Jaime Farias vs. Labor Resource Group, Inc

34-2022-00324254-CU-OE-GDS: Jaime Farias vs. Labor Resource Group, Inc 10/24/2025 Hearing on Motion for Final Approval of Settlement in Department 22

Tentative Ruling

** Due to the Court’s schedule, oral argument shall be heard on October 31, 2025 at 9:00 a.m. **

Plaintiff Jaime Farias’s (“Plaintiff”) motion for final approval of class and Private Attorneys General Act (“PAGA”) action settlement is UNOPPOSED and tentatively GRANTED, pending the final fairness hearing. (Code of Civ. Proc. § 382; Cal. Rules of Court, Rule 3.769.)

Status Conference (Compliance Hearing) is scheduled for 06/12/2026 at 10:30 AM in Department 22 at Gordon D. Schaber Superior Court.

The Court has provided specific direction on the information and argument the Court requires to grant a motion for preliminary approval of a class action settlement. The Parties shall carefully review the Checklist for Approval of Class Action Settlements and fully comply with each applicable item to ensure a prompt ruling from the Court.

Moving Counsel’s declaration fails to attest that they have reviewed the Court’s checklist and their briefing complies with the checklist, as required by Local Rule 2.99.05. The Court, in its discretion, has nonetheless considered Plaintiffs’ motion. Counsel is admonished that any future failure to include the attestation in counsel’s declaration may result in the denial of the motion without prejudice. (Local Rule 2.99.05(C).) Failure to comply with the checklist may lead to an order to show cause regarding sanctions and/or a reduction in the requested attorneys’ fee award. (Id., 2.99.05(D).)

NOTICE:

The Parties are encouraged to appear via Zoom with the links below:

To join by Zoom link - https://saccourt-ca-gov.zoomgov.com/my/sscdept22 To join by phone dial (833) 568-8864 ID 16184738886

Parties requesting services of a court reporter will need to arrange for private court reporter services at their own expense, pursuant to Government Code §68086 and California Rules of Court, Rule 2.956. Requirements for requesting a court reporter are listed in the Policy for Official Reporter Pro Tempore available on the Sacramento Superior Court website at https://www.saccourt.ca.gov/court-reporters/docs/crtrp-6a.pdf. Parties may contact Court- Approved Official Reporters Pro Tempore by utilizing the list of Court Approved Official

34-2022-00324254-CU-OE-GDS: Jaime Farias vs. Labor Resource Group, Inc 10/24/2025 Hearing on Motion for Final Approval of Settlement in Department 22

Reporters Pro Tempore available at https://www.saccourt.ca.gov/court-reporters/docs/crtrp- 13.Pdf

If you are not using a reporter from the Court’s Approved Official Reporter Pro Tempore list, a Stipulation and Appointment of Official Reporter Pro Tempore (CV/E-206) must be signed by each party, the private court reporter, and the Judge. The signed form must be filed with the clerk prior to the hearing.

If a litigant has been granted a fee waiver and requests a court reporter, the party must submit a Request for Court Reporter by a Party with a Fee Waiver (CV/E-211). The form must be filed with the clerk at least 10 days prior to the hearing or at the time the hearing is scheduled if less than 10 days away. Once approved, the clerk will forward the form to the Court Reporter’s Office and an official reporter will be provided.

Background

On July 26, 2022, Plaintiff filed a putative wage-and-hour class action complaint against Defendants Labor Resource Group, Inc. and CEMCO, Inc. (“Defendants”) for: (1) failure to pay minimum and straight time wages (Labor Code §§ 204, 1194, 1194.2, and 1197); (2) failure to pay overtime wages (Labor Code §§ 1194, and 1198); (3) failure to provide meal periods (Labor Code §§ 226.7 and 512); (4) failure to authorize and permit rest periods (Labor Code §§ 226.7 and 512); (5) failure to timely pay final wages at termination (Labor Code §§ 201-203); (6) failure to provide accurate itemized wage statements (Labor Code § 226); (7) failure to indemnify employees for expenditures (Labor Code § 2802); and (8) unfair business practices (Business and Professions Code 17200 et seq.). (Woods Decl., ¶ 4.) On September 29, 2022, Plaintiff filed a separate action against Defendants for civil penalties under PAGA. (Ibid.)

