United States District Court, S.D. New York
MANUEL A. TRINIDAD, et al., Plaintiffs,
PRET A MANGER (USA) LIMITED, et al., Defendants.
OPINION & ORDER
PAUL A. ENGELMAYER, District Judge.
On September 5, 2014, the Court held a fairness hearing regarding the proposed class action settlement in this case. See Dkt. 133, 134 ("Tr."). Based on the parties' submissions and the helpful and extended colloquy with counsel at that hearing, the Court approves the settlement agreement, subject to the modifications to the service awards and attorneys' fees detailed below.
A. Procedural Background
On August 9, 2012, plaintiffs filed this lawsuit against Pret a Manger (USA) Limited ("Pret"), claiming violations of federal and state wage laws with respect to all 35 then-existing Pret stores in New York City. See Dkt. 1; Tr. 4-5. Plaintiffs sued on behalf of themselves and all similarly situated individuals who worked in any covered position at the 35 Pret stores during the six preceding years. See Dkt. 1. On November 30, 2012, defendants filed an answer. Dkt. 8. In response, on December 27, 2012, plaintiffs filed the First Amended Complaint. Dkt. 15 ("FAC"). The FAC alleges violations by Pret of the Fair Labor Standards Act ("FLSA") and the New York Labor Law ("NYLL"), including failure to fully compensate plaintiffs for all hours worked, failure to pay employees for overtime hours at the required rate, improper tip pooling, and lack of adequate wage statements. FAC ¶¶ 38-45, 51-54.
On January 15, 2013, plaintiffs moved for conditional class certification, Dkt. 17, and filed a supporting memorandum of law, Dkt. 18, and declaration, Dkt. 19. Over the next several weeks, plaintiffs supplemented their submission with affidavits from each of the five named plaintiffs. Dkt. 24, 27, 28, 29, 34. On March 11, 2013, defendants filed an opposition to plaintiffs' class certification motion, Dkt. 35, along with several declarations, Dkt. 36, 37, 38, 39, 40, 41, 44. On April 22, 2013, plaintiffs submitted their reply, Dkt. 51, and multiple reply affidavits, Dkt. 52, 54. After thoroughly reviewing all of the submissions and holding oral argument, the Court issued its opinion and order on July 11, 2013. Dkt. 60. The Court granted conditional class certification as to overtime claims at six Pret stores, but denied the motion as to other claims and other Pret stores. Id.
Discovery in this case consisted of depositions of the five named plaintiffs and of Pret's corporate representative, and substantial document production. See Dkt. 127 at 4. As a result of discovery and the parties' informal sharing of information, plaintiffs refined their claims to focus heavily on so-called "gap time" claims. Specifically, plaintiffs' counsel reported at the fairness hearing that the heart of plaintiffs' case became the claim that Pret had failed to compensate Pret employees for modest increments of time working or preparing for work that fell just before or just after the scheduled start of the work day. Tr. 14. These increments included times when Pret employees were changing into their uniforms, or waiting in line to use the changing room. Tr. 8-9, 12. Plaintiffs' counsel determined, however, that employees had not been compensated for time worked before the start of their officially scheduled shifts. Tr. 8-10. At the same time, plaintiffs' counsel determined, contrary to the claims in the FAC, that few Pret employees had viable overtime claims because most worked only part-time and therefore fewer than 40 hours per week. Tr. 8; see also Tr. 12, 14, 15, 21-22.
In January 2014, after engaging in numerous informal settlement discussions, the parties participated in an 18-hour mediation session. See Dkt. 127 at 4. The parties ultimately reached a resolution at that session and notified the Court of their intent to settle the matter. Dkt. 91. Over the next several weeks, the parties continued to negotiate and to finalize and memorialize the terms and conditions of their settlement agreement.
Before the Court now is plaintiffs' motion for final approval of the class action settlement, Dkt. 125, along with a supporting declaration, Dkt. 126 ("Settlement Decl."), and memorandum of law, Dkt. 127 ("Settlement Br."). In separate motions, plaintiffs request service awards and attorneys' fees. See Dkt. 128, 129 ("Service Award Br."), 130, 131 ("Fee Decl."), 132 ("Fee Br."). The defendants do not oppose these motions. Potential class members have been provided with notice of the proposed settlement; no objections have been received, and 22 potential class members have opted out of the settlement.
For the following reasons, the Court approves the settlement agreement and grants, in part, plaintiffs' requests for service awards and attorneys' fees.
