UNITED STATES DISTRICT COURT

Transcription

1 Case 5:16-cv JGB-KK Document 86-1 Filed 11/06/17 Page 1 of 67 Page ID #: Edwin Aiwazian (Cal. State Bar No ) edwin@lfjpc.com Arby Aiwazian (Cal. State Bar No ) arby@lfjpc.com L A W Y E R S for J U S T I C E, PC 410 West Arden Avenue, Suite 203 Glendale, California Tel: (818) / Fax: (818) Heather Davis (Cal. State Bar No ) heather@protectionlawgroup.com PROTECTION LAW GROUP LLP 136 Main Street, Suite A El Segundo, California Tel: (424) / Fax: (866) Attorneys for Plaintiffs UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA DERRICK BYRD; RANDY MAUNAKEA, individually, and on behalf of other members of the general public similarly situated and on behalf of other aggrieved employees pursuant to the California Private Attorneys General Act, vs. Plaintiff, MASONITE CORPORATION, an unknown business entity; and DOES 1 through 100, inclusive, Defendants. Case No.: 5:16-cv JGBKK DECLARATION OF HEATHER DAIVS ISO PLAINTIFFS MOTION AND MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT Judge: Hon. Jesus G. Bernal Date: December 11, 2017 Time: 9:00 a.m. Courtroom.: 1 Complaint Filed: November 17, 2015 FAC Filed: March 18, DECLARATION OF HEATHER DAVIS ISO PLAINTIFFS MOTION FOR PRELIMINARY APPROVAL

2 Case 5:16-cv JGB-KK Document 86-1 Filed 11/06/17 Page 2 of 67 Page ID #: DECLARATION OF HEATHER M. DAVIS, ESQ. I, Heather M. Davis, declare as follows: 1. I am an attorney duly licensed to practice law before all courts of the State of California and all United States District Courts in the State of California. I am a partner of the Protection Law Group, LLP, attorneys of record for named Plaintiffs Randy Maunakea and Derrick Byrd. I have personal knowledge of the facts stated herein and if called as a witness I could and would competently testify thereto. 2. I am a duly licensed attorney and have been a member of the Colorado State Bar since 1998, the California State Bar since 2005 and the Arizona State Bar since I graduated from the University of Denver School of Law in 1998 and I am licensed to practice before all courts of the State of California and Colorado as well as the State of Arizona and District Courts throughout the country. CLASS COUNSEL S BACKGROUND AND EXPERIENCE 3. Prior to opening my law firm, I developed particular experience in the area of wage and hour litigation. For instance, between 2007 and 2013, I joined the law firm of Littler Mendelson, P.C., the largest labor and employment law firm in the United States 4. During my employment with Littler Mendelson, P.C., I continued my practice of employment law and was responsible for and defended dozens of complex class actions involving some of the largest representative and class actions brought under the California Labor Code, including meal and rest break violations, overtime, minimum wage claims, off the clock work and other related wage claims. My practice included the management of dozens of class actions. My management of these cases included taking and defending hundreds of depositions, interviewing hundreds of putative class members, as well as extensive state, federal and appellate briefing on hundreds of wage and hour issues involving class actions. 5. During my employment at Littler Mendelson, I played a significant DECLARATION OF HEATHER DAVIS ISO PLAINTIFFS MOTION FOR PRELIMINARY APPROVAL- 2

3 Case 5:16-cv JGB-KK Document 86-1 Filed 11/06/17 Page 3 of 67 Page ID #: role in the class actions for which I was responsible. In particular, I was often in charge of leading the strategy of the cases and drafting all of the briefs. I received a wide-array of wage and hour class action experience performing the following types of tasks: drafting demurrers; motions to strike and/or dismiss; removing actions from state court to federal court; drafting and responding to written discovery; drafting and opposing discovery related motions; arguing discovery related motions; drafting motions to consolidate related matters; interviewing putative class members and obtaining declarations in connection with class certification; drafting oppositions to motions for class certification; drafting motions for decertification following class certification; conducting exposure analyses to assess the strengths and weaknesses of asserted claims, the likelihood of prevailing at class certification and potential damages resulting from such claims; drafting mediation briefs; serving as the primary contact to in-house counsel; deposing named plaintiffs and putative class members; deposing retained expert witnesses; and defending the depositions of corporate witnesses. In short, I played an integral role in all aspects of litigation from the inception of a matter through and beyond class certification. 6. During my practice in other jurisdictions and continuing today, I have been primarily devoted to working in employment law and on complex class action and representative litigation and multi-plaintiff work. 7. Protection Law Group LLP is a law firm specifically devoted to the representation of employees against Employers in California involving claims relating to violations of the California Labor Code, including claims for failure to pay all wage s owed, failure to pay overtime premiums, failure to ay meal and rest premiums and failure to provide accurate wage records. The practice of employment law is a very specific, narrow field which requires diligence in an ever-evolving field of substantive and procedural law. 8. Although not exhaustive, below is a representative list of several of the wage and hour class actions that I performed substantial work on while I was an attorney with Littler Mendelson, including, but not limited to: Villacres v. ABM DECLARATION OF HEATHER DAVIS ISO PLAINTIFFS MOTION FOR PRELIMINARY APPROVAL- 3

