EXHIBIT 1. Settlement Agreement. (to Declaration of Christina A. Humphrey)

Transcription

1 Case 4:14-cv YGR Document 80-2 Filed 03/11/16 Page 1 of 26 EXHIBIT 1 Settlement Agreement (to Declaration of Christina A. Humphrey) EXHIBIT 1 Settlement Agreement (to Declaration of Christina A. Humphrey)

2 Case 4:14-cv YGR Document 80-2 Filed 03/11/16 Page 2 of 26 SETTLEMENT AGREEMENT AND GENERAL RELEASE This SETTLEMENT AGREEMENT (the Settlement Agreement ) is made and entered into this 9th day of February, 2016, by and between Defendants Luggage Services and Logistics, LLC ( L2 ), Baggage Airline Guest Services, Inc., Home Serv Delivery, LLC, Bags, Inc., and Delivery Outsourcing, LLC (collectively, Defendants ) and Plaintiff Alonzo Talton, an individual ( Plaintiff ), on his own behalf and on behalf of the putative class (as described in paragraph 1 of the Recitals section) and each of its members (collectively, Settlement Class Members and defined in Paragraph 9 of the Recitals section) in Talton v. Luggage Services and Logistics, et al. (United States District Court for the Northern District of California, Case No. CV YGR) (the Litigation ). Defendant Reds Delivery, LLC, was not served with the Summons and Complaint, did not participate in settlement negotiations, is not a party to this Settlement Agreement and is not included in the description of Defendants used herein. Defendants and Plaintiff shall jointly be referred to as the Parties. This Settlement Agreement modifies and replaces the Parties previous September 2015 agreement. This Settlement Agreement pertains to all claims that were asserted against the above named Defendants in the Second Amended Complaint in the Litigation. This Settlement Agreement is subject to the terms and conditions hereof and the approval of the Court. R E C I T A L S 1. On May 30, 2014, Plaintiff filed a class action complaint against Defendant Luggage Services and Logistics, LLC on behalf of a putative class of all California-based courier drivers who were classified by Defendants as independent

3 Case 4:14-cv YGR Document 80-2 Filed 03/11/16 Page 3 of 26 contractors. 1 (Doc. No. 1) Plaintiff alleged that he and other putative class members were misclassified as independent contractors, and should have been classified as employees. Plaintiff alleged relief under various California Labor Code provisions. 2. The case was assigned case number CV , and assigned to the Honorable Yvonne Gonzalez Rogers, in the Northern District of California. 3. On October 6, 2014, Plaintiff filed his First Amended Complaint, adding Baggage Airline Guest Services, Inc., Home Serv Delivery, LLC, Bags, Inc. and Reds Delivery, LLC as additional defendants. (Doc. No. 21) 4. On December 4, 2014, Plaintiff filed his Second Amended Complaint, adding Delivery Outsourcing, LLC as a defendant. (Doc. No. 24) 5. On December 2, 2014, at the Parties joint request, the Court stayed the Litigation and ordered the Parties to attend mediation. (Doc. No. 23) 6. On January 30, 2015, the Plaintiff and Defendants participated in a lengthy, 13-hour mediation with Michael Dickstein. The mediation concluded without the Parties having been able to reach an agreement. However, significant progress was made during those negotiations, and the Parties continued thereafter to negotiate with the assistance of Mr. Dickstein. 7. On May 2, 2015, Defendants filed Answers to the Second Amended Complaint. (Doc. No ) 8. Subsequently, under the guidance of Mr. Dickstein, an agreed framework for a settlement was reached, and the Parties then documented that framework in the form of a non-binding Memorandum of Understanding ( MOU ), documented by on June 18, 2015, with acknowledgement of an 1 Plaintiff also alleged a subclass of drivers including members of the Class whose courier services with the Defendants terminated at any time during the proposed Class Period. (Doc. No. 1) - 2 -

