NOTICE OF CLASS ACTION SETTLEMENT MarketStar Wage and Hour Cases Case No. JCCP004820 If you were employed by either MarketStar Corporation or Pierce Promotions and Events Management LLC in the State of California between November 10, 2010 and May 24, 2017, you may be eligible to receive a payment from a class action settlement. A court authorized this notice. This is not a solicitation from a lawyer. A settlement has been reached in a class action lawsuit against MarketStar and Pierce that affects your rights. The settlement resolves related class action lawsuits against MarketStar Corporation ( MarketStar ) and Pierce Promotions and Events Management LLC ( Pierce ) (together, the Defendants ) alleging that they did not pay employees all the wages they were owed. The Court still has to decide whether to finally approve the settlement. Payments will be made only if the Court approves the settlement and after any appeals are resolved. Please be patient. YOUR RIGHTS AND OPTIONS REGARDING THE SETTLEMENT DO NOTHING AND RECEIVE YOUR SHARE OF THE SETTLEMENT AWARD REQUEST TO BE EXCLUDED FROM THE SETTLEMENT OBJECT TO THE SETTLEMENT DISPUTE THE CALCULATION OF YOUR WORKWEEKS You do not need to do anything to receive a share of the Settlement. If you qualify for a payment, you will receive a Settlement Payment, and you will give up any rights to sue the Defendants separately about the same legal claims contained in this Lawsuit. See Sections 24-26 below. Ask to be excluded by August 15, 2017. Get no payment. Retain the right to file your own lawsuit for the same claims. See Section 10 below. File an objection by August 15, 2017 that the settlement is unfair or inadequate. See Section 11 below. Your settlement share is calculated based on the number of weeks you worked for Defendants. This number was included on your postcard notice. If you need to know this number, you can call 1-866-742-4955. If you believe the calculation of your work weeks is incorrect, you must write to the Settlement Administrator at RG/2 Claims Administration LLC, Attn: MarketStar Wage and Hour Cases, P.O. Box 59479, Philadelphia, PA 19103-9479 and provide proof in support of your claim by July 31, 2017. See Section 24 below. Please read this Notice carefully. It describes your rights, and the steps you have to take to receive money from the settlement or to exclude yourself from the settlement. 1
1. What is this class action about? BASIC INFORMATION On November 10, 2014, Plaintiff Malachi Smith filed a lawsuit in Riverside County Superior Court and on December 24, 2014, Plaintiffs Gregg Scott McGrath, Timothy Robert Bludworth, and Elias Ruiz filed a lawsuit in Alameda County Superior Court. Both lawsuits were coordinated into one proceeding before the Alameda County Superior Court (the Lawsuit ). The Lawsuit alleges that certain employees of Defendants in California who were employed as sales representatives, kiosk managers, and/or retail sales managers on behalf of Defendants client, Verizon Communications, Inc., from November 10, 2010 through May 24, 2017 failed to receive pay for all hours worked, pay for all commissions earned, legally compliant meal and rest periods, reimbursements for all necessary job expenditures, accurate wage statements, and all earned wages due and owing immediately upon termination of employment. Defendants position is that they paid their employees all amounts due and owed, provided all meal and rest breaks, and otherwise fully complied with the law. 2. How do MarketStar and Pierce respond? Defendants have denied and continue to deny all of the Plaintiffs allegations. They contend that the lawsuit could not be maintained as a class action if it were litigated and that they have not violated the California Labor Code or the California Unfair Competition Law. 3. What is a class action and who is involved? In a class action lawsuit, one or more people called Class Representatives sue on behalf of other people who have similar claims. The Class Representatives in this case are Malachi Smith, Greg Scott McGrath, Timothy Robert Bludworth, and Elias Ruiz. The employees they represent are the Class or Class Members. The Class Representatives and all the Class Members are called the Plaintiffs. MarketStar and Pierce are called the Defendants. One court resolves the issues for everyone in the Class, except for those people who request to exclude themselves from the Class. 4. Why is this lawsuit being settled? After lengthy negotiations before two mediators, the Class Representatives and Defendants, they agreed to settle this case rather than go to trial. The settlement represents a compromise of disputed claims and is not an admission that the Defendants violated the law. The parties and their attorneys believe the settlement is in the best interests of the class given the risks and expense of going to trial. Page 2 of 10