4 Case 5:16-cv JGB-KK Document 86-1 Filed 11/06/17 Page 4 of 67 Page ID #: Industries, Inc., 189 Cal.App.4th 562 (2010); Brizuela v. Copart, Inc., CIVRS , (San Bernardino Superior Court class action settlement); Augustus v. ABM Industries, Inc., BC336416, 233 Cal.App.4th 1065 (2014), review granted; Tagaki v. United Airlines, 2:11-CV9191 (Central District class action settlement), Babasa v. Comerica, Inc., 3:11-CV00595, Leyva v. Medline Industries, Inc. 5:11-cv (Central District), Blue v. Coldwell Banker Residential Brokerage Co., BC417335, (Los Angeles Superior Court, class action settlement), and Acosta v. Texwood Industries, Inc., 2:07-cv DDP-PLA (Central District class action settlement). 9. Since opening my firm, I have served as lead counsel or co-class counsel in several wage and hour class and/or representative actions seeking wages and penalties owed on behalf of employees including, but not limited to the following: a. Morera v. Continental Assets Mgmt., BC502003, (Los Angeles Superior Court wage and hour Class action appointing Protection Law Group, LLP as class counsel in settlement); b. Fong et al. v. Regis Corporation, 3:13-cv VC, (United States District Court, Northern District of California, preliminarily approving 5.75 Million wage and hour class action settlement and appointment Protection Law Group, LLP as class counsel in settlement); c. Espinoza v. Financial Partners Credit Union, BC (Los Angeles Superior Court wage and hour Class action appointing Protection Law Group, LLP as class counsel in settlement); d. Kesheshian, et al v. S. Cal. Logistics, BC (Los Angeles Superior Court wage and hour class action appointing Protection Law Group as Class Counsel in settlement) e. Sampson v. 24 HR Homecare LLC, BC (Los Angeles County Superior Court wage and hour class action appointing Protection Law Group as Class Counsel in settlement). DECLARATION OF HEATHER DAVIS ISO PLAINTIFFS MOTION FOR PRELIMINARY APPROVAL- 4

5 Case 5:16-cv JGB-KK Document 86-1 Filed 11/06/17 Page 5 of 67 Page ID #: f. Kashanian v. Plus Labs Inc cv (Santa Clara Superior Court wage and hour class action appointing Protection Law Group, LLP as class counsel in settlement) g. Abdelaziz v. Auto Rescue, RIC (Riverside Superior Court wage and hour class action appointing Protection Law Group LLP as class counsel in settlement); h. Eiden v. Olive & June LLC, BC (Los Angeles Superior Court wage and hour class action appointing Protection Law Group LLP as class counsel in settlement) i. Khan v. FPI Management, Inc., BC (Los Angeles Superior Court wage and hour class action) j. Cadena v. Tetra Property Management, (Tulare County Superior Court wage and hour class action) k. Glenn v. Decron Properties Corp., BCC (Los Angeles Superior Court wage and hour class action); l. Holzer v. Wedbush Securities, Inc., BC (Los Angeles Superior Court wage and hour class action); m. Utterbach v. Daylight Transport LLC, BC (Los Angeles Superior Court wage and hour class action); n. Hadrick v. Woodmont Real Estate, CIV (San Mateo Superior Court wage and hour class action) 10. In addition, LAWYERS for JUSTICE, P.C. also represented Plaintiffs and the class in this case and devoted substantial time toward this litigation. LAWYERS for JUSTICE, P.C is law firm devoted exclusively to the representation of employees in class-wide employment disputes. There are no conflicts of interest between class counsel and the settlement class members. PROCEDURAL HISTORY AND FACTUAL BACKGROUND 11. Defendant Masonite Corp. (Defendant) is a manufacturer and merchandiser of interior and exterior doors, door components, and entry systems. DECLARATION OF HEATHER DAVIS ISO PLAINTIFFS MOTION FOR PRELIMINARY APPROVAL- 5

6 Case 5:16-cv JGB-KK Document 86-1 Filed 11/06/17 Page 6 of 67 Page ID #: Among its customers are distributors, jobbers, home center chains, and wholesale and building supply dealers in North, Central, and South America, Ireland, the United Kingdom, Israel, Europe, and Asia. Defendant lauds itself as one of the largest manufacturers of doors in the world, and operates four (4) plants in the State of California and additional plants throughout the country. 12. Plaintiffs Derrick Byrd and Randy Maunakea are former Masonite employees. Derrick Byrd worked for Masonite from approximately March 2013 to October 2014 as an hourly-paid Assembler. Randy Maunakea worked for Masonite building doors from approximately November 2013 to May Both Mr. Byrd and Mr. Maunakea worked at Masonite s plant in Moreno Valley, California. 13. On November 17, 2015, Plaintiff Byrd filed a Complaint in the Superior Court of California, County of Riverside. The complaint alleged violations of the following provisions of California law: (1) failure to pay overtime pursuant to Labor Code sections 510 and 1198; (2) failure to provide meal period premiums in violation of Labor Code sections and 512(a); (3) failure to provide rest period premiums in violation of Labor Code section 226.7; (4) failure to pay minimum wages pursuant to Labor Code sections 1194, 1197, and ; (5) failure to pay timely wages upon termination in violation of Labor Code sections 201 and 202; (6) failure to provide accurate and itemized wage statements in violation of Labor Code section 226(a); (7) failure to reimburse business expenses in violation of Labor Code sections 2800 and 2802; (8) violations of California Business and Professions Code et seq.; and (9) violation of section 2698, et seq., of the Labor Code (the Private Attorney General s Act (PAGA)); on behalf of all current and former hourly-paid or non-exempt individuals employed by Defendant within the State of California at any time during the period from November 17, 2011 to July 14, On January 6, 2017, Defendant removed this action to United States District Court for the Central District of California. 15. After several motions to dismiss by Defendant and the re-filing of DECLARATION OF HEATHER DAVIS ISO PLAINTIFFS MOTION FOR PRELIMINARY APPROVAL- 6