Plaintiff sent a notice to Defendants and the California Labor & Workforce Development Agency (“LWDA”) alleging similar wage and hour violations pursuant to the PAGA on July 26, 2022. (Woods Decl., ¶ 4.) On June 20, 2024, Plaintiff amended his LWDA notice for settlement purposes to include claims for the failure to pay vested vacation wages upon termination and the failure to pay sick leave. (Ibid.) Four days later, on June 24, 2024, Plaintiff filed a first amended complaint in the class action matter (“Class FAC”) adding causes of action for the failure to pay vested vacation wages upon termination and the failure to pay sick leave. (Ibid.)

On September 13, 2024, following the exhaustion of the 65-day statutory period in the PAGA action, the Parties submitted a stipulation, along with a redlined PAGA FAC and clean copy of the PAGA FAC for the Court’s review and approval. (Ibid.) The Court signed the Order granting Plaintiff leave to file the PAGA FAC on September 18, 2024. (9-18-24 Order.)

On September 13, 2024, following the exhaustion of the 65-day statutory period in the PAGA

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action, the Parties submitted a stipulation, along with a redlined PAGA FAC and clean copy of the PAGA FAC for the Court’s review and approval. (Woods Decl., ¶ 4.) On January 31, 2025, the Parties filed a Joint Stipulation for Leave to File Second Amended Class and Representative Action Complaint, which was granted on February 5, 2025. (Ibid.) On February 5, 2025, Plaintiff filed a Second Amended Complaint, which added the claim against Defendants for civil penalties under the PAGA and removed any claim against Defendants for failure to pay vested vacation wages upon termination. (Ibid.)

On May 23, 2025, the Court granted Plaintiff’s motion for preliminary approval. (5-23-25 Minute Order.) Plaintiff now moves for final approval of the Parties’ Class Action and PAGA Settlement Agreement and Class Notice (“Settlement Agreement” or “Agreement”). (Woods Decl., ¶ 7, Exh. 1 (“SA”).) In advance of preliminary approval, Plaintiff provided a copy of the Agreement to the LWDA. (Id., ¶ 11, Exh. 2.)

Legal Standard

Courts review class action settlements in a three-stage process: (1) an earlier conditional review by the court; (2) a period during which notice is distributed to class members for their comments or objections; and (3) a later detailed review after the notice period when the court decides whether to give “final approval.” (Rubenstein, Newberg and Rubinstein on Class Actions (6th Ed. 2025) § 13:1 (Newberg); see also Cal. R. Ct. Rule 3.769.) This procedure, which is commonly utilized by both federal and state courts, assures class members of the protection of procedural due process safeguards and enables a court to fulfill its role as the guardian of the interest of the settlement class.

As required by the applicable Rule of Court, the Court must conduct a final approval hearing to inquire into the fairness of the proposed settlement. (Cal. R. Ct., Rule 3.769(g).) The Court has broad discretion to determine whether a proposed settlement in a class action is fair. (Mallick v. Superior Court (1979) 89 Cal.App.3d 434, 438.) The law favors settlement, particularly in class actions and other complex cases where substantial resources can be conserved by avoiding the time, cost, and rigors of formal litigation. (See Newberg, supra, § 13:44 (and cases cited therein); Class Plaintiffs v.

City of Seattle (9th Cir. 1992) 955 F.2d 1268, 1276; Van Bronkhorst v. Safeco Corp. (9th Cir. 1976) 529 F.2d 943, 950.) In approving a class action settlement, the Court must “satisfy itself that the class settlement is within the ‘ballpark’ of reasonableness.” (Kullar v. Foot Locker Retail, Inc. (2008) 168 Cal.App.4th 116, 133.) In making its fairness determination, the Court should consider the relevant factors, such as the strength of the plaintiffs’ case, the risk, expenses, complexity and likely duration of further litigation, the risk of maintaining class action status through trial, the amount offered in settlement, the extent of discovery completed and the stage of the proceedings, the experience and views of counsel, and the reaction of the class members to the proposed settlement. (Dunk v.

