United States District Court, D. Nevada
DANIEL ACUNA and JERRY SHAFFER, as individuals and on behalf of others similarly situated, Plaintiffs,
So. Nev. T.B.A. Supply Co., a Nevada corporation, doing business as Ted Wiens Tire & Auto Centers, Defendant.
ORDER RE: MOTION FOR PRELIMINARY APPROVAL OF CLASS
FOLEY, JR. UNITED STATES MAGISTRATE JUDGE
matter is before the Court on the parties' Joint Motion
to Approve Settlement (ECF No. 63) and Amended Joint Motion
to Approve Settlement (ECF No. 78), filed on March 9, 2018
(hereinafter “Joint Motion” and
“Amended Joint Motion”).
parties filed their Joint Motion to Approve Settlement on
March 20, 2017. On November 29, 2017, the parties filed a
Notice, Consent, and Reference of a Civil Action to a
Magistrate Judge (ECF No. 68) which was approved by the Chief
District Judge on December 4, 2017. This case has been
assigned to the undersigned Magistrate Judge to conduct all
proceedings and order entry of final judgment. The Court
conducted a hearing on this matter on January 11, 2018.
the January 11th hearing, Plaintiffs filed a Supplemental
Brief (ECF No. 74), in support of their request for an award
of attorney's fees and to clarify the request for
reimbursement of litigation costs. The parties also filed a
Supplement to the Joint Motion (ECF No. 75) on February 2,
2018 which included as an amendment to the settlement
agreement, a revised Uniform Laundering Fee Settlement Claim
Form and a Request for Exclusion from the Rule 23 Uniform
February 2, 2018, the Court ordered the parties to clarify
the Rule 23 subclass, the release of claims of members of the
Rule 23 subclass, and the payment of awards to Rule 23 class
members. Order (ECF No. 76). The parties addressed
these matters in the Amended Joint Motion (ECF No.
Daniel Acuna and Jerry Schaffer alleged in their amended
complaint that Defendant So. Nev. T.B.A. Supply Co., doing
business as Ted Wiens Tire & Auto Centers (“Ted
Wiens”), had a company-wide policy of deducting $7.50
from employees' paychecks for cleaning their
company-issued uniforms. Amended Complaint (ECF No.
6). Plaintiffs allege that this policy violates Nevada
Revised Statute (NRS) § 608.165 which states:
All uniforms or accessories distinctive as to style, color or
material shall be furnished without cost, to employees by
their employer. If a uniform or accessory requires a special
cleaning process, and cannot be easily laundered by an
employee, such employee's employer shall clean such
uniform or accessory without cost to such employee.
gave employees the option of cleaning their uniforms at their
own expense or participating in the uniform rental plan
pursuant to which Defendant deducted the $7.50 from their
paychecks. Plaintiffs allege that employees have a
private right of action against their employer for the
violation of this statute. They argue that Defendant violated
this statute because their uniforms became soiled with grease
and other chemicals and could not be adequately cleaned by
ordinary household laundering processes. Defendant disputes
whether a violation of NRS § 608.165 gives rise to a
private right of action, or that employee uniforms required a
special cleaning process.
amended complaint identified a “Laundry Fee
Class” consisting of those employees who had $7.50
deducted from their paychecks. Id. at ¶17.a.
Plaintiffs alleged that as a result of the Laundry Policy
some employees' pay could be reduced below the federal
minimum wage required by 29 U.S.C. § 206(a)(1)(c).
Id. at ¶ 37. They further alleged that the
Laundry Policy had the effect of depriving quitting or
discharged employees of all the wages due to them in
violation of NRS §§ 608.020, 608.050 and 608.110.
amended complaint also identified a “Minimum Wage
Class.” Id. at ¶ 17.b. Plaintiffs alleged
that Mr. Acuna and possibly other employees were paid an
hourly wage less than Nevada's $7.25 minimum wage in
violation of NRS § 608.260 vis-a-vis Nevada's
Constitution, Article 15, Section 16.A. Id. at
¶ 42 Plaintiffs alleged that a class should be
certified pursuant to Fed.R.Civ.P. 23(b)(3) for all employees
who were not paid the correct minimum wage under Nevada law.
Id. at ¶ 17.b. The amended complaint also
identified a “Technicians Class” which consisted
of technician employees who were improperly classified as
“exempt” from the overtime pay requirements of
the Fair Labor Standards Act (“FLSA”).