7 Case 5:16-cv JGB-KK Document 86-1 Filed 11/06/17 Page 7 of 67 Page ID #: amended complaints by Plaintiffs, Defendant filed its answer on August 12, While litigating these disputes Plaintiff began to engage in discovery. On March 29, 2016, Plaintiff served Defendant requests for admission, special interrogatories, and requests for production. Defendant responded to this discovery on May 11, Thereafter, the parties met and conferred extensively and on July 7, 2016, Defendant provided a supplemental production of documents. 17. Multiple depositions were taken in this matter. On June 28, 2016, Defendant took Plaintiff s deposition. On July 14-15, 2016, I took the deposition of Defendants Persons Most Qualified, Human Resources Director Anna Kubickova and Payroll Supervisor Jamie Ziegler. Following these depositions, my office served additional document demands in August During initial discovery, Defendant attempted to limit the scope of Plaintiff s inquiry to a single location worked at by the named Plaintiff. Defendant objected to providing any documents or evidence outside the Moreno Valley location 19. On August 29, 2016, the Court ordered that discovery proceed on a class-wide basis for all California locations. 20. In September and October 2016, Defendant produced an additional 7,000 pages of documents including a 20% sampling of time and payroll records and class-wide policy documents. In January 2017, Defendant produced a 20% sampling of earning statements for its Stockton location. 21. Also in September 2016, Plaintiff Randy Maunakea filed a letter with the California Labor and Workforce Development Agency to bring claims under the Private Attorney General s Act after Defendant contended that Plaintiff Byrd s claim was outside the statute of limitations. The LWDA did not respond after 60 days and on November 28, 2016, Plaintiff filed a third amended complaint adding Plaintiff Maunakea as a class and PAGA representative. 22. On January 17, 2017, the parties attended private mediation with Mark Rudy. Defendant produced a class-wide sampling of payroll and timekeeping data for approximately 20% of the putative class in addition to the data formally DECLARATION OF HEATHER DAVIS ISO PLAINTIFFS MOTION FOR PRELIMINARY APPROVAL- 7

8 Case 5:16-cv JGB-KK Document 86-1 Filed 11/06/17 Page 8 of 67 Page ID #: produced in discovery. However, the data was in a state of disarray and in order to prepare for the mediation, Plaintiffs were required to hire an outside consultant to assimilate all of the data in readable forms and determine the scope. 23. In conjunction with an outside consultant, my office analyzed the class-wide time and payroll data in preparation for mediation and also reviewed approximately 8,000 pages of policies, work schedules, time records and payroll records formally produced by Defendant prior to mediation. 24. Prior to mediation my office attempted to contact approximately 200 members of the putative class. 25. While the parties were unable to resolve this matter at the January mediation, on January 24, 2017, the parties agreed to stay formal discovery while negotiations continued. 26. In March 2017, the parties resumed formal discovery. Plaintiffs served deposition notices for approximately 25 employees who had provided declarations in support of Defendant s position, re-noticed the deposition of Defendant s Person Most Knowledgeable, and drafted a motion to compel further testimony which Plaintiffs intended to file with the Court. Plaintiff also resumed the process of meeting and conferring with Defendant regarding its responses to Plaintiffs third set of document requests and a motion to compel would likely have been required as both parties were adamant in their positions. 27. On April 21, 2017, the parties agreed to attend another session of mediation with Mark Rudy. At the conclusion of a second full day of meditation, the parties were able to reach a settlement and executed a Memorandum of Understanding. A long form settlement agreement was eventually signed on August 2, 2017, and my office advised the Court of the agreed upon settlement on August 11, The long form settlement agreement, was based on the understanding that there were approximately 700 putative class members and 100,000 workweeks. 28. However, shortly thereafter, I was contacted by Defendant s counsel and informed that after reviewing the class data, Defendant had determined that as DECLARATION OF HEATHER DAVIS ISO PLAINTIFFS MOTION FOR PRELIMINARY APPROVAL- 8

9 Case 5:16-cv JGB-KK Document 86-1 Filed 11/06/17 Page 9 of 67 Page ID #: of May 14, 2017, there were approximately 119 more class members than originally estimated and an additional 10,243 workweeks. After review, Defendant discovered that there were in fact 836 putative class members and 114,209 workweeks in the class period. 29. Because of this increase in workweeks exceeded 100,000, pursuant to the terms of the Joint Stipulation and Settlement Agreement, Plaintiffs had the right to rescind the Agreement. However, the Agreement also required that the parties meet and confer in good faith to determine whether an upward pro rata Adjustment of the Gross Settlement Amount was warranted. Based upon my review and analysis of supplemental data which confirmed that there were an additional 10,243 workweeks, I met and conferred with Defendant s counsel about increasing the settlement amount. After serious negotiations the parties agreed that a pro rata increase, as contemplated in the Joint Settlement Agreement, was warranted. Therefore, based on the additional increase in workweeks, the parties executed an addendum to the Joint Stipulation of Class Action Settlement and PAGA Release to increase the Gross Settlement Amount by $100,000, from $2,425, to $2,525, SUMMARY OF THE TERMS OF SETTLEMENT 30. Plaintiffs Derrick Byrd and Randy Maunakea ( Named Plaintiffs ) seek preliminary approval of the proposed class action settlement. Attached hereto as Exhibit A is a true and correct copy of the parties Joint Stipulation of Settlement and Release (hereinafter Settlement Agreement or Agreement ). Attached hereto as Exhibit B is a true and correct copy of the proposed Addendum to Joint Stipulation of Class Action and PAGA Settlement and Release (hereinafter Addendum ). Attached hereto as Exhibit C is a true and correct copy of the proposed Notice of Class Action Settlement. 31. Named Plaintiffs seek to provisionally certify the following class for settlement purposes, which consists of approximately 836 current and former nonexempt employees employed by Defendant in the state of California from November 17, 2011 to July 14, (Agreement 6; Addendum 3:13-14) DECLARATION OF HEATHER DAVIS ISO PLAINTIFFS MOTION FOR PRELIMINARY APPROVAL- 9