Ford Motor Co. (1996) 48 Cal.App.4th 1794, 1801.) “The most important factor is the strength of the case for plaintiffs on the merits, balanced against the amount offered in settlement.” (Kullar, supra, 168 Cal.App.4th at p. 130 [internal

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quotes omitted].) A presumption of fairness exists where (1) the settlement is reached through arm’s-length bargaining; (2) investigation and discovery are sufficient to allow counsel and the court to act intelligently; (3) counsel is experienced in similar litigation; and (4) the percentage of objectors is small. (Dunk, supra, 48 Cal.App.4th at p. 1802.) Ultimately, the court's determination is simply “an amalgam of delicate balancing, gross approximations and rough justice.” (Id., at p. 1801.)

Settlement Agreement and Class Response

Under the terms of the Agreement, Defendants deny liability, but agree to pay a Gross Settlement Amount (“GSA”) of $850,000 to resolve Plaintiff’s claims. (SA, ¶¶ 1.21, 3.1.) Plaintiff represents the following class: “all current and former hourly-paid, non-exempt employees of Defendants who were employed by Defendants within the State of California during the Class Period.” (Id., ¶ 1.5.) The Class Period means the period from July 26, 2018 to October 31, 2023. (Id., ¶ 1.11.) Defendants will separately pay any and all employer payroll taxes owed on the wage portions of the Individual Class Payments. (Id., ¶ 3.1.)

Participating Class Members and Aggrieved Employees will receive their share of the settlement without asking or requiring them to submit any claim and none of the GSA will revert to Defendants. (Ibid.) Defendants shall fully fund the GSA in six equal quarterly payments made to the Settlement Administrator. (Id., ¶ 4.3.) The first quarterly payment will be due on February 29, 2024, with each additional payment due at the end of every third month thereafter. (Ibid.) Concurrent with the final payment, Defendants will also pay the amount necessary to pay Defendants’ share of employer payroll taxes. (Ibid.)

The following amounts will be paid from the GSA:  A Class Representative Service Payment to Plaintiff of not more than $10,000 (SA, ¶ 3.2.1);  A Class Counsel Fees Payment of not more than 33 1/3% (estimated to be $283,333.33) and a Class Counsel Litigation Expenses Payment of not more than $25,000 (id., ¶ 3.2.2);  An Administrator Expenses Payment not to exceed $15,000 (id., ¶ 3.2.3);  A PAGA Penalties payment of $30,000, with 75% allocated to the LWDA ($22,500) and 25% allocated to the Aggrieved Employees ($7,500) (id., ¶ 3.2.5).

The remaining amount – the Net Settlement Amount (“NSA”) – shall be distributed to the Participating Class Members as Individual Class Payments, calculated on a pro-rata basis. (SA, ¶¶ 1.22, 1.27, 3.2.4.) For tax purposes, 20% of each Individual Class Payment will be allocated to the settlement of wage claims and 80% allocated to the settlement of claims for interest and penalties. (Id., ¶ 3.2.4.1.) Similarly, the Aggrieved Employees’ portion of the PAGA Penalties shall be distributed on a pro-rata basis. (Id., ¶¶ 1.23, 3.2.5.1.) Aggrieved Employees assume full responsibility and liability for any taxes owed on their Individual PAGA Payments. (Id., ¶ 3.2.5.1.) Each Settlement Class Member is eligible to receive an estimated average net benefit of approximately $827.66. (Horton Decl., ¶ 29.)

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Individual Class and PAGA Payment checks will remain valid for at least 180 days after the date of mailing. (SA, ¶ 4.4.1.) The Administrator will cancel all checks not cashed by the void date and the funds associated with any such checks will be transmitted to Legal Aid at Work, as a cy pres recipient. (Id., ¶¶ 4.4.1, 4.4.3.) Plaintiff’s Counsel attest that they have no interest in the proposed cy pres recipient. (Horton Decl., ¶ 16.) Plaintiff’s declaration does not include a similar attestation; however, the Court is aware that Plaintiff has previously done so. (9-18-24 Farias Decl., ¶ 18.)