4 Case 4:14-cv YGR Document 80-2 Filed 03/11/16 Page 4 of 26 agreement by counsel for the Parties. At all times, the negotiations leading to the execution of the MOU, and eventually to this Settlement Agreement, have been adversarial, non-collusive and at arm s length. 9. For purposes of this Settlement Agreement, the Settlement Class consists of all California-based courier drivers who were classified by Defendants as independent contractors from May 30, 2010, through and to the date the Court grants preliminary approval, and who do not elect to opt-out of the settlement (meaning to exclude themselves from this class action settlement). Such class members shall be referred to hereinafter as the Settlement Class Members. As set forth hereafter, unless a putative class member elects to opt-out of the Settlement Class by completing a valid and timely Election Not to Participate in the Settlement form, he or she will be mailed a settlement check. 10. Plaintiff believes that he has filed a meritorious action. In the complaint, Plaintiff sought declaratory relief from the Court that he and putative class members were improperly classified as independent contractors and should have been properly classified as employees; and further sought damages, restitution, interest, penalties, and attorneys fees for the following alleged claims: (a) failure to reimburse business expenses and losses incurred in connection with employment (the primary claim asserted) (Cal. Labor Code 406, 2800, 2802; IWC Wage Order No. 9, 8-9); (b) failure to pay California minimum wage and overtime for all hours worked (Cal. Labor Code , 1194, , 1197; IWC Wage Order No. 9, 4); (c) failure to pay for all hours worked in accordance with the designated wage scale (Cal. Labor Code 221, 223); (d) failure to provide off-duty meal periods (Cal. Labor Code 226.7, 512, 516; IWC Wage Order No. 9, 11); (e) failure to provide rest periods (Cal. Labor Code 226.7, 512, 516; IWC Wage Order No. 9, 12); (f) failure to furnish timely, accurate, itemized wage statements (Cal. Labor Code 226); (g) failure to pay wages due on - 3 -

5 Case 4:14-cv YGR Document 80-2 Filed 03/11/16 Page 5 of 26 termination (Cal. Labor Code ); and (h) failure to comply with the Private Attorney General s Act pursuant to Labor Code 2699; and unfair competition pursuant to California Business & Professions Code 17200, et seq. Plaintiff also alleged an alternative breach of contract claim on behalf of himself only, alleging that he was not paid for all jobs completed. 11. No Admission of Liability by the Defendants. Defendants deny any liability or wrongdoing of any kind associated with the claims being released herein. Defendants contend, among other things, that they have complied at all times with all applicable California laws and assert that the members of the Class were properly compensated and treated at all times in compliance with California law. Neither this Settlement Agreement nor any attachment thereto, nor any other document pertaining to the settlement contemplated herein, may be offered in any other case or proceeding as evidence of any admission by Defendants, or any of them, of any liability on any claims for damages or other relief. Any stipulation or statement by Defendants, or any of them, contained herein is made for settlement purposes only. 12. Defendants believe that in the interest of avoiding the costs and disruption of ongoing litigation and resolving the claims asserted in the Litigation, the settlement negotiated between the Parties and set forth in this Settlement Agreement is fair, reasonable, and adequate. 13. For purposes of this settlement agreement Class Counsel shall be Stanley D. Saltzman and Christina A. Humphrey, Marlin & Saltzman, Canwood Street, Suite 208, Agoura Hills, California TERMS OF SETTLEMENT 1.1. Dismissal of Defendants: Upon this approval of this Settlement Agreement and it becoming final as defined herein, Defendants will be dismissed with prejudice from the litigation

6 Case 4:14-cv YGR Document 80-2 Filed 03/11/16 Page 6 of Establishment of the Class Settlement Fund: Defendants shall pay a total of Nine Hundred Seventy Thousand Dollars ($970,000) (the Settlement Fund ). Payments by Defendants pursuant to this Settlement Agreement shall settle all pending issues between the Parties raised in the Second Amended Complaint, including, but not limited to, all payments of class claims, administration costs, Attorneys Fees and Costs, and enhancement awards to Plaintiff as approved by the Court. The payments are not being made for any other purpose and will not be construed as compensation for purposes of determining eligibility for any health and welfare benefits or unemployment compensation. In addition, all individuals receiving a payment based on this Settlement shall not be entitled to any additional or increased health, welfare or retirement benefits as a result of their participation in the Settlement Calculation of Net Settlement Fund: The Net Settlement Fund ( NSF ) will constitute the total sum from which Settlement Class Members will be paid. It shall be comprised of the Settlement Fund, less Court-approved Attorneys Fees and Costs, costs of administration relating to this settlement, enhancement award to Plaintiff, as described below, and a payment under PAGA to the LWDA in the amount of $11,250. The PAGA allocation of the Settlement Fund shall be $15,000, subject to the Court s final approval, of which 75% of that amount will be paid to the LWDA out of the Settlement Fund ($11,250), and the remaining 25% will become part of the NSF for distribution to class members ($3,750). The NSF will be used to calculate the settlement share that each Settlement Class Member will receive if this Settlement becomes final as defined in Paragraph 1.10, below. If the Court awards less than the amount sought for any of these awards (Class Representative Payment, Class Counsel Fees and Expenses Payment, the payment to the LWDA, the Settlement Administrator, and any other fees or expenses (other than Attorneys Fees and Costs) incurred in implementing - 5 -