10 Case 5:16-cv JGB-KK Document 86-1 Filed 11/06/17 Page 10 of 67 Page ID #: Subject to Court approval, Named Plaintiffs and Defendant Masonite ( Defendant ) have agreed to settle the class claims for the Gross Settlement Amount of $2,525, (Agreement, 13 Addendum 3:19-23). 33. The Gross Settlement Amount allocations are as follows: a. Attorneys Fees in an amount of thirty-five percent (35%) of the Class Settlement Amount, amounting to $883, (Agreement. 3; Addendum 3:19-23); b. Attorneys Costs, according to proof, not more than $65, Id.; c. The Settlement Administration Costs, for work to be performed by Simpluris, estimated to be $15,000 (Agreement. 29); d. The Class Representative Enhancement Payments to Named Plaintiffs in the amount of $5, each (Agreement 36(b)); e. The PAGA Payment in the amount of $37, which is 75% of the PAGA Settlement Amount of $50,000.00; the remaining 25% will be distributed to the Settlement Class as part of the Net Settlement Amount (Agreement 38(a)); and f. Net Settlement Amount of $1,513, (See Agreement 15) 34. The Net Settlement Amount shall be distributed to the Settlement Class Members on a pro-rata basis based on the number of Workweeks worked during the Class Period. (Agreement 42). There are an estimated 114,209 workweeks for the Class Members included in the settlement, the estimated average payment per work week is $ (See Addendum 3:13-14) The estimated average payment to each Settlement Class Member will vary based on the number of workweeks the member worked, but assuming an equal number of workweeks across the class would provide an average settlement payment of $1, This proposed Settlement resolves all of the Settlement Class Members claims against Defendants arising from the same facts and claims alleged in the complaint. (Agreement 23). 36. The proposed settlement will release all claims by the Named DECLARATION OF HEATHER DAVIS ISO PLAINTIFFS MOTION FOR PRELIMINARY APPROVAL- 10

11 Case 5:16-cv JGB-KK Document 86-1 Filed 11/06/17 Page 11 of 67 Page ID #: Plaintiffs against Defendant. (Agreement 36(b)). This expanded general release, the work undertaken by Plaintiffs Byrd and Maunakea, and the exposure of serving as class representatives support the granting incentive payments of $5,000 to each Plaintiff. This payment does not bestow preferential treatment. These efforts will be fully briefed in the motion for final approval. THE SETTLEMENT IS REASONABLE 37. This proposed settlement resolves hotly disputed claims. Defendant vehemently denied and opposed Plaintiffs allegations and maintained that at all times it complied with California law. Regarding the unpaid overtime and minimum wage claims Defendant argued that employees were alerted by a bell system when they were supposed to clock-in and clock-out and that claims involving unpaid workhouse would require an individualized inquiry. Defendant also maintained nearly a dozen varying practices and procedures regarding its rounding policy that increased the difficulty of establishing a uniform policy. Defendant had ultimately changed the policy and practice for doing so on several occasions at several different locations. Therefore, it argued that there was no uniform policy or practice of its rounding practice. With respect to the meal period claims, although there was a period when Defendant s automatically deducted employee meal periods, this ceased in April 2013, and in June 2015, Defendant updated their employee handbook and implemented a facially compliant policy. Similarly, Defendant updated its rest period policy in June 2015 and that even prior to this it properly provided compliant rest breaks and that as they were not required to maintain records Plaintiff would not be able to certify this claim. Further, Defendant maintained that it properly reimbursed employees up to $60 per year for safety shoes and provided other work-related equipment free of charge. These potential defenses and changes in company policy limited the damages of these claims and also limited the potential liability for the associated waiting time penalties. 38. Limited participation by the class members also hindered the prosecution of these claims. Although my office contacted more than 200 class DECLARATION OF HEATHER DAVIS ISO PLAINTIFFS MOTION FOR PRELIMINARY APPROVAL- 11

