Hernandez vs. Resource Employment Solutions, LLC

110 Hernandez vs. Motion for Preliminary Approval of Class/PAGA Settlement Resource Employment The Court has reviewed the supplemental materials provided by Solutions, LLC Class Counsel and finds that they adequately address the previously identified issues. Accordingly, Plaintiffs Raymundo 2019- Hernandez and Adela Hernandez’s Motion for Preliminary 01084740 Approval of Class Action and PAGA Settlement is CONDITIONALLY GRANTED, pending submission of a fully executed Second Amended Joint Stipulation and Settlement Agreement and a further revised proposed order.

This is a putative wage-and-hour class action and PAGA matter.

On 7/19/2019, Plaintiff Raymundo Hernandez, individually and on behalf of other persons similarly situated, filed a class action complaint against Defendants Resource Employment Solutions, LLC (“RES”) and Houdini, Inc. (ROA #2.) The complaint alleged 5 causes of action for:

1. Failure to Pay Wages; 2. Failure to Provide Meal Periods; 3. Failure to Timely Pay Wages at Termination/Separation; 4. Failure to Provide Accurate Wage Statements; and 5. Violation of Unfair Business Practices Act – Bus. & Prof. Code §§ 17200, et seq

On 9/23/2019, Plaintiff filed the first amended complaint (FAC) adding a cause of action for PAGA penalties. (ROA #13.)

Defendant Houdini moved to compel arbitration. (ROA #37.) On 10/12/2021, after several pandemic-related continuances, the Court denied the motion. (ROA #142.)

On 4/14/2022, Plaintiff filed the operative second amended complaint (SAC) adding Defendant Resource Employment Solutions II California, LLC (“RES II CA”) to the action and a cause of action for failure to provide paid rest periods. (ROA #177.)

On 3/13/2023, the Court took notice that two other matters are related to this action: (1) Villagomez v. Houdini, Inc., Case No. 2020-01140694; and (2) Adela Hernandez v. Houdini, Inc., Case No. 2021-01212206. (ROA #198.) The Villagomez case settled separately, and on 8/29/2023, the Court entered an order dismissing that case without prejudice. (ROA #284 in 2020- 01140694.)

The Adela Hernandez v. Houdini case commenced the action against Houdini and Resource Employment Solutions II California,

LLC on 7/23/2021. (ROA #2 in 2021-01212206.) Pursuant to the parties’ stipulation and the Court’s order on 2/28/2022, Plaintiff Adela Hernandez’s individual Labor Code claims were submitted to binding arbitration (JAMS Arbitration Ref. No. 5200000946); the class allegations were dismissed without prejudice; the operative FAC is deemed filed and served to add PAGA claims, and Plaintiff Adela Hernandez may proceed with the PAGA representative action in state court concurrently with arbitrating her individual Labor Code claims. (ROA #45 in 2021- 01212206.) The operative FAC, filed on 4/1/2022, alleges the following 8 causes of action:

1. FAILURE TO PAY OVERTIME WAGES; 2. FAILURE TO PAY MINIMUM WAGES; 3. FAILURE TO PROVIDE MEAL PERIODS; 4. FAILURE TO PROVIDE REST PERIODS; 5. FAILURE TO PAY ALL WAGES UPON TERMINATION; 6. FAILURE TO PROVIDE ACCURATE WAGE STATEMENTS; 7. UNFAIR COMPETITION; and 8. CIVIL PENALTIES LABOR CODE § 2699(a).

Defendant RES II CA is a staffing agency based in Florida with a focus on placement in the light industrial, warehouse, and manufacturing industries. Defendant RES II CA acquired RES’s paper assets on 7/20/2020, after RES defaulted on a loan, and a lender foreclosed on the note. RES II CA had and has no relationship with RES, and RES II CA denied any potential liability for RES due to the acquisition through foreclosure. One of RES’s (and later RES II CA’s) clients was Houdini, to which Plaintiffs and Settlement Class Members and members of PAGA Settlement Groups were assigned.

Houdini is a purveyor of food and wine gift baskets based in Buena Park, where Plaintiffs were employed. In addition to sourcing employees from RES, and later RES II CA, Houdini also directly employed other non-exempt employees. Settlement Class Members and members of PAGA Settlement Groups were predominantly employed seasonally around the end of year holiday season. (See ROA #291 [Mot. for Prelim. Approval] at p. 2.)