5. Has the Court decided who is right? No. The Court has not decided anything yet. 6. Who is the Settlement Administrator? The settlement administrator is a third party appointed by the Court to send this postcard notice, process and issue settlement checks, to maintain the settlement website, and otherwise administer the settlement. You may contact the settlement administrator to provide updated contact information, make corrections regarding your employment information at MarketStar or Pierce, or ask questions regarding the processing of settlement awards. You may contact the settlement administrator at: 7. Who is part of this Class? RG/2 Claims Administration LLC Attn: MarketStar Wage and Hour Class Action Settlement P.O. Box 59479 Philadelphia, PA 19103-9479 1-866-742-4955 YOUR RIGHTS AND OPTIONS The Class includes: all persons currently or formerly employed by Defendants MarketStar or Pierce in the State of California, as sales representatives, kiosk managers, and/or retail sales managers on behalf of Defendants client, Verizon Communications, Inc., from November 10, 2010 through and including May 24, 2017. The Settlement Class excludes all persons who timely opt out of the Settlement. (If you have filed or want to file your own lawsuit and not be part of this case, read Section 10 below). 8. What does the settlement provide? Defendants have agreed to pay a total settlement amount of $875,000 (the Gross Settlement Amount ) to settle the Lawsuit. The settlement will provide payments for claims for alleged violations of California laws and the Fair Labor Standards Act ( FLSA ), which is the federal wage-and-hour law. The following sums will be paid from the Gross Settlement Amount: (1) $20,000 in payments under the California Private Attorney General Act ( PAGA ); (2) Plaintiffs attorneys fees in an amount set by the Court, up to $306,250 ; (3) litigation expenses (including court costs) incurred on behalf of Plaintiffs and the Class in connection with the Lawsuit, in an amount to be set by the Court, not to exceed $35,000; (4) a service payment to the four Page 3 of 10
Class Representatives, Malachi Smith, Greg Scott McGrath, Timothy Bludworth, and Elias Ruiz, in an amount set by the Court not to exceed $5,000 to each of them, for their services in the Lawsuit, and (5) a reasonable amount set by the Court to the settlement administrator for administering the settlement, estimated to be approximately $10,000. (See Sections 18-21 for more information about these payments.) The amount of the Gross Settlement Amount remaining after these payments is the Net Settlement Fund. In return, Class Members who do not timely request to be excluded from the Class will release any claims they might have against Defendants that were or could have been raised in the lawsuit, based on the allegations in the lawsuit. For more information about the claims being released as part of the settlement, see Section 26 below. For more information about your estimated payment and the way it was calculated, see Sections 24-25 below. 9. How do I participate in the settlement? You do not need to do anything to participate. You will automatically receive a settlement payment and release claims against Defendants unless you request to be excluded from the settlement. 10. How do I request to be excluded from the settlement? If you wish to be excluded from the settlement, you must write the Settlement Administrator at the address specified above in Section 6 and request to be excluded. Your request must include: (1) your name, (2) the last four digits of your social security number, (3) your address, (4) your telephone number, (5) your written statement that you have reviewed the notice and request to be excluded from the Settlement, and (6) your dated signature. To be effective, your request must be postmarked no later than August 15, 2017. If you do not complete and mail on time a valid request to be excluded from the settlement, you will be bound by all terms and conditions of the settlement, including its release of claims. If you do submit a timely and valid request to be excluded, you will not receive any money from the settlement, but you will retain the right to sue Defendants separately about the same legal claims in this lawsuit. 11. May I object to the settlement? If you believe the settlement is unfair or inadequate, you may object, personally or through an attorney, by mailing a copy of your objection to the Settlement Administrator at the address set forth above in Section 6. You cannot object to the settlement and exclude yourself from the settlement. To be effective, your objection must include: (1) your name, (2) the reason why you object to the settlement, (3) a statement of whether you intend to appear at the final approval hearing, (4) a list of any documents or witnesses you contend support your objection, and Page 4 of 10
(5) your dated signature. To be effective, your objection must be postmarked no later than August 15, 2017. Do not telephone the Court. If the Court rejects your objection, you will still be bound by the terms of the settlement. You will not be able to exclude yourself from the settlement. 12. When is the final fairness hearing? A final approval hearing on the fairness and adequacy of the proposed settlement will be held on September 27, 2017 at 2:30 p.m. in Department 17 of the Superior Court of California in and for the County of Alameda, located at 1221 Oak Street, Oakland, California. The final approval hearing may be continued without further notice. If the settlement is not approved, the lawsuit will continue to be prepared for trial or other judicial resolution. 13. When will I receive my payment? Payments will be sent 65 days after the Court gives the settlement its final approval. However, if any appeal is filed, payments will be delayed until appeals are finally resolved in favor of the settlement. Please be patient. 