12 Case 5:16-cv JGB-KK Document 86-1 Filed 11/06/17 Page 12 of 67 Page ID #: members, many of the current employees at Masonite were unwilling to participate in support of these claims for fear of retaliation. Defendant was also able to obtain declarations from approximately 25 class members in support of its defenses whom my office would have been forced to depose. 39. Additionally, although the parties had engaged in significant formal and informal discovery and class-wide data analysis, significant costs and expenses associated remained. Plaintiffs intended to depose each of the approximately 25 class members from which Defendant obtained declarations. Plaintiffs also had outstanding discovery issues with respect the deposition of Defendant s Person Most Qualified and the parties had already prepared a Joint Stipulation Regarding Plaintiffs Motion to Compel Depositions. Moreover, preparation for class certification and trial remained for the parties as well as the prospect of appeals in the wake of a disputed class certification ruling for Plaintiffs. As a result, the parties would incur considerably more attorneys' fees and costs through trial. 40. This proposed class action settlement provides a significant monetary recovery for the settlement class in the face of hotly disputed claims. Regarding the overtime claim, Plaintiffs data analysis revealed that the putative class members worked an average of 1 hour of overtime per week. According to Plaintiffs calculations, the average hourly rate was $ Defendants underpaid overtime wages to the putative class by approximately $712,750, calculated as follows: $14,25 hourly wage* 0.5 OT Premium* 100,000 OT hours= $712,750 underpaid OT Taking into account the risk involved with class certification, and the defenses raised as to whether individual issues predominated, this amount was reduced by 50% probability of prevailing on the merits and certification for a total of $356, For Plaintiffs minimum wage claims, the same issues presented themselves regarding whether Defendant s rounding practices could be proven at the certification stage and/or merits stage. Specifically, based on the records presented, it appeared that Defendants had reduced the pay for employees based DECLARATION OF HEATHER DAVIS ISO PLAINTIFFS MOTION FOR PRELIMINARY APPROVAL- 12

13 Case 5:16-cv JGB-KK Document 86-1 Filed 11/06/17 Page 13 of 67 Page ID #: on time shaving for a period of time during the class period; however, the practice varied from location to location and changed several times throughout the class period. Nevertheless, Plaintiffs estimated if they had been able to fully recover for their claims on failing to pay minimum wages the total recovery would be approximately $900,000. Taking into account the same risks presented for the overtime claim, this estimated recovery was reduced by 50% probability of prevailing on the merits and certification for a total of $450, With respect to the meal period claim, prior to March 2013, Defendant engaged in an auto-deduct policy that automatically deducted lunch periods from employees. Plaintiffs assumed a 95% violation rate during this period. After ceasing this practice, Plaintiffs analysis revealed meal breaks were taken late or not at all approximately 37% of the shifts. Based on this data, Plaintiffs estimate there were approximately 47,541 missed or late meal periods. Based on an average hourly rate of pay of $14.25 for non-exempt employees Plaintiffs calculated Masonite s maximum potential rest period exposure as follows: 47,541 meal period violations* $14.25 meal period premium payment= $677, Taking into account Masonite s argument that meal periods were made available to nonexempt employees, and that any missed meal periods were the result of individual choices rather than a company-wide practice, Plaintiff s discounted these potential damages 50% for a risk of non-certification and by an additional 50% on the merits for a risk of approximately $169,364.81in potential exposure. 43. With respect to the rest period claim, Defendant failed to produce a compliant rest period policy until June Although the rest period policy stated that employees were entitled to breaks, Plaintiffs assumed a mere 50% compliance in accordance with legally required rest periods. Based on the shift data provided by Defendant Plaintiffs estimated approximately 71,721 violations. Based on an average hourly rate of pay of $14.25 for non-exempt employees Plaintiffs calculated Masonite s maximum potential rest period exposure as follows: 71,721 rest period violations* $14.25 rest period penalty payment= $1,022,024. However, Defendant contended that Plaintiffs would face DECLARATION OF HEATHER DAVIS ISO PLAINTIFFS MOTION FOR PRELIMINARY APPROVAL- 13

14 Case 5:16-cv JGB-KK Document 86-1 Filed 11/06/17 Page 14 of 67 Page ID #: serious difficulty in both certifying this claim and in proving the attendant damages, particularly given that it was not required to keep records of rest periods. For these reasons and other risks in certifying the claim Plaintiffs discounted the potential for this recovery by 50% and for an additional 50% for risks related to proceeding on the merits. This led to a total value of $255, With respect to the waiting time penalty claim, Masonite s records confirmed that there were 243 former non-exempt employees in the putative class who separated their employment with Masonite within the three years immediately preceding the filing of the Complaint. Based on an average hourly rate of pay of $14.25, Plaintiffs estimated the average waiting time penalty per employee to be approximately $3,420 ($14.25 * 8 hours* 30 days). Therefore, Plaintiffs estimated Masonite s potential waiting time penalty exposure as follows 243 separated employees* $3,420 average waiting time penalty= $831,060. However, based on Defendant s potential defenses, Plaintiffs discounted the value of the waiting time penalty claim by 75% to account for an adverse merits ruling, to arrive at $205, With respect to wage statement penalties, Masonite s data also reflected that there were approximately 653 non-exempt employees employed by Masonite during the one-year statute of limitations period for the wage statement claim. Although Plaintiffs presented claims about the failure to include proper wage statements, Defendant presented exemplars showing the wage statements may have properly included all items required under Labor Code section 226(a). Thus, Plaintiffs estimated the wage statement penalties as follows: 653 employees * $4,000 (statutory maximum penalties) =$2,612,000 However, again based Masonite s defenses to certification and the merits Plaintiffs discounted the value of the wage statement penalty claim by 50% for the risk of an adverse certification ruling and an additional 75% to account for an adverse merits ruling for a projected total of $326, Finally, with respect to PAGA Penalties, Plaintiffs estimated a total PAGA exposure of $12,777,741 for PAGA penalties for the entire class. Based DECLARATION OF HEATHER DAVIS ISO PLAINTIFFS MOTION FOR PRELIMINARY APPROVAL- 14