On 12/12/2022, the parties attended mediation but were unable to settle the case. The parties thereafter resumed litigation while continuing settlement negotiations. Subsequently, as information relating to RES’s insolvency and RES II CA’s denial of any successor liability came to light, the parties agreed to the subject settlement, which was finally executed in February/March 2025. (See ROA #292 [Counsel Decl.], ¶ 14.)

On 7/9/2025, Plaintiffs filed the instant motion for preliminary approval of the class action and PAGA settlement, and submitted

the Joint Stipulation and Settlement Agreement and Class Notice for the Court’s review. The Motion seeks preliminary approval of the parties’ proposed settlement for the non-reversionary gross settlement amount (GSA) of $750,000.

At the first hearing on the motion on 11/20/2025, the Court continued the matter so that the parties could address various issues identified by the Court. (ROA #307.) Class Counsel then submitted a redline of an Amended Joint Stipulation and Settlement Agreement and a redline of an amended Class Notice for the Court’s review.

At the second hearing on the motion on 2/19/2026, the Court further continued the matter so that the parties could address various issues identified by the Court. (ROA #317.) Class Counsel then submitted a redline of a Second Amended Joint Stipulation and Settlement Agreement (“2nd Amended Settlement Agreement”), a further amended Class Notice, and an amended transmittal letter to the Houdini PAGA Settlement Group Members for the Court’s review.

Based on a review of all papers submitted, including the 2nd Amended Settlement Agreement, the Court finds the settlement falls within the range of what is considered fair and reasonable, subject to a final determination at the Final Approval hearing.

However, within five (5) court days, Class Counsel must (1) submit a fully executed copy of the 2nd Amended Settlement Agreement and (2) separately lodge a further amended Proposed Order that includes the ROA number of counsel’s to-be-filed 4th supplemental declaration attaching the fully executed 2nd Amended Settlement Agreement.

The Motion for Final Approval will be heard on October 29, 2026 at 2:00 p.m. in Department CX102. All papers for the Motion for Final Approval must be filed and served no later than sixteen (16) court days before the hearing date. If Class Counsel cannot meet this deadline, then they must request a continuance of the hearing. Failure to do so may result in the issuance of an Order to Show Cause re Monetary Sanctions.

At the Final Approval hearing, evidence supporting the request for an award of attorneys’ fees should be presented in the form of time records or a summary of time spent on the substantive tasks, so as to enable the Court to evaluate the lodestar and costs claimed. Class Counsel should state by declaration whether time records were kept and created contemporaneously or otherwise. The Court also reminds Class Counsel that although a

determination regarding the amount of the attorneys’ fees award will not be made until final approval, the Court is unlikely to approve attorneys’ fees in excess of thirty percent (30%) of the GSA absent unique circumstances. As a result, Class Counsel should address whether any such unique circumstances exist.

Also at the Final Approval hearing, Class Counsel must also disclose whether counsel has any fee-splitting arrangement with any other counsel, or confirm none exists.

Additionally, at the Final Approval hearing, Plaintiffs and Class Counsel must provide detailed declarations describing circumstances to justify the requested enhancement awards and addressing the factors set forth in Golba v. Dick’s Sporting Goods, Inc. (2015) 238 Cal.App.4th 1251, 1272, and Clark v. American Residential Services, LLC (2009) 175 Cal.App.4th 785, 804. Each Plaintiff must provide an estimate of the hours spent participating in this litigation.

Plaintiffs to give notice of this Court’s ruling, including to the LWDA, within five (5) court days, and file proof of service. 111 Hernandez vs. Status Conference Houdini, Inc.

2021- CONTINUED TO 10/29/26 AT 2PM WITH #112; 01212206 CMC statement to be filed 10 days in advance. Parties are to address effect of settlement re related RES CASE.

112 Gonzalez vs. Motion for Preliminary Approval of Class/PAGA Settlement Flood Management The Court has reviewed the supplemental materials provided by Services, Inc. Class Counsel and finds that they fail to adequately address all the previously identified issues. Accordingly, Plaintiff Michael P. 2024- Gonzalez’s Motion for Preliminary Approval of Class Action and 01403048 PAGA Settlement is further CONTINUED to July 30 at 2:00 p.m. in Department CX102 in order to give Class Counsel an opportunity to address the issues identified below.

This is a putative wage-and-hour class action and PAGA matter.

On 5/31/2024, Plaintiff Michael P. Gonzalez, individually and on behalf of all others similarly situated, filed a class action