SETTLEMENT AGREEMENT AND RELEASE OF CLAIMS

Transcription

1 SETTLEMENT AGREEMENT AND RELEASE OF CLAIMS WHEREAS, on or about May 3, 2016, Plaintiff Joe Rogers filed a class action complaint ("Complaint"), against Farrelli's Management Services, LLC, Farrelli's Canyon, LLC, Farrelli's Maple Valley, LLC, Farrelli's Parkland, Inc., Farrelli's Party Place, LLC, Farrelli's Ruston, LLC, Farrelli's Sumner, Inc., Farrelli's Tacoma, Inc., John and Margaret Farrell, Mike and Jane Doe Rutledge, Jacquelyn and John Doe Farrell, Emilie and John Doe Becker, and unknown John and Jane Does, (collectively "Defendants" or "Farrelli's") in the Superior Court of the State of Washington, County of King, Cause No KNT on behalf of himself and all others similarly situated ("Lawsuit"); and WHEREAS, in the Complaint, Plaintiff sought, on behalf of himself and all others similarly situated: (a) damages for failure to pay for all hours worked; (b) damages for failure to pay for all applicable rest breaks and meal periods; (c) exemplary damages pursuant to RCW ; (d) damages for failure to pay training employees' wages owed; (e) attorneys' fees and costs; and (f) prejudgment interest; and WHEREAS, Defendants have denied any liability for Plaintiffs claims; and WHEREAS, Plaintiff and Defendants (the "Parties") have engaged in comprehensive and mediated settlement discussions; and WHEREAS, it is the desire of the Parties to fully, finally, and forever settle, compromise, and discharge all disputes and claims that have been alleged in the Lawsuit or that arise out of or could have been alleged on the basis of the circumstances alleged in the Complaint, including federal, state, and municipal claims, EXCEPT AS PROVIDED BELOW, Joe Rogers is not releasing Defendants from potential individual claims relating to the termination of his employment by the Defendants, these potential claims could include, but are not limited to, Wrongful Termination, Retaliation, Hostile Work Environment, and Negligent and Intentional Infliction of Emotional Distress. NOW, THEREFORE, in consideration of the mutual covenants, promises, and warranties set forth herein, the Parties agree, subject to the Court's approval, as follows: 1. This Settlement Agreement and Release of Claims (hereinafter "Settlement" or "Settlement Agreement"), which the parties agree is a fair, adequate and reasonable compromise and settlement of the Lawsuit, is made and entered into by and between the following Parties: Plaintiff, the "Settlement Class Members" as defined below, and Defendants including without limitation, any and all related business entities, subsidiaries, assigns, partners, insurance carriers, attorneys, holding companies, owners, operators and franchisees. This Settlement Agreement is subject to the terms and conditions hereof and to the approval of the Court. SETTLEMENT CLASS CERTIFICATION 2. The Parties agree that Plaintiff will move the Court for certification of a "Settlement Class" under CR 23(b )(3) solely for purposes of effectuating this Settlement Page 1 of9

