Moniz v. Adecco U.S., Inc.
| Decision Date | 30 November 2021 |
| Docket Number | A159410,A160133,A159978 |
| Parties | RACHEL MONIZ, Plaintiff and Respondent, v. ADECCO USA, INC., Defendant and Respondent; PAOLA CORREA et al., Movants and Appellants. ADECCO USA, INC., Defendant, Cross-complainant and Appellant, v. PAOLA CORREA et al., Cross-defendants and Appellants. |
| Court | California Court of Appeals Court of Appeals |
RACHEL MONIZ, Plaintiff and Respondent,
v.
ADECCO USA, INC., Defendant and Respondent;
PAOLA CORREA et al., Movants and Appellants.
ADECCO USA, INC., Defendant, Cross-complainant and Appellant,
v.
PAOLA CORREA et al., Cross-defendants and Appellants.
A159410, A160133, A159978
California Court of Appeals, First District, Fourth Division
November 30, 2021
San Mateo County Superior Court Nos. 17-CIV-01736, 17-CIV-01736 Hon. Marie S. Weiner, Trial Judge
Baker Curtis & Schwartz, Christopher D. Baker, Deborah R. Schwartz; Outten & Golden, Jahan C. Sagafi, Rachel Williams Dempsey, Julio Sharp-Wasserman for Movant and Appellant.
Schneider Wallace Cottrell Konecky, Carolyn Cottrell, David C. Leimbach, Kyle G. Bates for Plaintiff and Respondent.
Jackson Lewis, Adam Y. Siegel, Scott P. Jang, Mia Farber, Dylan B. Carp for Defendant and Respondent.
BROWN, J.
Under the Private Attorneys General Act of 2004 (PAGA) (Lab. Code, [1] § 2698 et seq.), an employee aggrieved by his or her employer's alleged Labor Code violations may be authorized to act as an agent of the Labor Workforce and Development Agency (LWDA) to bring a civil action to recover civil penalties. If an
aggrieved employee settles such an action, the trial court must review and approve the settlement, and the civil penalties are distributed 75 percent to the LWDA and 25 percent to the aggrieved employees. (§ 2699, subds. (i), (l)(2).)
In separate PAGA representative actions, Rachel Moniz and Paola Correa sued respondent Adecco to recover civil penalties for Adecco's alleged violations of the Labor Code. Moniz settled her case first, and the trial court approved the settlement. In this current set of consolidated appeals, Correa attacks many aspects of the settlement process and approval, including the manner in which the trial court treated objections to the settlement by Correa and the LWDA, the standard used by the trial court to approve the settlement, numerous alleged legal deficiencies of the settlement, and its overall fairness. She also contests the trial court's ruling denying her attorney fees and an incentive payment.
We find that the trial court applied an appropriate standard of review by inquiring whether the settlement was "fair, adequate, and reasonable" as well as meaningful and consistent with the purposes of PAGA, and we reject many of Correa's contentions regarding the settlement's purported substantive and procedural deficiencies. Nonetheless, we reverse the judgment because we cannot infer from the record that the trial court assessed the fairness of the settlement's allocation of civil penalties between the affected aggrieved employees or whether such allocation comports with PAGA.
BACKGROUND
I. The Parties
Defendant Adecco is a staffing firm that supplies temporary labor to a variety of companies. Adecco hires temporary employees called "Associates" and full-time employees called "Colleagues." Moniz was a Colleague who managed Adecco's relationship with Google, and Correa was an Associate assigned to work at Google. Moniz worked for Adecco until spring of 2016, and Correa worked for Adecco until December 2016.
II. Doe and Moniz
In December 2016, John Doe filed a PAGA complaint against Google in San Francisco Superior Court (Doe, et al. v. Google, et al. (Super Ct. S.F. City & County, 2016, No. CGC-16-556034) (Doe)). He alleged that Google's non-disclosure agreements, policies, and practices violated numerous provisions of the California Labor and Business and Professions Codes.
On February 1, 2017, Moniz filed a PAGA notice with the LWDA alleging that Adecco maintained and implemented unlawful limitations on the disclosure of information in violation of the Labor Code. For example, she stated that Adecco impermissibly required her to agree to several illegal terms in Adecco's "Employment Agreement for Colleagues in California." Moniz's PAGA notice stated that she intended to file a complaint against Adecco on behalf of "all current and former employees, including but not limited to 'Colleagues,' who worked for Adecco in California."