Effective on the date when Defendants fully fund the GSA and fund all employer payroll taxes owed on the wage portion of the Individual Class Payments, Plaintiff, Class Members, Aggrieved Employees, and Class Counsel will release claims against all Released Parties as follows: - Plaintiff is subject to a general release. (SA, ¶¶ 5, 5.1, 5.1.1.) - “All Participating Class Members [] release Released Parties from all claims that were or could have reasonably been raised in the Action based upon the facts alleged in the Operative Complaint, including claims under Labor Code section 201, 202,203,204,216,218.5, 222,223,226,226.3, 226.7, 245-248.5, 510,512,558, 1174, 1174.5, 1194, 1194.2, 1197, 1197.1, 1198, 2802, California Industrial Welfare Commission Wage Orders, Cal.

Code Regs., tit. 8, sections 3395 and 11000, et seq., California Business and Professions Code section 17200, et seq, and all class claims, sick pay claims, meal or rest and recovery period claims, meal or rest and recovery period premium claims, unpaid regular, overtime, and/or minimum wage claims, including but not limited to claims for failing to properly calculate the regular rate of pay for purposes of paying overtime and/or sick pay, meal and rest period premium payments, failing to pay all minimum and overtime wages for hours worked, failure to pay all wages owed upon separation of employment, failure to indemnify employees for all necessary expenditures, failure to provide accurate itemized wage statements and complete payments of wages at separation or termination, failure to provide accurate and itemized wage statements, unfair competition based on the foregoing, unlawful business practices based on the foregoing, fraudulent business practices based on the foregoing, waiting time penalties, interest, fees, costs, and any other claims that could have reasonably been raised based upon the facts alleged in the Operative Complaint (collectively, the ‘Released Claims’).

The Release Period for the claims set forth in this paragraph shall be the Class Period.” (Id., ¶¶ 5, 5.2.) - “All Aggrieved Employees are deemed to release[] the Released Parties from all claims for PAGA penalties that were alleged, or reasonably could have been alleged, based on the facts stated in the Operative Complaint and the PAGA Notice. Aggrieved Employees' release applies only to those claims arising during the PAGA Period.” (Id., ¶¶ 5, 5.3.)

Veronica Olivares, a Case Manager for CPT Group, Inc. (“CPT”) attests that the Court-approved

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34-2022-00324254-CU-OE-GDS: Jaime Farias vs. Labor Resource Group, Inc 10/24/2025 Hearing on Motion for Final Approval of Settlement in Department 22

Notice was mailed, in English and Spanish, to all 612 individuals[1] identified in the class data via U.S. First Class Mail on June 27, 2025, after conducting a National Change of Address database search. (Olivares Decl., ¶¶ 4-7.) A total of 68 Notices were returned as undeliverable. (Id., ¶ 8.) One Notice was returned with a forwarding address. (Ibid.) For the remaining 67 Notices, CPT performed a skip trace to locate a better address. (Ibid.) As a result, CPT re-mailed a total of 45 Notices. (Id., ¶ 9.)

A total of 23 Notices have been deemed undeliverable. (Ibid.) CPT has not received any requests for exclusion, written disputes, or objections to the settlement. (Id., ¶¶ 10-12.) Accordingly, CPT reports a total of 612 participating Class Members, representing 100% of the Class. (Id., ¶ 13.) The average Individual Settlement Payment is approximately $800.11 and the highest Individual Settlement Payment is approximately $7,011.34. (Id., ¶ 14.)

Counsel attests to their extensive experience in similar cases. (Woods Decl., ¶¶ 27-35, 38-43.) Having provided sufficient information regarding damage analysis at preliminary approval, the Court is inclined to find, subject to the final fairness hearing, that the Settlement is within the ballpark of reasonableness and is entitled to a presumption of fairness, and all relevant factors presently support final approval.