14. Do I have a lawyer in this case? THE LAWYERS REPRESENTING YOU The Court has determined that four law firms are qualified to represent you and all Class Members. Lawyers for these firms are called Class Counsel. They are experienced in handling similar cases. Their contact information is at the end of this Notice. 15. May I get my own lawyer? You do not need to hire your own lawyer because Class Counsel is working on your behalf. Nonetheless, you may hire your own lawyer if you wish. If you hire your own lawyer, however, you are responsible for paying for that lawyer. 16. How will Class Counsel be paid? You do not have to pay Class Counsel s fees and costs. The fees and expenses that the Court approves will be paid from the fund established by Defendants for the benefit of the Class. More information about the attorneys fees and costs is contained in Section 18 below. Page 5 of 10
TERMS OF THE SETTLEMENT 17. What have MarketStar and Pierce agreed to do? Defendants have agreed to pay $875,000 to resolve the claims of the Settlement Class (the Gross Settlement Fund ). Your share of the Net Settlement Fund will be determined by a formula based on the number of weeks you worked for Defendants in California between November 10, 2010 and May 24, 2017, as determined by Defendants records. ( Qualifying Work Weeks ). Precise details of the allocation formula are described in the Stipulation for Class Action Settlement & Release of Claims (the Settlement Agreement ), which is available on the settlement website, www.marketstarsettlement.com. RG2 Claims Administration (the Settlement Administrator ) will calculate each Settlement Class Member s potential share of the Net Settlement Fund, and each Class Member will get a pro-rata share. A description of the formula is below in Section 22. 18. How much will the attorneys get? Class Counsel will ask the Court for a maximum of $306,250 (or 35% of the Gross Settlement Fund) to pay for their attorneys fees in connection with their work in this case. Class Counsel will also request reimbursement of their costs and expenses that were advanced in connection with this case, currently estimated at a maximum of $35,000. Class members are not personally liable for any fees and costs. 19. What is a service award? In class actions such as this one, a court may provide the class representatives a service award in recognition of the time, effort, and risks the class representatives took to prosecute the class action. In the present case, the Settlement provides that the service awards will not exceed $5,000 each to Malachi Smith, Greg Scott McGrath, Timothy Robert Bludworth, and Elias Ruiz. 20. What are the PAGA payments, and why does the Labor Workforce Development Agency receive $15,000? California s Private Attorneys General Act of 2004 ( PAGA ) allows private citizens to step into the State s shoes and recover civil penalties for violations of California s Labor Code. Seventy-five percent of any such recovery must be given to the state. In this case, the Settlement provides for $20,000 in penalties, of which $15,000 (75%) is paid to the State as its share of the penalties recovered in this case. The remaining $5,000 is distributed to Class Members as part of the Net Settlement Fund. Page 6 of 10
21. How much will it cost to administer the Settlement? It is estimated that it will cost approximately $10,000 to fully administer the settlement. 22. How will the Net Settlement Fund be distributed to Class Members? The Net Settlement Fund, described above, will be distributed to Class Members by calculating the number of qualifying work weeks worked by each Class Member during the Class Period, and dividing that number by the sum of all qualifying work weeks worked by all Class Members to determine the share of the Net Settlement Fund to which each Class Member is entitled. Each Class Member will then receive that share of the Net Settlement Fund. For example, if there are a total of 4,000 workweeks worked by all Settlement Class Members during the Class Period, and a Settlement Class Member worked 100 workweeks during that period, then the Settlement Class Member will receive 2.5% of the Net Settlement Fund. Any amounts left after all participating Class Members are identified and paid (e.g., uncashed or unclaimed checks) will be distributed to Legal Aid Society of San Bernardino as the designated cy pres beneficiary of the Settlement. 23. Will I have to pay taxes on my award? One-third (33 and 1/3%) of your award will be considered to be wages and will be reported on IRS Form W-2 with all appropriate taxes withheld. The rest of your award will be reported on IRS Form 1099. You should consult a tax professional for more information about your own specific situation. 24. How will my share of the settlement be calculated? Your share of the settlement will be calculated based on the total number of qualifying work weeks you worked during the Class Period To confirm the number of workweeks that Defendants records show that you worked, you can call 1-866-742-4955. This is also the number reported on your postcard notice, which you should have received in the mail. If this information is incorrect and you wish to correct the information, you must submit a signed, written statement explaining why you dispute this information. Attach copies (not originals) of any relevant documents supporting your dispute. You must mail the signed and completed statement to the Settlement Administrator at the address set forth above in Section 6 no later than July 31, 2017. Page 7 of 10
