Randy Goad vs SRG Operating Inc et al

On March 28, 2025, the court held a status conference during which the parties reported that they were finalizing a settlement agreement.

On May 12, 2025, plaintiff filed an unopposed motion for approval of a proposed settlement under PAGA.

On September 12, 2025, the court denied plaintiff's motion for approval of PAGA settlement without prejudice, noting the allocations, attorney fees, incentive award, and other items were not adequately supported.

On November 18, 2025, plaintiff filed a renewed motion for approval of PAGA settlement. This renewed motion is unopposed.

Analysis: (1) PAGA A PAGA action is a type of qui tam action, in which a private party is authorized to bring an action to recover a penalty on behalf of the government and receive part of the recovery as compensation. (Huff v. Securitas Sec. Servs. USA, Inc. (2018) 23 Cal.App.5th 745, 753.)

"In bringing such an action, the aggrieved employee acts as the proxy or agent of state labor law enforcement agencies, representing the same legal right and interest as those agencies, in a proceeding that is designed to protect the public, not to benefit private parties." (Amalgamated Transit Union, Local 1756, AFL-CIO v. Superior Court (2009) 46 Cal.4th 993, 1003.)

The dispute is between the employer and the state. (Kim v. Reins International California, Inc. (2020) 9 Cal.5th 73, 81 (Kim).)

"Of the civil penalties recovered, 75 percent goes to the Labor and Workforce Development Agency [LWDA], leaving the remaining 25 percent for the 'aggrieved employees.' " (Ibid.)

Although this allocation has been changed by amendment, the 75/25 split still applies to this action since the PAGA notice was submitted on December 1, 2023. (Ardestani Decl., P. 2, Ex. 2; see Lab. Code, Sec. 2699, subd. (v).)

PAGA "empowers employees to sue on behalf of themselves and other aggrieved employees to recover civil penalties previously recoverable only by the Labor Commissioner.... [Citations] The PAGA also creates new civil penalties, equally enforceable by aggrieved employees, for most other Labor Code violations that previously did not carry such penalties. [Citation.] [P.] All PAGA claims are 'representative' actions in the sense that they are brought on the state's behalf. The employee acts as 'the proxy or agent of the state's labor law enforcement agencies' and 'represents the same legal right and interest as' those agencies -- 'namely, recovery of civil penalties that otherwise would have been assessed and collected by the [LWDA].' [Citations.]

The employee may therefore seek any civil penalties the state can, including penalties for violations involving employees other than the PAGA litigant herself." (ZB, N.A. v. Superior Court (2019) 8 Cal.5th 175, 184-185); Lab. Code, Sec. 2699, subd. (a).)

"A PAGA claim is legally and conceptually different from an employee's own suit for damages and statutory penalties. ... Every PAGA claim is 'a dispute between an employer and the state.' [Citations.] Moreover, the civil penalties a PAGA plaintiff may recover on the state's behalf are distinct from the statutory damages or penalties that may be available to employees suing for individual violations. [Citation.] Relief under PAGA is designed primarily to benefit the general public, not the party bringing the action." (Kim, supra, 9 Cal.5th at p. 81.)

"The superior court shall review and approve any settlement of any civil action filed pursuant to [PAGA]." (Lab. Code, Sec. 2699, subd. (s)(2).)

"Because many of the factors used to evaluate class action settlements bear on a settlement's fairness--including the strength of the plaintiff's case, the risk, the stage of the proceeding, the complexity and likely duration of further litigation, and the settlement amount--these factors can be useful in evaluating the fairness of a PAGA settlement. [P.] Given PAGA's purpose to protect the public interest, we also agree with the LWDA and federal district courts that have found it appropriate to review a PAGA settlement to ascertain whether a settlement is fair in view of PAGA's purposes and policies. [Citations.]