7 Case 4:14-cv YGR Document 80-2 Filed 03/11/16 Page 7 of 26 the terms of this Settlement Agreement as approved by the Court), the difference between the amount sought and the amount awarded will be retained as part of the Net Settlement Amount for distribution to those Settlement Class Members who do not submit a valid and timely Election Not to Participate. An award by the Court of a lesser amount than that sought by Plaintiff and Class Counsel for the Class Representative Payment, the Attorneys Fees and Costs Payment, or the Class Counsel Expenses Payment, will not constitute a material change to the Settlement Payment to Plaintiff for Breach of Contract Claim: In addition to the Settlement Fund amount described in Section 1.2, Defendants shall pay a total of $12,500 to Plaintiff to fully and finally settle his personal Breach of Contract Claim, which will be paid by one check made payable to Plaintiff, for which an IRS Form 1099 will be issued, as required by law. Plaintiff has not participated in any health, welfare or retirement benefits and shall not be entitled to any additional or increased health, welfare or retirement benefits as a result of his participation in the Settlement or payment of the $12,500 referenced in this paragraph. Plaintiff will sign a separate Settlement and Release in order to receive this $12,500 payment Effective Date: This Settlement Agreement shall become effective when the Settlement is considered as Final. For purposes of this Settlement Agreement, Final means (i) the Settlement has received Final Approval by the District Court and there were no timely objections filed, or that any timely objections have been withdrawn; or (ii) in the event that one or more timely objections has/have been filed and not withdrawn, then upon the passage of the applicable date for an objector to seek appellate review of the District Court s order of final approval of the Settlement, without a timely appeal having been filed; or (iii) in the event that a timely appeal of the District Court s order of final - 6 -

8 Case 4:14-cv YGR Document 80-2 Filed 03/11/16 Page 8 of 26 approval has been filed, then the Settlement Agreement shall be final when the applicable appellate court has rendered a final decision or opinion affirming the District Court s final approval without material modification, and the applicable date for seeking further appellate review has passed. In the event that the District Court fails to approve the Settlement: (1) this Settlement Agreement shall have no force and effect and the Parties shall be restored to their respective positions prior to entering into it, and no Party shall be bound by any of the terms of the Settlement Agreement; (2) Defendants shall have no obligation to make any payments to the Settlement Class Members or Class Counsel; (3) Defendants shall have no obligation to make the $12,500 payment to Plaintiff for his Breach of Contract Claim; (4) any preliminary approval order, final approval order or judgment shall be vacated; and (5) the Settlement Agreement and all negotiations, statements, proceedings and data relating thereto shall be deemed confidential mediation settlement communications and not subject to disclosure for any purpose in any proceeding Attorneys Fees and Costs: a. Class Counsel shall apply to the Court for an award of Attorneys Fees and Costs and expenses incurred in connection with the prosecution of this matter, and all of the work remaining to be performed by Class Counsel in documenting the Settlement, securing Court approval of the Settlement, making sure that the Settlement is fairly administered and implemented, and obtaining dismissal of the action. Attorneys Fees and Costs is also referred to as Class Counsel Fees and Expenses Payment. Defendants will not object to an award of attorneys fees in an amount not to exceed 25% of the Settlement Fund, nor will Defendants object to a request by Class Counsel for reimbursement of reasonable and actual costs and expenses not to exceed $16,500. Amounts - 7 -

9 Case 4:14-cv YGR Document 80-2 Filed 03/11/16 Page 9 of 26 awarded by the Court for Attorneys Fees and Costs shall be paid from the Settlement Fund. b. Should the Court approve a lesser percentage or amount of fees and costs, the unapproved portion shall be added to the Net Settlement Fund and distributed proportionately to the Settlement Class Members. In the event that the Court awards Attorneys Fees and Costs in an amount less than that requested by Class Counsel, such award shall not be a basis for rendering the entire settlement null, void or unenforceable and will not constitute a material change to the Settlement. Class Counsel retains its right to appeal any decision by the Court regarding the Court s award of Attorneys Fees and Costs Enhancement Award: Subject to approval by the Court, Defendants will not object to Plaintiff receiving an enhancement award not to exceed Seven Thousand Five Hundred Dollars ($7,500) for his role in serving as the Class Representative. This amount is also called the Class Representative Payment. The enhancement award is in addition to the claim share to which Plaintiff is entitled along with other Settlement Class Members. An award by the Court of a lesser amount than that sought by Plaintiff and Class Counsel for the Class Representative Payment will not constitute a material change to the Settlement Costs of Administration: Subject to Court approval and agreement by Defendants (which shall not be unreasonably withheld), Class Counsel shall select an experienced claims administrator to act as the Settlement Administrator in this action. This administration duty shall include, without limitation, mailing a Court-approved Notice of Class Action Settlement after having updated the Class list addresses via the Postal Service s address search program, performing customary and usual skip traces on Notices returned as undeliverable, calculating Settlement Class Members shares of the Net Settlement Fund, preparing and mailing of settlement checks, preparing any appropriate tax forms in connection - 8 -