If your signed and completed statement is not postmarked by this date, you will not be able to dispute the calculation of your settlement share. After consultation with you, Class Counsel, and Defendants, the settlement administrator will make a final determination that will be binding on you and you will not be able to appeal. 25. What is my estimated share of the settlement? Based on the records supplied to the settlement administrator, the estimated settlement award is $68.08 per work week. Please note that this amount may change depending on various factors, including the number of class members who request to be excluded from the settlement. RELEASE OF CLAIMS 26. What claims are being released as part of the settlement? All participating class members (all class members other than those who validly request to exclude themselves from the settlement) will be releasing their right to sue Defendants for the claims in this lawsuit. The release generally covers all claims or causes of action against Defendants, within the specified time period, that are pled in, or reasonably arise from the facts alleged in the complaints, including Labor Code claims for wages, commissions, overtime, meal and rest period premiums, unpaid expenses, failure to properly calculate the regular rate of pay, damages, unpaid costs, penalties (including late payment penalties), liquidated damages, punitive damages, interest, attorneys fees, litigation expenses, restitution, or equitable relief; claims under the California Unfair Competition Law; claims under PAGA; claims under the FLSA, though FLSA claims will only be released by those class members who sign a settlement check. The full language of the release is available www.marketstarsettlement.com, and in the fully-executed settlement agreement. FINAL SETTLEMENT APPROVAL HEARING 27. When will the Court consider whether to finally approve the settlement? The Court will hold a hearing in Department 17 of the Superior Court of California in and for the County of Alameda, located at 1221 Oak Street, Oakland, California, on September 27, 2017 at 2:30 p.m., to decide whether to finally approve the Settlement. At that time, the Court will also decide whether to approve Class Counsel s request for attorneys fees and reimbursement of costs, and the Class Representatives service awards. It is not necessary for you to appear at this hearing. If you have timely submitted an objection to the Settlement and a notice of intent to appear, you may appear at the hearing Page 8 of 10
to argue your objection to the Court. Any attorney who will represent you must file a notice of appearance with the Court and serve the notice of appearance on Class Counsel and counsel for Defendants, on or before September 20, 2017 (one week before the hearing). You will be solely responsible for the fees and costs of your own attorney. The Final Settlement Approval hearing may be postponed without further notice to the Class. Check back on the settlement website for details. If the settlement is not approved, the lawsuit will continue to be prepared for trial or other judicial resolution. 28. How do I get more information? FURTHER INFORMATION This Notice provides a summary of the basic terms of the settlement. For the precise terms and conditions of the settlement, you should review the detailed Settlement Agreement which is available on the settlement website (www.marketstarsettlement.com). For a small fee, all the pleadings and other records in this litigation, including the Settlement Agreement, may be examined online on the Alameda County Superior Court s website, known as DomainWeb, at https://publicrecords.alameda.courts.ca.gov/prs/. After arriving at the website, click the Search By Case Number link, then enter JCCP004820 as the case number and click SEARCH. Images of every document filed in the case may be viewed (for a charge) through the Register of Actions. You may also view images of every document filed in the case free of charge by using one of the computer terminal kiosks available at each court location that has a facility for civil filings. In addition, court-filed settlement documents can be obtained by contacting Plaintiff/Class Counsel: CHAVEZ & GERTLER LLP Jonathan E. Gertler Samuel P. Cheadle 42 Miller Avenue Mill Valley, California 94941 Tel: (415) 381-5599 Fax: (415) 381-5572 KALUDI INSDORF LAW GROUP Ike Kaludi 828 San Pablo Ave. Suite 109 Albany, CA 94706 Tel: (415) 967-4900 Fax: (415) 967-4901 JUSTICE LAW CORPORATION Douglas Han 411 N. Central Ave., Suite 500 Glendale, CA 91203 Tel: (818) 230-7502 Fax: (818) 230-7259 LAWYERS FOR JUSTICE, PC Edwin Aiwazian 410 Arden Ave, Suite 203 Glendale, CA 91203 Tel: (818) 265-1020 Fax: (818) 265-1021 Page 9 of 10
ALL INQUIRIES REGARDING THIS LITIGATION SHOULD BE MADE TO THE SETTLEMENT ADMINISTRATOR OR CLASS COUNSEL. PLEASE DO NOT TELEPHONE THE COURT OR THE OFFICE OF THE CLERK FOR INFORMATION REGARDING THIS SETTLEMENT. BY ORDER OF THE ALAMEDA COUNTY SUPERIOR COURT OF THE STATE OF CALIFORNIA Page 10 of 10