On February 14, 2017, Correa submitted to the LWDA a PAGA notice alleging, among other things, that Adecco's non-disclosure agreements, policies, and practices violated sections 96, subdivision (k) (96(k)), 98.6, 232, 232.5, 432.5, 1102.5, and 1197.5, subdivision (k) (1197.5(k)). Correa's PAGA notice incorporated the facts alleged in Doe. In March 2017, John Doe added Correa as a plaintiff and added Adecco as a defendant in Doe. The Doe plaintiffs alleged that the defendants' confidentiality rules prevent employees from engaging in lawful conduct during non-work hours and violated state statutes entitling employees to disclose wages, working conditions, and illegal conduct, including sections 96(k), 98.6, 232, 232.5, 1102.5, and 1197.5(k).
Moniz filed her PAGA representative action in San Mateo County Superior Court in April of 2017 (Moniz v. Adecco USA, Inc. (Super Ct. San Mateo County, 2017, No. 17-CIV-01736) (Moniz)). She alleged that Adecco violated sections 232, 232.5, 432.5, and 1102.5, and 1197.5(k) by requiring employees to sign a form employment agreement that prohibited disclosure of wages, working conditions, and non-public information of commercial value. The following month, Moniz served Correa with a notice of related case stating that Moniz and Doe "involve[d] the same parties and [are] based on the same or similar claims," and arose "from the same or substantially identical transactions."
In both Doe and Moniz, Adecco demurred on the basis that all the plaintiffs' claims were subject to federal "Garmon preemption." (San Diego Unions v. Garmon (1959) 359 U.S. 236.)
The San Francisco Superior Court sustained the demurrers before it and ruled that nearly all the plaintiffs' claims were subject to Garmon preemption. The Doe plaintiffs appealed from the subsequent judgment.[2] Meanwhile, the court in Moniz overruled Adecco's demurrer.
While the Doe appeal was pending, Correa sought to intervene in Moniz.[3] She argued that she was entitled to mandatory intervention because she had an interest relating to the property or transaction at issue, because the eventual disposition in Moniz could impair her ability to protect that interest, and because Moniz did not adequately represent that interest. The trial court denied Correa's motion on timeliness grounds and because she did not meet the requirements for mandatory or permissive intervention. This court affirmed the trial court's denial order, holding that Correa had not established she was entitled to mandatory intervention because she did not
establish the inadequacy of Moniz's representation. (Moniz v. Adecco USA, Inc. (February 11, 2020, A155474) [nonpub. opn.] (Moniz I).) We also affirmed the denial of her request for permissive intervention because the trial court did not abuse its discretion in finding that the interests opposing intervention outweighed Correa's alleged interest in the action.
Meanwhile, in the trial court, Moniz and Adecco disputed whether Moniz's PAGA notice and complaint encompassed claims relating to employment agreements signed by both Colleagues and Associates, and Adecco sought to limit the scope of Moniz to claims for civil penalties for alleged violations of sections 232, 232.5, 432.5, 1102.5, and 1197.5(k) committed against Colleagues who signed the same employment agreement that Moniz signed.[4]The parties stipulated that these issues could be resolved through motions for summary adjudication (Code of Civ. Proc., § 437c, subdivision (t)). On Moniz's motion for summary adjudication, characterizing the "issue presented" to be "the scope of the representative action," the trial court ruled that Moniz adequately exhausted her administrative prerequisites to pursue PAGA claims on behalf of Adecco Colleagues and Associates "for the time period February 1, 2016 to the present for alleged violations of Labor Code Sections 232, 1197.5(k), 232.5, 1102.5, and 432.5." The trial court denied Adecco's motion seeking to establish that "[t]he scope of 'aggrieved persons' in Plaintiff's
Private Attorneys General Act claims (First through Fifth Causes of Action) is limited to Adecco Colleagues who signed the same Employment Agreement for Colleagues in California as that executed by Ms. Moniz." After this ruling, the parties conducted additional discovery regarding Associates.
III. The Moniz Settlement Approval
On or around May 13, 2019, after two mediation sessions with an experienced mediator, the Moniz parties moved for approval of a settlement agreement they reached through mediation. The trial court held a hearing and declined settlement approval, finding that the agreed-upon release was too broad because it included a release of aggrieved employees' non-PAGA claims, including claims under Business & Professions Code section 17200 and federal law. The court required the parties to submit information regarding their costs and fees, and it set a further approval hearing.
On June 3, 2019, the parties executed a settlement agreement with a narrowed release. On July 3, 2019, after an additional hearing, the trial court approved the settlement and entered judgment. Thereafter, the LWDA moved ex parte to intervene, objecting to the settlement and seeking to vacate the judgment because, among other things, the final settlement had not been timely served on the LWDA. At an ex parte hearing, the LWDA informed the trial court that it did not want to intervene or take over prosecution of the case, but it desired to present a postjudgment motion to vacate. Correa also filed a postjudgment motion to vacate the judgment. After a hearing, the trial court
vacated the judgment because timely notice of the settlement had not been provided to the LWDA.
On September 6, 2019, Moniz filed a renewed motion to approve the settlement, which Adecco...
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