10 Case 4:14-cv YGR Document 80-2 Filed 03/11/16 Page 10 of 26 with the settlement payments and remitting those forms to the appropriate governmental agencies. All class administration fees will be paid out of the Settlement Fund Total Payment: Defendants will pay the total of the Settlement Fund ($970,000), described in Section 1.2, plus the payment to Plaintiff for his Breach of Contract Claim, described in Section 1.4 ($12,500), for a total payment of $982,500. Under no circumstances will Defendants be obligated to pay any more than $982,500. If the Court does not grant final approval of this Class Settlement, Defendants will not be obligated to fund the Settlement Fund of $970,000 or make the $12,500 payment described in Section No Claim Form Required: Settlement Class Members shall share in the Net Settlement Fund as set forth in Paragraph Settlement Class Members shall not be required to complete a claim form. Settlement Class Members shall receive a Court-approved Notice describing the terms of the settlement and an Estimated Settlement Share Amount, setting forth the Parties best estimate of the amount to be awarded to each individual class member, assuming the Court were to approve the fees and costs requested herein Calculation of Settlement Class Members Shares of the Net Settlement Fund: The Settlement Class definition (Recitals No. 9) provides that the Class includes all California-based courier drivers who were classified by Defendants as independent contractors from May 30, 2010, through and to the date the Court grants preliminary approval, and who do not elect to opt-out of the settlement (meaning to exclude themselves from this class action settlement). The class list as of late October 2015 includes 306 individuals and this number may slightly increase by the time preliminary approval is granted. Each Settlement Class Member s share of the Net Settlement Fund shall be calculated by determining the total gross earnings of the Settlement Class Members - 9 -

11 Case 4:14-cv YGR Document 80-2 Filed 03/11/16 Page 11 of 26 (which will exclude opt-outs (individuals who complete a valid and timely Election Not to Participate in Settlement), other than Non-Participants with Actions Pending as defined in Paragraph 1.20, if any), and each Settlement Class Member will receive a proportional share of the Net Settlement Fund. (This is Net Settlement Fund divided by total gross earnings of all Settlement Class Members multiplied by the individual Settlement Class Member s total earnings.) There will also be a minimum amount for each Settlement Class Member of $100. Unless the Court modifies the amounts for the Class Representative Payment, the Class Counsel Fees and Expenses Payment, the payment to the Labor and Workforce Development Agency of the State of California (the LWDA ), the Settlement Administrator s reasonable fees and expenses, the parties will ensure that the Net Settlement Fund is no more than the amount described in Paragraph 1.3, which means that the proportional shares of Settlement Class Members allocated more than $100 will be adjusted proportionally to account for the minimum payment of $ Objections to Settlement: The Notice of Class Action Settlement sent to all Settlement Class Members will advise each Settlement Class Member of his/her right to object to all or any part of the Settlement Agreement. Any Settlement Class Member who wishes to present an objection must submit it in writing to the Court either by mailing them to the Class Action Clerk, United States District Court for the Northern District of California, 1301 Clay Street, Suite 400 S, Oakland, California, 94612, or by filing them in person at any location of the United States District Court for the Northern District of California. Objections must be filed or postmarked within thirty (30) calendar days from the date that the Notice of Class Action Settlement is mailed by the Settlement Administrator. The objection must contain the full name, current home (or mailing) address, and last four digits of the Social Security number of the objector, must clearly identify the