15 Case 5:16-cv JGB-KK Document 86-1 Filed 11/06/17 Page 15 of 67 Page ID #: on the defenses raised by Defendants that (1) Plaintiff Byrd had filed outside the statute of limitations and that Plaintiff Maunakea was only within the period of August 2015 forward, and (2) the potential defenses raised as to whether Plaintiff would be able to proceed on behalf of all of the aggrieved employees, Plaintiffs discounted that figure by 50% for a risk of losing on the beginning stages and another 50% for the risk of the Court reducing penalties, to arrive at a projected total of $638, The Parties allocated $50, of the settlement to the parties PAGA claims, of which 75% ($37,500) will be paid to the LWDA. The remaining 25% will be distributed to the class members. My office provided Notice to the LWDA after execution of the addendum on November 6, Fifty thousand dollars constitutes approximately 2% of the total settlement value, a percentage within the range regularly approved in both state and federal courts. See e.g. Davis v. Brown Shoe Co., 2015 U.S. Dist. LEXIS (E.D. Cal. 2015) (PAGA Payment of $5,000 in a $1.5 million class settlement) Zamora v. Ryder Integrated Logistics, Inc., 2014 U.S. Dist. LEXIS (S.D. Cal. 2014) ($7,500 payment to LWDA for PAGA on a $1.5 million class settlement) Lusby v. Gamestop Inc., 2015 U.S. Dist. LEXIS (N.D. Cal. 2015) (PAGA Payment of $5,000 in a $500,000 class settlement) Cruz v. Sky Chefs, Inc., 2014 U.S. Dist Lexis (N.D. Cal. 2014) (approving payment of $10,000 to the LWDA for PAGA out of $1,750,000 class settlement) Chu v. Wells Fargo Investments, LLC, 2011 WL , *1 (N.D. Cal. 2011) (approving PAGA payment of $7,500 to the LWDA out of $6.9 million common-fund settlement) Franco v. Ruiz Food Products, Inc., 2012 WL , *13 (E.D. Cal. 2012) (approving PAGA payment of $7,500 to the LWDA out of $2.5 million common-fund settlement) Hopson v. Hanesbrands Inc., 2009 WL , *9 (N.D. Cal. 2009) (approving PAGA allocation that was.49% of $408, gross settlement) Garcia v. Gordon Trucking, Inc., 10-cv AWI-SKO, Dkt DECLARATION OF HEATHER DAVIS ISO PLAINTIFFS MOTION FOR PRELIMINARY APPROVAL- 15

16 Case 5:16-cv JGB-KK Document 86-1 Filed 11/06/17 Page 16 of 67 Page ID #: , 165 (E.D. Cal.) (approving a class settlement of $3,700,000, with $10,000 allocated to the PAGA claim) McKenzie v. Federal Express Corp., CV GAF (PLAx), Dkt. 139 & 141 (C.D. Cal.) (court approved a settlement in an amount of $8.25 million, with $82,500 allotted to the PAGA claim) DeStefan v Frito-Lay, 8:10-cv DOC (C.D. Cal.) (court approved a class settlement of $2 million, with $10,000 allocated to PAGA) Martino v. Ecolab Inc., No. 3:14CV04358 (N.D. Cal. 2017) ($100,000 allotted as PAGA penalties or 0.48% of $21,000,000 settlement amount). East v. Comprehensive Educational Services Inc., No. 11-CECG (2015) ($10,000 allotted as PAGA penalties or 0.13% of $7,595,846 settlement amount). Bararsani v. Coldwell Banker Residential Brokerage Company, No. BC (2016) ($10,000 allotted as PAGA penalties or 0.22% of $4,500,000 settlement amount). Rico v. Cardinal Health 200 Inc. No. CIVRS (2017) ($5,000 allotted as PAGA penalties or 0.14% of $3,500,000 settlement amount). Moppin v. Los Robles Medical Center, No. 5:15CV01551 (C.D. Cal. 2017) ($15,000 allotted as PAGA penalties or 0.40% of $3,775,000 settlement amount). Scott-George v. PVH Corporation. No., 2:13CV00441 (E.D. Cal. 2017) ($15,000 allotted as PAGA penalties or 0.46% of $3,250,000 settlement amount). Hart v. Parkview Community Hospital Medical Center,No. RIC (2016) ($10,000 allotted as PAGA penalties or 0.39% of $2,550,000 settlement amount). Nehrlich v. RPM Mortgage Inc., No CU-OE- CXC (2017) ($10,000 allotted as PAGA penalties or 0.40% of $2,500,000 settlement amount). Kelley v. The Related Companies of California L.L.C. No. CIVDS (2016) ($10,000 allotted as PAGA penalties or 0.50% of $2,000,000 settlement amount). Castrejon v. O'Connell Landscape Maintenance Inc., No. RIC (2015) ($5,000 allotted as PAGA penalties or 0.33% of $1,500,000 settlement amount). DECLARATION OF HEATHER DAVIS ISO PLAINTIFFS MOTION FOR PRELIMINARY APPROVAL- 16