B. Settlement Terms
The settlement agreement provides that Pret shall pay $910, 000 to the class. Settlement Br. 5. Attorneys' fees and costs, individual service awards, and costs generated by the claims administration process are to be paid out of this $910, 000, subject to the Court's approval of those fees and costs. Id.
After these deductions, the remaining sum - the "Net Settlement Fund" - will be distributed to claimants who worked at the 35 Pret stores in New York City at any time between August 9, 2006, and March 28, 2014. Id. The Net Settlement Fund will be allocated as follows: First, each qualified class member who worked for Pret for one week or less will receive $5. Settlement Br. 6. The parties estimate that 500 of the 4, 119 class members worked at Pret for one week or less and therefore will receive a $5 award. Tr. 45-46, 51. Second, each qualified class member who worked at Pret for more than one week will receive a share of the remaining Net Settlement Amount proportionate to the number of weeks he or she worked during the relevant time period. Settlement Br. 6-7. Counsel anticipates that these class members will each receive approximately $4.50 for each week they worked at Pret, Tr. 28, such that individuals employed for the entire time period will receive as much as $1, 900, Tr. 51. In light of the deductions the Court approves herein, the average class member will receive around $174.
In return, all class members who have not opted out will release all of their wage and hour claims and other labor claims under federal, state, and local law - including related claims for attorneys' fees and costs - against the defendants and their affiliates. Settlement Br. 6-7. Any unclaimed funds will go to City Harvest, a charitable organization that has a long-standing relationship with Pret. See Tr. 49.
A. Certification of the Settlement Class
For the Court to finalize the settlement, the class must satisfy the prerequisites for certification under Federal Rule of Civil Procedure 23(a) and 23(b)(3).
1. Compliance with Federal Rule of Civil Procedure 23(a)
Under Rule 23(a), one or more members of a class may sue as representative parties on behalf of all members only if the requirements of (1) numerosity, (2) commonality, (3) typicality, and (4) adequacy are all met. See, e.g., Wal-Mart Stores, Inc. v. Dukes, 131 S.Ct. 2541, 2550 (2011).
The class here is defined as "all current and former employees of Pret who worked for Pret in New York City as a team member... or any other non-exempt, non-management store position at any time from August 9, 2006 to... March 28, 2014." Settlement Br. 5. The numerosity requirement is met where the class is so large that joinder of all members would be impracticable. Here, the class consists of 4, 119 members. This number would make joinder impracticable. See, e.g., Robidoux v. Celani, 987 F.2d 931, 936 (2d Cir. 1993) (proposed class with approximately 100 members satisfied numerosity requirement). The Court therefore finds the numerosity requirement satisfied.
The commonality and typicality requirements demand that there be questions of law or fact common to the class and that the claims of the representative parties be typical of the class's claims. See, e.g., Marisol A. v. Giuliani, 126 F.3d 372, 376 (2d Cir. 1997). All class members here were allegedly subject to common conduct by Pret. Specifically, plaintiffs allege that all Pret stores, per a common policy, paid employees only for scheduled hours; Pret therefore systematically failed to pay employees for "gap time" spent working outside of their scheduled shifts. See Tr. 16-20. Pret, for its part, does not contend that it ever instructed its stores to pay employees for "gap time." Tr. 20. Therefore, although practices such as tip-pooling may have differed by store, there appears to have been a common policy of not compensating employees for "gap-time" work that affected each of the class members similarly. The Court therefore finds that the commonality and typicality requirements are met.
Finally, the adequacy requirement is met where the representative parties will fairly and adequately represent the interests of the class. See, e.g., Shahriar v. Smith & Wollensky Rest. Grp., Inc., 659 F.3d 234, 253 (2d Cir. 2011). There are no known conflicts between the class representatives here and any class members, and the class is represented by counsel with experience and competence in both class action and employment litigation. Therefore, the Court finds that this requirement is also met.
2. Compliance with Federal Rule of Civil Procedure 23(b)(3)
Having found Rule 23(a) satisfied, the Court considers whether one of the three prongs of Rule 23(b) applies. Most relevant here is the third prong, "that questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy." This rule is designed to "achieve economies of time, effort, and expense, and promote... uniformity of decision as to persons similarly situated." Amchem Products v. Windsor, 521 U.S. 591, 615 (1997) (citation omitted) (alteration in original).
Here, there are many questions of law and fact common to the class members, including whether the defendants employed them within the meaning of New York law, whether Pret maintained a policy of compensating employees only for scheduled hours and not "gap time, " and whether Pret stores systematically failed to compensate employees for ...