12 Case 4:14-cv YGR Document 80-2 Filed 03/11/16 Page 12 of 26 case name and number (Talton v. Luggage Services and Logistics, et al., Case No. CV YGR) and must state the grounds for the objection. If a Settlement Class Member submits a timely written objection, he or she may also appear or appear through counsel of his or her choice, paid at his or her own expense, and be heard at the time of the final approval hearing, if he or she wishes to do so, but only if he or she indicates in your objection that he or she intends to appear. If the Court overrules a Settlement Class Member s objection and he or she did not submit a timely and valid Election Not to Participate in the Settlement, he or she will be bound by the terms of the Settlement Agreement and receive a Settlement Share. The time to object shall be extended by ten (10) calendar days for any mailings returned to the Claims Administrator Challenges to Calculations: A Settlement Class Member may dispute the amount of his or her earnings total used to calculate the settlement payment by timely sending a written notice to the Settlement Administrator informing the Settlement Administrator of the nature of the dispute and providing any records or documentation of earnings that are different than the total used to determine his/her settlement share. In order to dispute the accuracy of the total earnings, the Settlement Class Member must return the Class Member Settlement Information Sheet (attached to the Notice of Proposed Class Action Settlement to be approved by the Court) to the Settlement Administrator within thirty (30) calendar days from the date that the Notice of Class Action Settlement is mailed by the Settlement Administrator, completed to inform the Settlement Administrator of the fact of the dispute and the basis for the Class Member s contention that different information is correct for the Class Member (including any documentary evidence that he or she has to support his or her contention). The time to challenge calculations shall be extended by ten (10) calendar days for any mailings returned to the Claims Administrator. In response to such a dispute, Defendants will

13 Case 4:14-cv YGR Document 80-2 Filed 03/11/16 Page 13 of 26 manually review their records to verify the information contained in the Settlement Class Member s file and Defendants payment records. Defendants records will have a rebuttable presumption of correctness. After consultation with the Settlement Class Member, Class Counsel, and Defendants, the Settlement Administrator will make a determination of the number of the Settlement Class Member s total earnings and that determination will be final, binding on the Settlement Class Member and Defendants, and non-appealable. A dispute regarding the underlying data used to calculate the settlement payment shall be considered timely only if raised by the Settlement Class Member within thirty (30) days of the Notice of Class Action Settlement being mailed by the Settlement Administrator Funding of Settlement: Within ten (10) business days after the settlement is final, as described in Paragraph 1.5, Defendants shall transfer the entire Settlement Fund and payment described in Paragraph 1.4 to the Settlement Administrator Payment Procedures: As soon as practical after Defendants deposit of the Settlement Fund and payment described in Paragraph 1.4 into the account created by the Settlement Administrator, the Settlement Administrator shall resolve all disputes as to the settlement payment owed to each Settlement Class Member (as provided in Paragraph 1.11, above) and shall pay all Settlement Class Members claims, Court-approved attorney s fees, costs, and enhancement awards. Payment of Court-approved attorney s fees, costs, and enhancement awards need not await distribution to Settlement Class Members Tax Treatment of Settlement Payments: The Parties shall comply with all legal requirements regarding the payments made to Settlement Class Members hereunder. Each recipient of any monies paid in accordance with this

14 Case 4:14-cv YGR Document 80-2 Filed 03/11/16 Page 14 of 26 Settlement Agreement is responsible for any taxes associated with the monies received by each recipient. a. The Settlement Administrator will prepare a Form 1099 for each Settlement Class Member, reflecting each Settlement Class Member s settlement payment. The Settlement Administrator will be responsible for preparing these forms correctly. Settlement Class Members will be responsible for correctly characterizing the compensation that they receive pursuant to the Form 1099 and for payment of any taxes owing on said amount, if any are owed. b. The Parties acknowledge and agree that neither Defendants nor their attorneys have made any representations regarding the tax consequences, or not, of the settlement payments made under this Agreement. Settlement Class Members agree to pay all federal, state or local taxes, if any, which are required by law to be paid with respect to the settlement payments. The Parties further agree that Defendants shall have no legal obligation to pay, on behalf of Settlement Class Members, any taxes, deficiencies, levies, assessments, fines, penalties, interests or costs, which may be required to be paid with respect to the settlement payments Tax Treatment of Class Representative Enhancement Award: The Class Representative will receive an IRS Form 1099 for his individual enhancement award prepared by the Settlement Administrator, and will be responsible for correctly characterizing this additional compensation for tax purposes and for payment of any taxes owing on said amount Undistributed Funds: In the event that any settlement checks are uncashed for one hundred eighty (180) days, then two things shall happen. First, for uncashed checks attributable to Settlement Class Members with total earnings of less than $5,000, the funds shall be paid as cy pres to Legal Aid Society Employment Law Center, 180 Montgomery Street, Suite 660, San Francisco, California