Id. at ¶¶ 17.c., 18. Alternatively,
Defendant allegedly classified the technicians as
“non-exempt, ” but failed to pay them overtime
wages required by the FLSA. Id. at ¶ 18. The
amended complaint sought certification of an FLSA collective
action class consisting of all “technicians”
employed by Defendant since at least 2011.
amended complaint alleged causes of action for (1) unpaid
minimum wages and overtime pay pursuant to pursuant to 29
U.S.C. § 206(a)(1)(C) and 207; (2) monies illegally
deducted from the Plaintiffs' and other employees'
paychecks for uniform laundering pursuant to NRS §§
608.165, 608.020, 608.050 and 608.110, and for unpaid minimum
wages pursuant to NRS § 608.260 vis-a-vis Article 15,
Section 16.A of the Nevada Constitution; (3) unjust
enrichment and (4) conversion. Id. at ¶¶
filed a motion to partially dismiss the amended complaint on
the grounds that (1) the claims are barred by the statute of
limitations; (2) NRS §§ 608.020, 608.050 and
608.110 do not give rise to a private cause of action under
Nevada law; and (3) the Laundry Policy did not violate NRS
608.165 or give rise to a claim for failure to pay minimum
wages under 29 U.S.C. § 206(a)(1)(C). Motion to
Dismiss (ECF No. 16). Plaintiffs filed a motion for
class certification pursuant to Fed.R.Civ.P. 23(b)(3) and 29
U.S.C. § 216(b) in which they requested certification of
(1) a “Laundry Fee Class” pursuant to Rule
23(b)(3); (2) a “Minimum Wage Class” pursuant to
Rule 23(b)(3); and (3) a “Technician Class”
pursuant to 29 U.S.C. § 216(b). Motion for Class
Certification (ECF No. 23). Both parties filed motions
for partial summary judgment with respect to the laundry
parties state that they exchanged written discovery requests
and responses, and that Plaintiffs obtained extensive
personnel records, wage records, and other pertinent
documents from the Defendant. The parties thereafter
participated in a mediation conference on January 25, 2017
which resulted in the proposed settlement agreement.
Defendant agrees to pay a maximum of $295, 000.00 in ten (10)
equal monthly installments which may vary by up to 5 percent
so long as the total payment does not exceed $295, 000.00.
The proposed settlement provides that attorney's fees,
litigation costs including the amount to be paid for the
services of the the Claims Administrator, and the enhancement
payments to the class representatives, will be deducted from
the total settlement payment, leaving an estimated $182,
900.00 for payment to class members who participate in the
settlement. Payments will be made on a pro rata basis.
Joint Motion, at 3; Amended Joint Motion,
at 18, 25, 27.
to the “Stipulation and Agreement for Settlement and
Release of Fair Labor Standards Act Collective Action and
Settlement and Release of Claims in Accompanying Class
Action” (“Settlement Agreement”), Joint
Motion, Exhibit 1, and the second amended stipulation
thereto, Amended Joint Motion, Exhibit 5, the
parties request certification of two FLSA opt-in subclasses
under 29 U.S.C. § 216(b) which are defined as follows:
(1) The “Mechanics Subclass, ” for which
Plaintiff Acuna is the Class Representative, is comprised of
those present and former employees of Defendant who, during
the Class Period of March 2, 2013, through January 31, 2017,
performed automobile maintenance and repair; were and are
paid mostly by commissions; and for whom Defendant claims the
retail/service commission exemption under the FLSA and Nevada
law. Settlement Agreement at ¶ 1.i.
(2) The “Technicians Subclass, ” for which Jerry
Shaffer is the Class Representative, consists of those
present and former employees who, during the Class Period,
performed either (a) commercial tire repair and servicing or
(b) specific types of automobile servicing, but not the same
work as Mechanics; these employees all were and are paid at
hourly rates supplemented by commissions. Id. at
Amended Joint Motion, at 9.
parties also request the preliminary certification of a
Uniform Subclass pursuant to Rule 23 of the Federal Rules of
Civil Procedure which is defined as follows:
The “Uniform Subclass” is those persons employed
by Defendant during the Class Period of March 2, 2013 to
January 31, 2017 who paid, through payroll deductions, fees
to cover the costs of laundering their uniforms. Id.
at ¶ 1.k.
parties have clarified in the amended joint motion that they
do not seek to certify the “Mechanics Subclass”
or “Technician Subclass” as Rule 23 subclasses.
Members of the Mechanics Subclass and Technician Subclass who
are also members of the Uniform Subclass, however, will be
deemed to release their state law claims relating to the
laundering of uniforms if they do not request exclusion from
the Rule 23 class action settlement.
parties have also clarified that the only claims being
settled by members of the Uniform Subclass are those alleging
that Defendant violated Nevada law by charging them for
laundering their uniforms. Unless a Uniform Subclass member
requests exclusion from the Rule 23 class action settlement,
he or she will be bound by the settlement and will be
eligible to receive monies from the settlement as set forth
in paragraphs 1.1., 20.a. (iii) and (iv), and 20.b. (ii) of
the Settlement Agreement. Amended Joint Motion, Exhibit
5, at ¶ 2. The parties have agreed to amend
Paragraph 1.bb. of the Settlement Agreement to make clear
that only claims arising under Nevada law will be released
pursuant to the settlement of the Uniform Subclass claims.
Id. at ¶ 4. The parties have also clarified
that the exclusion process in Paragraph 32 of the Settlement
Agreement applies only to the Rule 23 Uniform Subclass.
Id. at ¶ 5.
reserves the right to oppose class certification in the event
the action proceeds on its merits. “This would occur if
the Court did not approve the Settlement, or Defendant
exercises its right to rescind and void the Settlement in the
event that more than ten percent (10%) of the Class members
object, opt out, and do not return a valid claim form.”