2 Agreement and conditioned on final approval of the Settlement by the Court. As part of this motion, Plaintiff will ask the Court to approve the designation of Plaintiff as the representative of the Settlement Class ("Settlement Class Representative"), and to appoint Patrick Leo McGuigan as "Class Counsel" for the Settlement Class. Plaintiff agrees to provide any such motion to Defendants seven (7) days in advance of filing any such motion, and to work cooperatively with Defendants to come to an agreement as to the content of any such motion. 3. The putative Settlement Class shall include all hourly, non-exempt employees employed by Defendants in Washington from May 3, 2013 through October 15, 2017 (the "Settlement Class Period"), who do not opt out of the class ("Settlement Class Members"). 4. Except as provided in Paragraph 2 above, Defendants do not waive their right to contest or object to the certification of any class in this Lawsuit for any other purposes in the event that this Settlement Agreement shall be vacated or become void for any reason. In the event that final approval of the Settlement is denied, the Parties agree that any Settlement Class certified pursuant to this agreement will automatically be decertified and without effect. SETTLEMENT FUNDS AND SETTLEMENT PAYMENTS 5. The Total Settlement Amount. Defendants shall establish a fund of up to $700, (Seven Hundred Thousand Dollars and Zero Cents), which shall be referred to herein as the "Total Settlement Amount." This fund includes all of Defendants' financial obligations under this Settlement Agreement for attorneys' fees and litigation costs, the employees' normal portions of payroll taxes on the settlement payments, and the payments to Settlement Class Members. It does not include the Service Award to the Settlement Class Representative, the costs of settlement administration, and the employer's portion of any payroll taxes on the settlement payments. 6. Attorneys' Fees and Costs. Class Counsel will apply to the Court for payment of attorneys' fees and reasonable litigation costs from the Total Settlement Amount. Defendants will not oppose the request for litigation costs, and will not oppose the request for attorneys' fees to the extent the fee request does not exceed thirty-three percent (33%) of the Total Settlement Amount. The attorneys' fees and litigation costs actually paid from the Total Settlement Amount shall be that amount approved by the Court. The enforceability of this Settlement Agreement is not contingent on the amount of attorneys' fees or litigation costs awarded, and any dispute regarding the amount of attorneys' fees or litigation costs, and/or any appeal related thereto, shall not affect or delay the finality of this Settlement Agreement, and shall not affect or delay the entry of dismissal of the Lawsuit with prejudice. Further, the amount of the attorneys' fees awarded will not affect the amount of the Total Settlement Amount. 7. Class Member Payments (a) Net Settlement Amount. The "Net Settlement Amount" is defined as the Total Settlement Amount less any award of attorneys' fees and costs to Class Counsel approved by the Court, and less any amounts allocated to potential Settlement Class Members that opt-out of the lawsuit pursuant to Paragraph 15 of this Agreement or fail to make a claim to entitlement to any damages pursuant to Paragraph 17 of this Agreement. Page 2 of9

3 (b) Settlement Class Member Payments. Once the Attorneys' Fees and Costs approved by the Court are removed from the Total Settlement Amount, the remaining funds in the Total Settlement Amount will be prorated among each of the potential Settlement Class Members based on the number of Work Weeks each worked for Defendants. A Work Week will be calculated by determining the total number of hours the Potential Settlement Class Member worked during the class period, and dividing that total number of hours by 40. Each potential Settlement Class Member that submits a valid claim to entitlement of damages pursuant to Paragraph 17 of this Agreement will be entitled to receive the portion of the Net Settlement Amount allocated to him or her. (c) Allocations. Any payments made to class members shall be treated as wages, and shall be subject to payroll taxes and standard withholdings. Defendants shall pay the employer's portion of payroll taxes on Settlement Class Members' settlement payments. Defendants' payment of the employer's portion of payroll taxes shall be in addition to, and shall not come out of the Net Settlement Amount. The Settlement Class Member shall pay the employee's portion of payroll taxes and other obligations on the settlement amount. Except for the employer's portion of payroll taxes, Defendants shall have no responsibility or liability for any federal or state taxes owed in connection with the payments made in connection with this Settlement Agreement. (d) Tax Reporting. Defendants or Settlement Administrator shall prepare and provide to each Settlement Class Member receiving a settlement payment from the Net Settlement Amount a Form W-2 for such settlement awards. Class Counsel will receive a Form 1099 for the attorneys' fees and litigation costs awarded to Class Counsel. (e) Residual Funds. In accordance with CR 23(f), any remaining funds in the Net Settlement Amount that cannot be delivered to a Settlement Class Member that submitted a valid claim form and/or were not cashed within one hundred and twenty (120) calendar days after their issuance will be paid to the Legal Foundation of Washington. Defendants or Settlement Administrator will issue and deliver checks to the Legal Foundation of Washington no later than one hundred fifty (150) calendar days after the settlement checks are mailed 8. Service Award to Settlement Class Representative. The Parties agree that Plaintiff will request payment (the "Service Award") in the amount of $15,000 in recognition of his role and effort as named Plaintiff, which Service Award shall be subject to Court approval. This amount shall be separate from the Total Settlement Amount and in addition to Plaintiffs pro rata share of the Net Settlement Amount. The enforceability of this Agreement is not contingent on the amount of the Service Award (if any) that is granted. 9. Settlement Administrator. The Parties agree that they will use the CPT Group, Inc. to administer the settlement in this case. All costs associated with the claims administration will be borne by Defendants. Page 3 of9