15 Case 4:14-cv YGR Document 80-2 Filed 03/11/16 Page 15 of 26 Second, for uncashed checks attributable to Settlement Class Members with total earnings of $5,000 or more, the funds shall first be used to attempt reasonable follow-up attempts to find the applicable class member and then paid to such class members who are located. Following reasonable attempts by Class Counsel and/or the Settlement Administrator to locate the relevant class members, the remaining funds payable to any class member who is not located shall be paid to the state unclaimed property fund in their names Election Not to Participate: If a Settlement Class Member does not want to participate in the Settlement, he or she must complete, date, sign and return a completed Election Not To Participate form (attached to the Notice of Proposed Class Action Settlement to be approved by the Court) within thirty (30) calendar days from the date that the Notice of Class Action Settlement is mailed by the Settlement Administrator. The time to complete an Election Not to Participate shall be extended by ten (10) calendar days for any mailings returned to the Claims Administrator. Individuals who execute a valid and timely Election Not to Participate form will not share in the Net Settlement Fund Non-Participants with Actions Pending Any settlement funds allocated to an individual who elects not to participate in the Settlement and, at the time of final approval, has another action pending in any venue against one or more of the Defendants or files an action against one or more of the Defendants within 60 days from the expiration of the opt-out period ( Non-Participants with Actions Pending ) shall revert to the Defendants. 2. NOTICE TO THE SETTLEMENT CLASS 2.1. Compilation of Class List: The Parties agree that within ten (10) business days after preliminary approval of this Settlement Agreement by the Court, Defendants will provide the Settlement Administrator the following most

16 Case 4:14-cv YGR Document 80-2 Filed 03/11/16 Page 16 of 26 up-to-date information about each Settlement Class Member in an electronic format: (1) name; (2) last known home address and telephone number; (3) Social Security Number; (4) contract dates; and (5) the total amount of gross earnings during the Class Period. The Settlement Administrator will perform address updates and verifications as necessary prior to the first mailing. This information shall be referred to as the Class Data List Dissemination of Notice of Class Action Settlement: Within ten (10) business days of its receipt of the Class Data List, the Settlement Administrator will send Settlement Class Members, by first-class mail, at their last known address, the Court-approved Notice of Class Action Settlement in the form attached hereto as Exhibit A, which will provide a statement of each Settlement Class Member s estimated payment (assuming all requests for Attorneys Fees, and Costs and enhancements are awarded in full). 3. RELEASE BY THE SETTLEMENT CLASS 3.1. Upon final approval by the Court, each Settlement Class Member will release Defendants, their current or former subsidiaries, predecessors, insurers, agents, employees, successors, assigns, officers, officials, directors, employers, attorneys, personal representatives, executors, and shareholders, including their respective pension, profit sharing, savings, health, and other employee benefit plans of any nature, the successors of such plans, and those plans respective current or former trustees and administrators, agents, employees, and fiduciaries, as well as the personal representatives or executors of any such persons, of and from any and all claims, rights, demands, charges, complaints, causes of action, obligations or liability of any and every kind that were asserted in the Second Amended Complaint filed in this action, including any claims against Defendants, or any of them, based on a theory of joint employment pursuant to statute or otherwise (the Released Claims )

17 Case 4:14-cv YGR Document 80-2 Filed 03/11/16 Page 17 of 26 The Released Claims include all claims described above, whether known or unknown. Thus, if you participate in the Settlement, then even if you discover facts in addition to or different from those that you now know or believe to be true with respect to the subject matter of the Released Claims, those claims will remain released and forever barred. Therefore, if you are a Class Member who does not submit a timely and valid Election Not to Participate in Settlement, then with respect to the Class Members Released Claims only, you expressly waive and relinquish the provisions, rights, and benefits of section 1542 of the California Civil Code, which reads: A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR. 4. ADDITIONAL RELEASE BY CLASS REPRESENTATIVE 4.1. In addition to the Release set forth in Paragraph 3.1, Plaintiff and Class Representative Alonzo Talton, for himself alone, will sign a separate Waiver and Release which releases Defendants and their affiliates, parent companies, subsidiaries, shareholders, officers, partners, directors, members, servants, employees, agents, attorneys, insurers, predecessors, representatives, accountants, past, present, and future, successors and assigns, and each and all of their respective officers, partners, directors, members, servants, agents, shareholders, employees, representatives, accountants, insurers, and attorneys, past, present, and future, and all persons acting under, by, through, or in concert with any of them, from any and all claims, debts, liabilities, demands, obligations, guarantees, costs, expenses, attorneys fees, damages, action or causes of action contingent or accrued, which may exist as of the date of the execution of this Settlement