17 Case 5:16-cv JGB-KK Document 86-1 Filed 11/06/17 Page 17 of 67 Page ID #: Using these estimated figures, Plaintiffs predicted that their realistic total recovery for the Classes would be approximately $2,401, after discounting the claims for non-certification and/or outright dismissal as explained above. The proposed settlement of $2,525, therefore represents more than more than 105% of Plaintiffs reasonably forecasted recovery. Given the litigation risks involved, I believe that that the proposed settlement is within the realm of being fair, reasonable, and adequate, particularly given the Defendant s strong potential defenses. Given the delay, risk, and uncertainty involved in prevailing on liability and obtaining class certification, there was a significant risk that continuing in litigation in this matter could result in members of the Settlement Class not receiving any monetary recovery. 48. In light of the potential defenses, risks associated with proceeding with class certification and on the merits, continuing expense, and the value obtained, it is my belief based on the extensive formal and informal discovery completed and experience litigating wage and hour class action lawsuits that the proposed settlement is fair, adequate, and reasonable. THE PROPOSED NOTICE PROCESS 49. Subject to the Court s approval, the parties have agreed to have the settlement administered by Simpluris, Inc., an experienced class action settlement administrator. 50. Simpluris will mail the proposed Class Notice (Attached hereto as Exhibit C) to the Settlement Class. 51. The proposed Class Notice advises class members of the key terms of the settlement and of the class members uniform 60-day deadline to file a claim, opt-out, or file an objection to the settlement. The notice also provides a summary of the alleged claims, explains the recovery formula and expected recovery amount for each member of the Settlement Class, provides contact information for Class Counsel, and notifies the class members of the date for the final approval hearing DECLARATION OF HEATHER DAVIS ISO PLAINTIFFS MOTION FOR PRELIMINARY APPROVAL- 17

18 Case 5:16-cv JGB-KK Document 86-1 Filed 11/06/17 Page 18 of 67 Page ID #: The Response deadline will be extended by ten (10) calendar days for any putative class member who is r ed a notice packet by the claims administrator I declare under penalty of perjury under the laws of the State of California and the United States of America that the foregoing is true and correct. Executed on November 6, 2017 at El Segundo, California By: s/ Heather Davis Heather Davis, Esq. Attorneys for Plaintiff DECLARATION OF HEATHER DAVIS ISO PLAINTIFFS MOTION FOR PRELIMINARY APPROVAL- 18

19 Case 5:16-cv JGB-KK Document 86-1 Filed 11/06/17 Page 19 of 67 Page ID #:1518 Exhibit A

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61 Case 5:16-cv JGB-KK Document 86-1 Filed 11/06/17 Page 61 of 67 Page ID #:1560 NOTICE OF PROPOSED CLASS ACTION SETTLEMENT Derrick Byrd, et al. v. Masonite Corporation United States District Court, Central District of California, Case No. 5:16-cv JGB-KK THIS IS A COURT-AUTHORIZED NOTICE. IT IS NOT A SOLICITATION. PLEASE READ THIS NOTICE CAREFULLY. YOUR LEGAL RIGHTS ARE AFFECTED WHETHER YOU ACT OR DO NOT ACT. To: All current and former non-exempt employees who were employed by Masonite Corporation in California from November 17, 2011 through July 14, YOU MAY BE ENTITLED TO RECEIVE MONEY FROM THIS PROPOSED SETTLEMENT. TO RECEIVE YOUR SETTLEMENT SHARE, YOU MUST TAKE ACTION BY [DATE]. 1. What is this settlement about? BASIC INFORMATION A lawsuit was commenced by a former employee of Masonite Corporation ( Masonite or Defendant ) on November 17, The case is currently pending the United States District Court, Central District of California, Case No. 5:16-cv JGB-KK. The lawsuit claims that Masonite did not provide compliant meal and rest periods and associated premium pay, did not properly pay all overtime and minimum wage compensation due and owing, did not provide accurate wage statements, did not timely pay all overtime and minimum wage compensation due and owing, did not timely pay all wages owed at termination of employment, did not maintain accurate records, and did not reimburse employees for business expenses incurred on behalf of Masonite. The lawsuit also seeks associated penalties (including and not limited to penalties pursuant to the California Private Attorneys General Act ( PAGA )) and relief for unfair business practices. The lawsuit claims that the Defendant violated the California Labor Code and the California Business and Professions Code, entitling Class Members to, inter alia, damages, penalties and restitution. Defendant denies all alleged violations, and denies that it owes Class Members any remedies. The Court has not made a ruling on the merits of the case. 2. Why is this a class action? In a class action, one or more people called Class Representatives (in this case Derrick Byrd and Randy Maunakea, also known as Plaintiffs ), sue on behalf of people who appear to have similar claims (in this case all individuals who have been employed by Masonite in the state of California as non-exempt employees at any time from November 17, 2011 through July 14, 2017). All these people are referred to here as Class Members. One court resolves the issues for all Class Members in one lawsuit, except for those who exclude themselves from the Class. The United States District Court, Central District of California, is in charge of this class action. 3. Why is there a settlement? The Court has not decided in favor of the Plaintiffs, Class, or Defendant. Instead, both sides agreed to a settlement which is memorialized in the Joint Stipulation of Class Action and PAGA Settlement and Release and the Amended Joint Stipulation of Class Action and PAGA Settlement and Release (collectively Settlement Agreement or Settlement ).