4 TIMELINE AND DUTIES OF THE PARTIES PRIOR TO OBTAINING COURT APPROVAL 10. Consistent with Paragraph 2 above, Plaintiff shall move the Court for entry of an order certifying a Settlement Class, preliminarily approving this Settlement, and approving the Notice to the Class and Claim Form in the form appended as Exhibit A hereto no later than thirty (30) calendar days after the execution of this Settlement Agreement. Class Counsel shall provide Defendants with a draft of the motion for preliminary approval at least seven (7) calendar days before the motion for preliminary approval is filed. NOTICE TO SETTLEMENT CLASS MEMBERS AND CLAIMS PROCESS 11. Defendants will provide Settlement Administrator with an address list for potential Settlement Class Members. In preparing the class member list, Defendants shall use reasonable good faith efforts to identify the last known mailing addresses and telephone numbers of the potential Settlement Class Members, but shall have no obligation to look beyond information readily obtainable from Defendants' records. The Settlement Administrator shall obtain updates, if any, to the addresses contained in the potential Settlement Class Member list using the National Change of Address ("NCOA") database maintained by the United States Postal Service ("Postal Service"). Settlement Administrator shall use reasonable means to perform an address updating check for potential Settlement Class Members prior to mailing the Notice and Claim Form to ensure, to the extent practicable, that the Notice and Claim Form is sent to all potential Settlement Class Members. Settlement Administrator shall have no obligation beyond that described above to locate potential Settlement Class Members. 12. Class Notice. The Notice, in a form approved by the Court, shall be sent by the Settlement Administrator to the potential Settlement Class Members, by first class mail, within thirty (30) calendar days after entry of the order of preliminary settlement approval by the Court. 13. Claims Process. In addition to the Notice described above, the Claim Form, in a form approved by the Court, shall be sent by the Settlement Administrator to the Potential Settlement Class Members, by first class mail, within thirty (30) calendar days after entry of the order of preliminary settlement approval by the Court. OPT OUTS; OBJECTIONS; BINDING EFFECT 14. Potential Settlement Class Members will have seventy-five (75) calendar days from the date on the Notice (which date shall be the date three (3) days after the date the Notice is mailed) to opt out of the Settlement Class, object to the Settlement Agreement or make a claim on the Net Settlement Amount. 15. Any Potential Settlement Class Member may elect to be excluded from this litigation during the 75-day period after the date of the Notice. To be effective, any such election must be made in writing; must contain the information specified in the Notice; and must be mailed to Settlement Administrator and postmarked on or before the 75th day after the date of the Notice. The date of the postmark on the mailing envelope shall be the exclusive means to determine whether a request for exclusion is timely. Any potential Settlement Class Member who is eligible to opt out and who timely requests exclusion in compliance with these Page 4 of9