Settlement Agreement, at ¶ 21. The parties
state that approximately 259 present or former employees are
eligible for one or more of the proposed subclasses.
Joint Motion, at 7.
parties propose that the maximum payment of $295, 000.00 be
apportioned and paid as follows: (1) $97, 350.00 to Class
Counsel as attorney's fees; (2) $14, 600.00 to Class
Counsel for costs, which includes a payment of up to $10, 000
to Swarts & Swarts, CPA, as Claims Administrator; and (3)
$1, 000.00 each to Plaintiffs Acuna and Schaffer for their
services as class representatives. Amended Joint
Motion, at 18-27. If the Court approves a lower amount for
attorney's fees, costs or payments to the Plaintiffs as
class representatives, then the difference shall be added to
the amount available for payment to class members.
Settlement Agreement, at ¶ 25.
Settlement Agreement provides that payments to class members
will be made from three sub-funds allocated to the Mechanics
Subclass, Technicians Subclass and Uniform Subclass.
Id. at ¶ 20.a. (ii). The amount of payments to
subclass members shall be determined by the Claims
Administrator on the basis of the following procedures and
Subclass and Technicians Subclass members who return signed,
valid Claim/Consent and Release Forms will receive shares of
the Mechanics or Technicians Subclass funds calculated with
reference to a percentage of the portion of the Settlement
Fund allocated to the Mechanics or Technicians Subclass
members that corresponds to the number of full or partial
calendar months each Mechanics or Technician Subclass member
was employed by Defendant during the Class Period. The
following information will be obtained from Defendant's
records to determine the award to each potential class
member: The total number of full or partial calendar months
all Mechanics or Technicians Subclass members were employed
during the Class Period; and the total number of full or
partial calendar months each Mechanics or Technicians
Subclass member was employed. Defendant will prepare a
spreadsheet for each subclass that lists (A) the actual
number of full and partial calendar months each subclass
member was employed during the Class Period; and (B) the
total number of full and partial calendar months all persons
in the subclass were employed during the Class Period. The
Claim/Consent and Release Form for each member of the
Mechanics or Technicians Subclass will inform the subclass
member of the number of full or partial calendar months that
the subclass member was employed and of the calculated
settlement payment. Id. at ¶20.a. (ii).
payment for each eligible member of the Mechanics Subclass or
Technicians Subclass will be based on the following formula:
(A) the number of full or partial calendar months each
subclass member was employed during the Class Period, (B)
divided by the total number of full work weeks all members of
the subclass were employed during the Class Period, to (C)
obtain the percentage of full or partial calendar months for
each member of the subclass. That percentage will then be
applied to the monies allocated to each subclass to determine
the amount of the subclass member's payment. Id.
at ¶ 20.a. (iv).
Uniform Subclass members will receive a percentage of the
monies allocated to the Uniform Subclass calculated with
reference to the number of full or partial calender months
the specific Uniform Subclass member was employed and had
deductions from his or her paychecks for uniform laundering
during the Class Period. The following information will be
obtained from Defendant's records to determine the
payment to each potential Uniform Subclass member: The total
number of full or partial calendar months of employment for
each person from whose paychecks Defendant deducted money for
uniform laundering during the Class Period; and the number of
full or partial calendar months of all Uniform Subclass
members' employment in which Defendant deducted from
paychecks for uniform laundering during the Class Period.
Id. at ¶ 20.a. (iii).
following formula will be used to calculate the payment for
each eligible member of the Uniform Subclass: (A) the number
of full or partial calendar months each subclass member was
employed during the Class Period and had deductions from his
or her paycheck for uniform laundering, (B) divided by the
total number of full work weeks all subclass members who were
employed during the Class Period and had deductions from
their paychecks for uniform laundering, to (C) obtain the
percentage of full or partial calendar months applicable to
each Uniform Subclass member's share of the total number
of full or partial months for which there were paycheck
deductions for uniform laundering during the Class Period.
That percentage will then be applied to the monies allocated
to the Uniform Subclass to determine the amount of the
subclass member's payment. Id. at ¶ 20.a.
Settlement Agreement, as amended, and the proposed Notice of
Settlement, Amended Joint Motion, Exhibit 6, provide
that the claims of putative members of the Mechanics or
Technicians Subclasses who do not return a completed
Claim/Consent Form and Release will not be released.
Settlement Agreement, ¶¶ 1.aa., 37. As
stated above, the only claims of the Rule 23 Uniform Subclass
members that will be released pursuant to the settlement are
Uniform Subclass members' state law claims relating to
paycheck deductions for uniform cleaning. Uniform Subclass
members who timely request exclusion from the settlement may
pursue their state law claims on an individual basis and will
be subject to any defenses available to the Defendant.
revised version of the Notice of Settlement, Amended
Joint Motion, Exhibit 6, still contains incorrect or
misleading information about the scope of claims that will be
released. First, paragraph 17, at page 4, states: “If
you are a member of one or more Subclasses, you will be bound
by the proposed settlement if it is approved, unless in some
cases you make a written Request for Exclusion in the manner
described below.” This paragraph is vague and could
cause confusion for members of the Mechanics and Technicians
Subclasses whose state and federal ...