18 Case 4:14-cv YGR Document 80-2 Filed 03/11/16 Page 18 of 26 Agreement. In connection therewith, Plaintiff will waive the provisions of California Civil Code Section 1542 which states: A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR. 5. DUTIES OF THE PARTIES PRIOR TO COURT APPROVAL 5.1. The Parties shall seek the Court s approval of this Settlement. Promptly upon execution of this Settlement Agreement, the Class Representative and Class Counsel, in cooperation with Defendants counsel, shall apply to the Court for the entry of a preliminary order which would accomplish the following: a. Schedule a final fairness hearing on the question of whether the settlement, including payment of Attorneys Fees and Costs, and the Class Representative s enhancement award, should be finally approved as fair, reasonable, and adequate as to the Settlement Class Members; b. Approve, as to form and content, the proposed Notice of Proposed Class Action Settlement; c. Direct the mailing of the Notice of Proposed Class Action Settlement by first class mail to the Settlement Class Members; d. Preliminarily approve the settlement subject only to the objections of Settlement Class Members and final review by the Court; e. Preliminarily approve the Settlement Administrator selected by Class Counsel as the Settlement Administrator and approving payment of the reasonable charges of the Settlement Administrator; f. Preliminarily approve Class Counsel s request for Attorneys Fees and Costs subject to final review of the Court; and

19 Case 4:14-cv YGR Document 80-2 Filed 03/11/16 Page 19 of 26 g. Preliminarily approve Class Counsel s request that the Class Representative receive an enhancement award in the amount of $7, DUTIES OF THE PARTIES FOLLOWING FINAL APPROVAL 6.1. Following final approval of the Settlement provided for in this Settlement Agreement, Class Counsel will submit a proposed final order and Judgment: a. Approving the Settlement, adjudging the terms thereof to be fair, reasonable, and adequate, and directing consummation of its terms and provisions; b. Approving Class Counsel s application for an award of Attorneys Fees and Costs; c. Approving the enhancement award to the Class Representative; d. Barring all Settlement Class Members from prosecuting against Defendants any individual or class claims arising from the Second Amended Complaint in this action, upon satisfaction of all payments and obligations hereunder; and e. Dismissing this Action against Defendants on the merits and with prejudice. 7. PARTIES AUTHORITY 7.1. The signatories hereto hereby represent that they are fully authorized to enter into this Settlement Agreement and bind the Parties hereto to the terms and conditions hereof. 8. MUTUAL FULL COOPERATION 8.1. The Parties agree to fully 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. The Parties shall use their best

20 Case 4:14-cv YGR Document 80-2 Filed 03/11/16 Page 20 of 26 efforts, including all efforts contemplated by this Settlement Agreement and any other efforts that may become necessary by order of the Court, or otherwise, to effectuate this Settlement Agreement and the terms set forth herein. 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 final approval of this Settlement Agreement. 9. NO PRIOR ASSIGNMENTS 9.1. 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. 10. NO ADMISSION Defendants have denied and continue to deny liability for the claims asserted. Neither this Settlement Agreement and any exhibit thereto, nor the MOU executed on behalf of the Parties, nor any other item pertaining to the settlement contemplated herein, shall be offered in any other case or proceeding as evidence of any admission by Defendants of any liability on any claims for damages or other relief. Any stipulation or admission by Defendants contained herein is made for settlement purposes only. In the event this Settlement is not finally approved, the Parties shall be restored to their respective positions as of June 17, Nothing contained herein, nor the consummation of this Settlement Agreement, is to be construed or deemed an admission of liability, culpability, negligence, or wrongdoing on the part of Defendants. Defendants specifically deny any liability. Each of the Parties hereto has entered into this Settlement Agreement with the intention to avoid further disputes and litigation with the attendant inconvenience and expenses

21 Case 4:14-cv YGR Document 80-2 Filed 03/11/16 Page 21 of CONSTRUCTION The Parties hereto agree that the terms and conditions of this Settlement Agreement are the result of lengthy, intensive arms-length negotiations between the Parties. The Parties further agree that this 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. 12. CAPTIONS AND INTERPRETATIONS 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. 13. MODIFICATION This Settlement Agreement may not be changed, altered, or modified, except in writing and signed by the Parties hereto, and approved by the Court. This Settlement Agreement may not be discharged except by performance in accordance with its terms or by a writing signed by the Parties hereto. 14. INTEGRATION CLAUSE This Settlement Agreement contains 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. 15. BINDING ON ASSIGNS This Settlement Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective heirs, trustees, executors, administrators, successors and assigns