5 requirements shall thereafter not be considered to be a Settlement Class Member, shall not have any rights under this Settlement Agreement, shall not be entitled to receive any settlement payment, and shall not be bound by this Settlement Agreement or any judgment(s) in the Lawsuit. Instead, he or she will retain any claims he or she might have had, subject to the applicable statutes of limitation. In addition, the Net Settlement Amount shall be reduced by the amount allocated to paying damages to any potential Settlement Class Member that has timely requested exclusion from this class, and Defendants shall have no obligation to pay that amount. 16. Except for those potential Settlement Class Members who exclude themselves in compliance with the foregoing, all potential Settlement Class Members will be deemed to be members of the Settlement Class in the Lawsuit for all purposes under this Settlement Agreement, the final approval order, the judgment, and the releases set forth in this Settlement Agreement. 17. Any Potential Settlement Class Member may elect to file a claim for damages in this litigation during the 75-day period after the date of the Notice. To be effective, any such claim must be made in writing must contain the information specified on the claim form, and must be mailed to the Settlement Administrator and postmarked on or before the 75th day after the date of the Notice. The date of the postmark on the mailing envelope shall be the exclusive means to determine whether a request for exclusion is timely. Any potential Settlement Class Member who is eligible to make a claim for damages, and does not, shall remain a Settlement Class Member, shall not be entitled to receive any settlement payment, and shall be bound by this Settlement Agreement, including the releases herein, and any judgment(s) in the Lawsuit. In addition, the Net Settlement Amount shall be reduced by the amount allocated to paying damages to any potential Settlement Class Member that has not timely submitted a claim form, and Defendants shall have no obligation to pay that amount. 18. Any Settlement Class Member may object to this Settlement Agreement, provided that such objections are made in writing, and filed with the Court and served on Class Counsel and counsel for Defendants no later than 75 days after the date of the Notice. 19. Neither Plaintiff, Class Counsel, the Defendants, Defendants' counsel, nor any person on their behalf, shall seek to solicit or otherwise encourage anyone to (a) exclude himself or herself from the Settlement Class, (b )submit a claim form (c) object to the Settlement Agreement, ( d appeal from any order of the Court that is consistent with the terms of this Settlement Agreement, or (e) discourage participation in the Settlement. 20. Upon receipt, counsel for the Parties shall promptly exchange with one another copies of all claim forms, objections, exclusions and/or challenges to the Settlement or any part thereof. TIMELINE AND DUTIES OF THE PARTIES FOLLOWING NOTICE Page 5 of9

6 21. Plaintiff shall move the Court for entry of an Order granting final approval to this Settlement promptly following the opt-out/claim filing/objection deadline. Class Counsel shall provide Defendants with a draft of said motion and proposed order of dismissal with prejudice at least seven (7) calendar days prior to filing. 22. The settlement embodied in this Settlement Agreement shall become effective on the "Effective Date," which is defined as the later of: (i) thirty-one (31) days after entry of the Court's final approval of this Settlement Agreement, if no appeal of that order is filed, or (ii) the date the Court's approval of this Settlement Agreement becomes final and binding after final resolution of any appeals. 23. Defendants shall pay all costs necessary to administer the Settlement, and to satisfy all settlement obligations required by this Agreement. Defendants shall deposit the Net Settlement Amount with the Settlement Administrator within thirty (30) days of the entry of an order granting final approval of this Agreement. 24. Settlement Administrator shall mail payments to those Settlement Class Members that submitted valid claims and the Incentive Payments to Plaintiff no later than 15 days after receiving the Net Settlement Amount from Defendants. 25. If any Settlement Class Members do not cash their checks within 120 days after issuance, their checks will be submitted to the State of Washington unclaimed property. In such event and unless good cause exists, those Settlement Class Members will be deemed to have irrevocably waived any right in or claim to a settlement payment or share under this Settlement Agreement, but the Settlement Agreement and the Court's final approval thereof, and the dismissal of the Complaint with prejudice, shall nevertheless be binding upon them. 26. The order of dismissal with prejudice shall be presented for entry upon entry of the Court's final approval of this Settlement Agreement. RELEASES BY SETTLEMENT CLASS MEMBERS AND PLAINTIFF 27. Upon the final approval by the Court of this Settlement Agreement (and except as to such rights or claims as may be created by this Settlement Agreement), Plaintiff fully releases and waives all claims that were, or could have been, brought, individually on behalf of a class, against Defendants, including any and all related business entities, subsidiaries, assigns, partners, insurance carriers, attorneys, holding companies, owners, operators and franchisees with each of their respective officers, directors, shareholders, employees and agents. This Release specifically includes any actual or potential claims arising on or before the Effective Date of this Agreement based on the facts alleged in the Complaint, whether those claims are presently known or unknown. EXCEPT, that Plaintiff Joe Rogers is not releasing any individual claims, he believes he may have relating to the termination of his employment by the Defendants., these potential claims include, but are not limited to, Wrongful Termination, Retaliation, Hostile Work Environment, and Negligent and Intentional Infliction of Emotional Distress, Page 6 of9