PAGA Payment

The Agreement provides for a PAGA penalties payment in the amount of $30,000 to be paid from the GSA, with 75% ($22,500) allocated to the LWDA and 25% ($7,500.00) allocated to the Aggrieved Employees as their Individual PAGA Payments. (SA, ¶ 3.2.5.) The Aggrieved Employees are all persons employed by Defendants in California and classified as an hourly-paid or non-exempt employee who worked for Defendants during the PAGA Period. (Id., ¶ 1.4.) The PAGA Period means the period from September 29, 2021 to October 31, 2023. (Id., ¶ 1.30.) As discussed above, the Aggrieved Employees’ portion will be allocated on a pro rata basis and the Aggrieved Employees are subject to a separate release. (Id., ¶¶ 3.2.5.1, 5.3.) The Agreement makes clear that Aggrieved Employees cannot opt out of the PAGA portion of the settlement. (Id., ¶ 7.5.4.)

CPT reports 209 Aggrieved Employees. (Olivares Decl., ¶ 15.) The average Individual PAGA Payment is approximately $35.89 and the highest is approximately $149.09. (Ibid.) Having previously found Counsel’s valuation well-reasoned and persuasive at the preliminary approval stage, the PAGA Penalty is tentatively approved.

Class Counsel Fees and Costs

Courts generally recognize two methods for calculating fees in civil class actions: the lodestar/multiplier method and the percentage-of-recovery method. (Wershba v. Apple Computer, Inc. (2001) 91 Cal.App.4th 224, 254.) “The percentage method calculates the fee as a percentage share of a recovered common fund or the monetary value of plaintiffs’ recovery. The

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lodestar method, or more accurately the lodestar-multiplier method, calculates the fee ‘by multiplying the number of hours reasonably expended by counsel by a reasonable hourly rate.’” (Laffitte v. Robert Half Internat. Inc. (2016) 1 Cal.5th 480, 489.) In determining fees and costs to be awarded to Class Counsel, the Court must exercise its judicial function and make a decision on the propriety of the fees requested; it should not, and does not, abdicate its charge to make a decision simply because the parties may have reached their own agreement in this regard.

The choice of a fee calculation method is generally one within the discretion of the trial court, the goal “being the award of a reasonable fee to compensate counsel for their efforts.” (Id. at p. 504.) “‘The lodestar method better accounts for the amount of work done, while the percentage of the fund method more accurately reflects the results achieved.’ Each has been championed and criticized for its respective advantages and disadvantages.” (Ibid., quoting Rawlings v. Prudential-Bache Properties, Inc. (6th Cir. 1993) 9 F.3d 513, 516.)

The Agreement provides for a Class Counsel Fees Payment of not more than 33 1/3% (estimated to be $283,333.33) and a Class Counsel Litigation Expenses Payment of not more than $25,000. (SA, ¶ 3.2.2.) Plaintiff argues that the requested fee award is reasonable as a percentage of the common fund, consistent with the average fee award in class actions, and supported by a lodestar cross-check. (Mot., pp. 12:16-18:5.)

The lodestar is broken down as follows:

Attorney Experience Rate Time Total Alan Wilcox 13 years $900 14 $12,600 Tyler J. Woods 21 years $1,200 10.9 $13,080 Peter Horton (former) 22 years $1,000 11 $11,000 Justin F. Marquez (former) 16 years[2] $1,500 45 $67,500 Bradford Smith (former) 3 years $575 16 $9,200 Arsiné Grigoryan (former) 8 years $800 100 $80,000

Total: 196.9 $193,380

(Woods Decl., ¶¶ 18, 30, 39-43.) Counsel generally describes the work performed by the firm and also provides billing records for the specific tasks performed on this case by Mr. Wilcox and Mr. Woods. (Id., ¶ 19, 26, Exh. 3.) Counsel explains that the “hours they worked on this matter have been conservatively estimated based on how much would have been spent on those [tasks] in the past and their billing rates.” (Id., ¶ 40, fn 1.)

