 2699.5; (7) Accounting; (8) Unfair Competition Law violations pursuant to California Business & Professions Code §§ 17200 et seq.; and (9) PAGA Civil Penalties pursuant to California Labor Code §§ 2698 et seq. (Id.) More specifically, Plaintiff alleged that Defendant failed to provide clear breakdowns of how commissions were calculated, failed to reimburse him for work-related expenses, and retaliated against him for complaints he made. (Doc. 1 at 23-25; Doc. 34-4 ¶¶ 3-11.) On October 29, 2020, the matter was removed to this Court, and on December 3, 2020, Defendant filed a Motion to Dismiss and Motion to Strike Plaintiff’s First Amended Complaint. (Docs. 1, 7.) The Court granted in part and denied in part Defendant’s Motion to Dismiss and denied Defendant’s Motion to Strike, dismissing Plaintiff’s fourth cause of action for withholding of wages. (Doc. 31.) On January 10, 2023, the parties participated in a court sponsored settlement conference and reached a settlement on Plaintiff’s remaining individual and PAGA claims. (Docs. 32, 33, 34-1.) Plaintiff thereafter filed the current Motion for Approval of PAGA Settlement. (Doc. 34.) On Feb. 10, 2023, the parties filed a joint consent to magistrate jurisdiction for the limited purpose of deciding the pending Motion for Approval of Settlement Pursuant to PAGA. (Doc. 37.) Defendant filed its Statement of Non-Opposition to Plaintiff’s Motion for Approval of PAGA Settlement on February 23, 2023. (Doc. 41.) B. Proposed PAGA Settlement The proposed settlement agreement indicates that Defendant will pay a total settlement sum of $60,000.00 to settle Plaintiff’s individual and PAGA claims. (Doc. 34-1.) This includes a $3,000 PAGA settlement sum and a $57,000 settlement of Plaintiff’s individual claims. (Doc. 34-1 at 5, 12-13.) The PAGA settlement notes that the “PAGA portion of the settlement encompasses two former employees of EMPLOYER, Eric Rendon and Justin Rendon (‘Covered Employees’) in Case Nos. LWDA-CM-796597-20 and LWDA-782649-20.” (Doc. 34-1 at 12.) Plaintiff’s counsel further represents that they did not discover any potentially aggrieved employees beyond those two Covered Employees. (Doc. 34-5 ¶ 17.) From the $3,000 PAGA settlement sum, the two Covered Employees will receive $500, Plaintiff’s counsel will receive $1,000, and the LWDA will receive $1,500. (Doc. 34-1 at 5, 12-13.) In return for the PAGA settlement amount, Plaintiff releases Defendant from any claims for civil penalties that could have been assessed or collected by Plaintiff or the LWDA based on factual allegations of the First Amended Complaint. (Doc. 34-1 at 13.); see Arias v. Superior Court, 46 Cal. 4th 969, 986 (2009) (“In a lawsuit brought under the act, the employee plaintiff represents the same legal right and interest as state labor law enforcement agencies—namely, recovery of civil penalties that otherwise would have been assessed and collected by the Labor Workforce Development Agency.”). However, Plaintiff’s counsel represents that the settlement will not release Defendant from underlying individual claims for violations of the California Labor Code that Covered Employees may have. (Doc. 34-5 ¶ 38.) The settlement states that, “[e]xcept as to the Eric Rendon who is entering into an individual settlement agreement as to his claims, the released claims do not include any underlying individual claims or causes of action the Covered Employees may have, and relief they may seek, against RELEASED PARTIES with respect to violations of the California Labor Code.” (Doc. 34-1 at 13.) No injunctive relief or other non-monetary relief is included in the PAGA settlement. (Doc. 34-1 at 12-13.) The California Legislature enacted the PAGA, codified at California Labor Code §§ 2698 et seq., after finding and declaring: (i) that adequate financing of labor law enforcement was necessary to achieve maximum compliance; (ii) that staffing levels for state labor law enforcement agencies have declined and were unable to keep up with a growing labor market; (iii) that vigorous assessment and collection of civil penalties provides a meaningful deterrent to unlawful conduct; and (iv) that it was therefore in the public interest to allow aggrieved employees, acting as private attorneys general, to seek and recover civil penalties for Labor Code violations. 2003 Cal. Legis. Serv. Ch. 906 (S.B. 796) (WEST). Under the PAGA, an “aggrieved employee” may bring an action for civil penalties for labor code violations on behalf of herself and other current or former employees as the proxy or agent of the state’s labor law enforcement agencies. Cal. Lab. Code § 2699(a); Arias, 46 Cal. 4th at 986; Swain v. Anders Grp., LLC, No. 1:21-cv-00197-SKO, 2022 WL 5250139, at *4–5 (E.D. Cal. Oct. 6, 2022) (“A plaintiff suing under the PAGA “does so as the proxy or agent of the state’s labor law enforcement agencies.”). A representative action under PAGA is not a class action, but rather a “representative action on behalf of the state.” Kim v. Reins Int’l Cal., Inc., 9 Cal. 5th 73, 87 (2020); Almanzar v. Home Depot U.S.A., Inc.,

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Rendon v. Infinity Fasteners, Inc., (E.D. Cal. 2023).

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