62 Case 5:16-cv JGB-KK Document 86-1 Filed 11/06/17 Page 62 of 67 Page ID #:1561 On, the Court granted preliminary approval of the Settlement and appointed Plaintiffs Derrick Byrd and Randy Maunakea as Class Representatives and appointed their attorneys LAWYERS for JUSTICE, P.C. and PROTECTION LAW GROUP, LLP as counsel for the Class ( Class Counsel ). The Class Representatives and Class Counsel think the Settlement is best for the Class. 4. How do I know if I am part of the settlement? WHO IS IN THE SETTLEMENT? You are part of the Settlement, and a Class Member, if you were employed by Masonite as a non-exempt employee in the state of California at any time from November 17, 2011 through July 14, What does the settlement provide? THE SETTLEMENT BENEFITS WHAT YOU GET The Settlement provides that Defendant will have to pay a maximum of Two Million, Five Hundred Twenty-Five Thousand Dollars and Zero Cents ($2,525, ) ( Gross Settlement Amount ). Net Settlement Amount: the portion of the Gross Settlement Amount that will be available for distribution to Class Members who do not submit timely and valid Requests for Exclusion ( Class Members ), is the Gross Settlement Amount less the following amounts (which are subject to Court approval): A. Attorneys Fees to Class Counsel not to exceed 35% of the Gross Settlement Amount or Eight Hundred Eighty-Three Thousand Seven Hundred Fifty Dollars and Zero Cents ($883,750.00); B. Litigation Costs/Expenses to Class Counsel not to exceed Sixty-Five Thousand Dollars and Zero Cents ($65,000.00); C. Enhancement Payments to the Class Representatives in an amount not to exceed Five Thousand Dollars and Zero Cents ($5,000.00) for Derrick Byrd and Five Thousand Dollars and Zero Cents ($5, ) for Randy Maunakea; D. Settlement Administration Costs which are currently estimated to be $15, E. Payment to California the Labor Workforce Development Agency ( LWDA ) in the amount of Thirty- Seven Thousand Five Hundred Dollars and Zero Cents ($37,500.00) which represents the LWDA s Seventy- Five Percent (75%) portion of civil penalties in the amount of Fifty Thousand Dollars ($50,000) pursuant to the Private Attorneys General Act ( PAGA Settlement Amount ). The remaining Twelve Thousand Five Hundred Dollars ($12,500) will remain a part of the Net Settlement Amount for distribution to Class Members. The amount of money remaining after these payments, the Net Settlement Amount, is the amount that will be distributed to Class Members if the Settlement is granted final approval by the Court. The portion of the Net Settlement Amount that you are eligible to claim ( Estimated Settlement Share ) will be determined on a pro rata basis, based on the number of weeks you worked in California as a non-exempt employee of Masonite from November 17, 2011 through July 14, 2017 ( Workweeks ). Any Class Member with less than one week of employment will be credited with one Workweek. Every former employee shall be allocated ten (10) additional Workweeks to compensate that employee for releasing his or her claims for waiting time penalties under sections 203 of the Labor Code. -2-

63 Case 5:16-cv JGB-KK Document 86-1 Filed 11/06/17 Page 63 of 67 Page ID #:1562 Your Estimated Settlement Share will be apportioned as one-third wages, one-third penalties, and one-third interest. The wage portion of the Estimated Settlement Share will be subject to withholding for the employee s share of taxes, and will be reported on a W-2 Form (Defendant will pay the employer s taxes and withholdings separately for, and in addition to the Gross Settlement Amount). The penalties and interest portions will not be subject to any withholdings and will be reported on an IRS Form Your Estimated Settlement Share is $XXX.XX. The amount of the payment may change depending on the number of timely and valid Requests for Exclusions submitted in the Settlement, if any. 6. How can I get a payment? HOW TO GET A PAYMENT FROM THE NET SETTLEMENT AMOUNT You do not have to do anything to qualify for a payment of your portion of the Net Settlement Amount. 7. What am I giving up if I do not opt-out of the Settlement? Upon the Effective Date, Class Members who do not timely submit a Request for Exclusion will be deemed to have fully, finally and forever released, settled, compromised, relinquished, and discharged Masonite, and any of its former and present parents, subsidiaries, and affiliates, divisions, corporations in common control, predecessors, successors, and assigns, as well as all, and their past and present officers, directors, employees, partners, shareholders, agents, attorneys, insurers, and any other successors, or assigns, or legal representatives, if any (the Released Parties ) of all claims, rights, demands, liabilities and causes of action, whether in law or equity, arising from the same facts and/or claims alleged in the Original Complaint, First Amended Complaint, Second Amended Complaint, and Third Amended Complaint or related to claims that were pled or could have been pled based on the facts alleged in the Complaint and in pending PAGA Letters submitted to LWDA by Putative Class Members and/or Class Counsel, including claims for wages, restitution, statutory and civil penalties, interest, fees, and costs, and claims arising from California s Private Attorneys General Act, based on the following categories of claims and allegations: (1) all claims relating to the failure to provide meal periods; (2) all claims relating to the failure to provide rest breaks; (3) all claims relating to the failure to pay for all time worked, including double time, overtime, and minimum wage; (4) all claims relating to the failure to timely pay all wages during employment, including overtime and minimum wage; (5) all claims relating to the failure to timely pay wages upon termination of employment, including overtime; (6) all claims relating to defective and/or inaccurate wage statements; (7) all claims relating to the failure to reimburse expenses; (8) all claims for failure to maintain accurate records; (9) incorporated or related claims asserted through California Labor Code sections 2698 et seq.; and (10) incorporated or related claims asserted through California Business and Professions Code sections 17200, et seq., including for violations of California Labor Code sections 201, 202, 203, 204, 210, 226, 226.7, 510, 512, 551, 552, 1174, 1194, 1197, , 1198, 2800 and The Released Claims do not include claims for workers compensation benefits or any of claims that may not be released by law ( Released Claims ). The release of Released Claims pertains to the time period of November 17, 2011 through July 14, The Released Claims do not include claims for workers compensation benefits or any of claims that may not be released by law. All Class Members will be deemed to have fully, finally and forever released, settled, compromised, relinquished, and discharged any and all Released Claims arising under the Private Attorney General Act (California Labor Code sections 2698 et seq.), with respect to all of the Released Parties irrespective of whether a Class Member has submitted a Request for Exclusion. -3-