22 Case 4:14-cv YGR Document 80-2 Filed 03/11/16 Page 22 of CLASS COUNSEL SIGNATORIES It is agreed that because of the large number of Settlement Class Members, it is impossible or impractical to have each Settlement Class Member execute this Settlement Agreement. As such, Class Counsel is signing on behalf of all unnamed Settlement Class Members. In addition, the Notice of Class Action Settlement, Exhibit A, 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. 17. USE AND DISCLOSURE OF SETTLEMENT The Parties and their attorneys agree not to publicize the terms of settlement or the lawsuit beyond taking those steps necessary to reach a final resolution and dismissal which steps include: (i) filing papers and motions with the Court necessary to obtain its good faith settlement approval; (ii) court appearances including motion hearings attendant to effectuating the settlement, class administration, and dismissal; and (iii) effectuating and facilitating required notices to the Class including communications with claims administrators and class members. Plaintiff agrees that neither he, nor his spouse or agents, shall publicize the terms of settlement or the lawsuit beyond taking the steps necessary to reach a final resolution and dismissal, as outlined in the immediately preceding paragraph. The Parties recognize that any voluntary settlement of a case styled as a class action is necessarily public in that the process involves regularly filed motions and papers in a public forum, public motion hearings, class notice and other mailings, opportunities to opt-out (meaning to exclude themselves from this class action settlement) or object, and the like, consistent with the Parties rights under applicable law. Notwithstanding these typical steps in the settlement process, Plaintiff and Defendants agree that neither they nor their attorneys of

23 Case 4:14-cv YGR Document 80-2 Filed 03/11/16 Page 23 of 26 record agents, immediate family members, friends, representatives or others acting on their behalves will publicize or comment on the settlement regarding information exchanged during the mediated confidential negotiation process and/or the complaint and facts alleged therein, the identity of the Parties, or the terms of settlement by means of the following: websites, blogs, s, social media, press conferences, print media, or other means of publication that are not part of the typical class administration, class notice, and settlement procedure allowed by statute and applicable law for approval and effectuation of the Court-approved settlement This provision does not prevent the Parties counsel from confirming their representation of their clients in the lawsuit, or the fact of and terms of settlement with existing, future, or prospective clients. Any reference to or description of the lawsuit on a law firm website of any Party s counsel of record, or any other law firm marketing publication or statement, shall refer to the case name only as delivery drivers vs. service recipient companies, without identifying the Parties by name, and may disclose the amount of the settlement. Any Party s counsel of record may refer to the case as a case involving a dispute pertaining to the status of alleged independent contractors. The Parties acknowledge and agree that non-public information about the business practices and business records of Defendants disclosed solely during the scope of privileged mediation proceedings and settlement negotiations ( Confidential Information ) will not be disclosed to any third parties and will be returned to Defendants, with no copies retained after the Court issues Final Approval of the Settlement. The Parties further acknowledge and agree that such Confidential Information has not and will not be used for any purpose other than for evaluating claims for purposes of entering into this Settlement Agreement

24 Case 4:14-cv YGR Document 80-2 Filed 03/11/16 Page 24 of COUNTERPARTS 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. 19. GOVERNING LAW The Parties agree that California law governs the interpretation and application of this Settlement Agreement. DATED: March 11, 2016 DATED: March 11, 2016 /s/ Alonzo Talton ALONZO TALTON Plaintiff and Class Representative LUGGAGE SERVICES AND LOGISTICS, LLC By:/s/ Todd Hunter Its CFO DATED: March 11, 2016 BAGGAGE AIRLINE GUEST SERVICES, INC. By:/s/ Todd Hunter Its CFO DATED: March 11, 2016 HOME SERV DELIVERY, LLC By:/s/ Todd Hunter Its CFO

25 Case 4:14-cv YGR Document 80-2 Filed 03/11/16 Page 25 of 26 DATED: March 11, 2016 BAGS, INC. By:/s/ Todd Hunter Its CFO DATED: March 11, 2016 DELIVERY OUTSOURCING, LLC By:_Kenn Gluckman Its Acting General Counsel APPROVED AS TO FORM AND CONTENT MARLIN & SALTZMAN, LLP By: /s/ Stanley D. Saltzman Christina A. Humphrey Stanley D. Saltzman MARLIN & SALTZMAN, LLP Attorneys for Plaintiff and the Class PERKINS COIE LLP By: /s/ Sue J. Stott Sue J. Stott PERKINS COIE LLP Attorneys for Defendants Luggage Services and Logistics, LLC, Baggage Airlines Guest Services, Inc., HomeServ Delivery, LLC and Bags, Inc

26 Case 4:14-cv YGR Document 80-2 Filed 03/11/16 Page 26 of 26 PACIFIC EMPLOYMENT LAW LLP By: /s/ Maureen K. Bogue Maureen K. Bogue PACIFIC EMPLOYMENT LAW LLP Attorneys for Delivery Outsourcing, LLC