7 28. Plaintiff agrees that he will not enter, contact, or otherwise appear at any property owned by Defendants. Plaintiff further agrees that he will not knowingly contact or communicate with any person working for or otherwise associated with Defendants. 29. Upon the final approval by the Court of this Settlement Agreement (and except as to such rights or claims as may be created by this Settlement Agreement), members of the Settlement Class who do not opt out fully release and waive all of their claims arising during the Settlement Class Period with respect to a failure to pay wages or provide benefits or other consideration in compliance with any claims for unpaid wages (including any wages due for rest breaks and meal periods), and any claims for attorneys' fees, costs, and prejudgment interest relating to the foregoing, that were brought or could have been brought based on the facts alleged in the Complaint. The foregoing release and waiver shall be in favor of Defendants, together with any and all related business entities, subsidiaries, assigns, partners, insurance carriers, attorneys, holding companies, owners, operators and franchisees, with each of their respective officers, directors, shareholders, employees and agents. 30. Except to the extent a Settlement Class Member presents a timely objection to this Settlement pursuant to the procedures set forth above, Settlement Class Members waive their right to seek any form of appellate review over any order or judgment that is consistent with the terms of this Settlement Agreement. VOIDING THE SETTLEMENT AGREEMENT 31. Except as otherwise provided above, a failure of the Court to approve any material term or aspect of this Settlement Agreement shall render the entire Settlement Agreement void and unenforceable as to all Parties herein. 32. If the Settlement Agreement becomes void under the preceding Paragraph, this Settlement Agreement shall have no force or effect; all negotiations, statements and proceedings related thereto shall be without prejudice to the rights of any party, all of whom shall be restored to their respective positions in the Lawsuit prior to the Settlement; the Settlement Class created pursuant to this Settlement Agreement shall be decertified and of no force or effect; and neither this Settlement Agreement nor any ancillary documents, actions or filings shall be admissible or offered into evidence in the Lawsuit or any other action or proceeding for any purpose. NO ADMISSION OF LIABILITY 33. Defendants do not admit any liability or wrongdoing of any kind associated with the claims asserted in the Lawsuit. This Settlement Agreement and any documents executed or filed in connection with this Settlement Agreement are not admissions and may not be used or admitted as evidence in any action or proceeding of Defendants' liability or wrongdoing. PARTIES' AUTHORITY 34. The signatories hereby represent that they are fully authorized to enter into this Settlement Agreement and to bind the Parties hereto to the terms and conditions hereof. Page 7 of9

