Nine-Year California Labor Code Class Action is Settled

San Diego, CAA California labor lawsuit that’s been litigated for nine years and was finally scheduled for trial on February 6, was suddenly settled through an agreement between plaintiffs in the class action and defendant Penske Logistics LLC. The deal is worth $750,000 at face value, but will be trimmed once approved costs and fees are deducted.

The award will drop to $332,500 following deductions of $225,000 for attorneys’ fees, $135,000 in costs, $15,000 each in incentive awards for the three primary class representatives, and about $12,500 in settlement administration costs.

That equates to an average payment of $965.11 per class member in the long-running California labor code lawsuit over meal breaks and rest periods that were allegedly missed. The plaintiffs, however, nonetheless asked US District Judge Cathy Ann Bencivengo on January 24 to sign off on a non-reversionary $750,000 settlement to resolve their claims for meal periods under the California Labor Code and Unfair Competition Law.

“While plaintiffs believe in the merits of their case, they also recognize the inherent risks and uncertainty of litigation and understand the benefit of providing a significant settlement sum now as opposed to risking decertification of their remaining certified claims; and/or an unfavorable result on the merits and/or on an appeal, a process that can take several more years to litigate,” the plaintiffs said in their motion.

It’s been a long road for drivers citing violations of California labor employment law. This past July the judge overseeing the class action lawsuit granted the defendant’s motion to decertify three of the original five subclasses due to a lack of proof, or so Penske claimed, of the existence of any blanket policy that systematically denied workers their rest breaks.

Plaintiffs alleged in their California and labor law class action that Penske failed to offer, or provide rest periods as required under California and labor law. It was also alleged the defendant proceeded to deduct pay for rest periods that were not taken by delivery drivers and Whirlpool appliance installers who reportedly had worked long hours in the field.

“Plaintiffs’ claims involve complex and disputed legal issues and fact-specific arguments which the parties have litigated fiercely since inception of the action,” the plaintiff’s motion further stated. “Plaintiffs firmly believe in the strength of their claims, but Penske also has strong defenses to class liability and damage determinations, some of which may have had a bearing on potential decertification hearings.”

Following decertification of the subclasses last July, the remaining class members asked the judge this week to sign off on the proposed settlement, ending the legal wrangling and avoiding trial.

“That some supervisors at some locations on some shifts may not have complied with the law regarding provision of meal breaks does not constitute a uniform policy for all class members,” Judge Bencivengo said in her ruling. “That defendants did not schedule the employees’ meal breaks into their delivery schedules does not establish that defendants did not provide the opportunity to take a timely meal break. Leaving the decision of when to break to the employee in the field is not the same as prohibiting or discouraging timely meal breaks.”

The California labor lawsuit is Dilts et al. v. Penske Logistics LLC et al, Case No. 3:08-cv-00318, in the US District Court for the Southern District of California.