Counsel argues that his rate “is consistent with my actual billing rate for my practice area, experience, legal market, and accepted hourly rate” and the reasonableness of the claimed rates above are supported by several surveys of legal rates including the 2022 Real Rate Report and an article regarding “Big Law” rates. (Woods Decl., ¶¶ 36-38, Exhs. 5-6.) The Court notes that Counsel draws the Court’s attention to the hourly rates for Los Angeles, the Bay Area, and New

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York. (Id., Exh. 5 [highlights].) The Court disagrees. A reasonable hourly rate “is the product of a multiplicity of factors,” including the general market rate. (See Margolin v. Regional Planning Com. (1982) 134 Cal.App.3d 999, 1003-1004.) “The determination of the ‘market rate’ is generally based on the rates prevalent in the community where the court is located.” (Syers Properties III, Inc. v. Rankin (2014) 226 Cal.App.4th 691, 701; see also PLCM Group, Inc. v. Drexler (2000) 22 Cal.4th 1084, 1094.) As Counsel surely knows, the prevailing market rates in Los Angeles, the Bay Area, and New York are not the prevailing rates in the Sacramento region. The Court generally rejects the notion that hourly rates of more than $1,000 are reasonable or appropriate in the Sacramento region.

Nonetheless, the Court is persuaded that the requested award of one-third of the common fund is reasonable and appropriate under the circumstances. Even if the Court reduced Counsel’s hourly rates to better reflect the prevailing rates in this region (to, for example, $850 for attorneys with approximately 20 years’ experience, $750 for attorneys with 16 years’ experience, $700 for attorneys with 13 years’ experience, $650 for attorneys with 8 years’ experience, and $400 for attorneys with 3 years’ experience), the lodestar would require a multiplier of 2.12. Accordingly, the requested fee award is approved.

Counsel attests to incurring a total of $19,238.88 in litigation costs. (Woods Decl., ¶ 26, Exh. 4.) The Court finds these costs reasonable and appropriate.

Settlement Administrator

CPT attests that its total fees and costs for services in connection with the administration of this settlement are $12,000.[3] (Olivares Decl., ¶ 17.) The Court finds these costs reasonable and appropriate.

Class Representative Service Payment

The Agreement provides for a Class Representative Service Payment to Plaintiff of not more than $10,000. (SA, ¶ 3.2.1.) Plaintiff describes his efforts and estimates that he spent approximately 45 hours prosecuting this case. (Farias Decl. ISO Prelim. App., ¶¶6-9.)

The Court finds these payments justified based on Plaintiff’s declarations and in the absence of any objections to the awards.

Disposition

In sum, and subject to the final fairness hearing, the Court tentatively concludes that the settlement is entitled to final approval. Provided that no objection is asserted by any Class Member at the hearing on this matter, the Court will sign the Proposed Order submitted with Plaintiff’s moving papers, correcting CPT’s administration costs at paragraph 16.

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Any further Case Management Conferences and compliance hearings shall be handled by this Department. This Department shall monitor compliance with the settlement approval through and including the disbursement of any uncashed amount to the cy pres beneficiary.

The Court sets a Compliance Hearing for June 12, 2026 at 10:30 a.m. At least 15 calendar days prior to the Compliance Hearing, Counsel shall file a declaration regarding the status of the distribution of the settlement funds. If the Court is satisfied that the settlement funds have been fully distributed, no appearance will be required.

[1] Plaintiff’s motion indicates that there are 588 Class Members. (Mot., p. 1:6.) The Court

assumes this is a holdover from Counsel’s estimate at preliminary approval. The Court assumes the figure provided by Ms. Olivares is accurate. [2] Counsel failed to provide Mr. Marquez’s bar admission year. The Court, on its own motion,

takes judicial notice of the fact of Mr. Marquez’s admission in 2009 from his State Bar attorney profile. Counsel is admonished for failing to provide complete information. [3] Plaintiff’s motion indicates that CPT will incur a total of $15,000 in costs associated with

administration. (Mot., p. 20:10-11.) The Court assumes this is a typographical error and will rely on Ms. Olivares’ declaration.

Counsel for Plaintiff is directed to notice all parties of this order.

Please note that the Complex Civil Case Department now provides information to assist you in managing your complex case on the Court website at https://www.saccourt.ca.gov/civil/complex-civil-cases.aspx. The Court strongly encourages parties to review this website regularly to stay abreast of the most recent complex civil case procedures. Please refer to the website before directly contacting the Court Clerk for information.