8 MUTUAL FULL COOPERATION 35. The Parties agree to reasonably cooperate with each other to accomplish the terms of this Settlement Agreement, including but not limited to, execution of such documents and to take such other action as may reasonably be necessary to implement the terms of this Settlement Agreement. As soon as practicable after execution of this Settlement Agreement, Class Counsel shall, with the assistance and cooperation of Defendants and their counsel, take all necessary steps to secure the Court's preliminary and final approval of this Settlement Agreement. DISPUTE RESOLUTION AND ENFORCEMENT ACTIONS 36. Any disputes over any term of this Settlement Agreement, calculations of settlement payments or checks, the form of the Notice, or alleged violations of any of the terms or deadlines set forth in this Settlement Agreement shall be brought on an expedited basis to the King County Superior Court for determination. CONSTRUCTION 3 7. The Parties hereto agree that the terms and conditions of this Settlement Agreement are the result of lengthy, intensive, arm's-length and mediated negotiations between the Parties and that the Settlement Agreement shall not be construed in favor of or against any party by reason of the extent to which any party or his or its counsel participated in the drafting of this Settlement Agreement. CAPTIONS AND INTERPRETATIONS 38. Paragraph titles or captions contained herein are inserted as a matter of convenience and for reference, and in no way define, limit, extend, or describe the scope of this Settlement Agreement or any provision hereof. Each term of this Settlement Agreement is contractual and not merely a recital. MODIFICATION 39. This Settlement Agreement may not be changed, altered, or modified, except in writing and signed by the Parties hereto, and, if changed after preliminary court approval, approved by the Court. INTEGRATION CLAUSE 40. This Settlement Agreement constitutes the entire agreement between the Parties relating to the settlement and transaction contemplated hereby, and all prior or contemporaneous agreements, understandings, representations, and statements, whether oral or written and whether by a party or such party's legal counsel are merged herein. No rights hereunder may be waived except in writing. NO RELIANCE Page 8 of9

9 41. The parties acknowledge that they have not relied on any promise, representation or warranty, whether express or implied, not contained in this agreement. NO PRIOR ASSIGNMENTS 42. This Settlement Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective heirs, trustees, executors, administrators and successors. The Parties hereto represent, covenant, and warrant that they have not directly or indirectly assigned, transferred, encumbered, or purported to assign, transfer, or encumber to any person or entity any portion of any liability, claim, demand, action, cause of action, or rights herein released and discharged except as set forth herein. CLASS SIGNATORIES 43. It is agreed that because the Settlement Class Members are so numerous, it is impossible or impractical to have each Settlement Class Member execute this Settlement Agreement. The Notice will advise all Settlement Class Members of the binding nature of the release and such shall have the same force and effect as if this Settlement Agreement were executed by each Settlement Class Member. COUNTERPARTS 44. This Settlement Agreement may be executed in counterparts, and when each party has signed and delivered at least one such counterpart, each counterpart shall be deemed an original, and, when taken together with other signed counterparts, shall constitute one Settlement Agreement, which shall be binding upon and effective as to all Parties. IN WITNESS WHEREOF, the undersigned have duly executed this Settlement Agreement as of the date indicated below: Date: _,2017 Individually, PLAINTIFF JOE ROGERS Date~ '.1--_, 2017 Page 9 of9

10 42. This Settlement Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective heirs, trustees, executors, administrators and successors. The Parties hereto represent, covenant, and warrant that they have not directly or indirectly assigned, transferred, encumbered, or purported to assign, transfer, or encumber to any person or entity any portion of any liability, claim, demand, action, cause of action, or rights herein released and discharged except as set forth herein. CLASS SIGNATORIES 43. It is agreed that because the Settlement Class Members are so numerous, it is impossible or impractical to have each Settlement Class Member execute this Settlement Agreement. The Notice will advise all Settlement Class Members of the binding nature of the release and such shall have the same force and effect as if this Settlement Agreement were executed by each Settlement Class Member. COUNTERPARTS I. This Settlement Agreement may be executed in counterparts, and when each party has signed and delivered at least one such counterpart, each counterpart shall be deemed an original, and, when taken together with other signed counterparts, shall constitute one Settlement Agreement, which shall be binding upon and effective as to all Parties. IN WITNESS WHEREOF, the undersigned have duly executed this Settlement Agreement as of the date indicated below: Date: /)er..c,.,!?cv ZL_, 2017 Date:, 2017 Individually, ~GERS On behalf of Defendants, JOHN FARRELL PRESIDENT Page 9 of9