We therefore hold that a trial court should evaluate a PAGA settlement to determine whether it is fair, reasonable, and adequate in view of PAGA's purposes to remediate present labor law violations, deter future ones, and to maximize enforcement of state labor laws." (Moniz v. Adecco USA, Inc. (2021) 72 Cal.App.5th 56, 77, disapproved on another ground in Turrieta v. Lyft, Inc. (2024) 16 Cal.5th 664, 709-710 (Moniz).)

"Taken together, PAGA's statutory scheme and the principles of preclusion allow, or 'authorize,' a PAGA plaintiff to bind the state to a judgment through litigation that could extinguish PAGA claims that were not specifically listed in the PAGA notice where those claims involve the same primary right litigated. Because a PAGA plaintiff is authorized to settle a PAGA representative action with court approval [citation], it logically follows that he or she is authorized to bind the state to a settlement releasing claims commensurate with those that would be barred by res judicata in a subsequent suit had the settling suit been litigated to judgment by the state." (Moniz, supra, 72 Cal.App.5th at p. 83.)

"Releases must be appropriately tethered to the complaint's factual allegations.... Requiring a reasonable connection prevents the release from extending to claims that are only remotely related to the allegations in the complaint." (Amaro v. Anaheim Arena Management, LLC (2021) 69 Cal.App.5th 521, 538 (Amaro) [discussing scope of releases in context of a class action].)

(2) The Settlement Plaintiff submits a declaration attaching the proposed "PAGA Settlement Agreement" (the Agreement) between plaintiff and defendant SRG Operating, Inc. (SRG). (Ardestani Decl., P. 2, Ex. 1.)

The PAGA period is "from December 1, 2022 to April 15, 2025." (Id. at P. 1.21.) The aggrieved employees are "all current and former non-exempt employees employed by SRG in California at any time during the PAGA period." (Id. at P. 1.4.)

The Gross Settlement Amount (GSA) is $675,000, which will be used to pay the PAGA penalties and other payments. (Ardestani Decl., Ex. 1 at P. 1.11.) Plaintiff will receive an incentive payment of up to $1,000, subject to court approval. (Id. at P. 3.1.1.) Plaintiff's attorneys will receive attorney fees up to $225,000, subject to court approval. (Id. at P. 3.1.2.) Plaintiff's attorneys will receive reimbursement of litigation costs up to $18,201.99, subject to court approval. (Ibid.) The settlement administrator will receive up to $5,500 for administration costs, subject to court approval. (Id. at P. 3.1.3.)

The PAGA penalties are $425,298.01 with 75 percent ($318,973.51) paid to the LWDA and 25 percent ($106,324.50) paid to aggrieved employees based on their pro rata share. (Id. at P.P. 3.1.4, 3.1.4.1.)

However, if the court approves less than the maximum incentive payment, attorney fees, cost reimbursement, or administration costs, the remainder of those items is re-allocated to the PAGA penalties, thereby increasing the amount of payments to the LWDA and aggrieved employees as PAGA penalties. (Id. at P.P. 3.1 - 3.1.3.) There is no reversion to defendants. (Ibid.; see Ardestani Decl., P.P. 8-9.)

(3) The Release In exchange for these payments, "Aggrieved Employees are deemed to release, on behalf of themselves and their respective former and present representatives, agents, attorneys, heirs, administrators, successors, and assigns, the Released Parties from all claims for PAGA penalties that were alleged, or reasonably could have been alleged, based on the PAGA Period facts stated in the Operative Complaint and/or the PAGA Notice .... The express purpose of this Agreement and the Judgment to be entered by the Court following approval of this settlement is to forever bar Plaintiff, the LWDA, and any other individual or entity acting on behalf of or purporting to act on behalf of the LWDA (including all Aggrieved Employees) from asserting any of the PAGA Released Claims that occurred during the PAGA Period in any future litigation.

All Aggrieved Employees will be bound by the settlement of the PAGA claims that occurred during the PAGA Period being released herein, upon its approval by the Court, regardless of whether he or she negotiates (i.e. cashes or deposits) his or her settlement check." (Ardestani Decl., Ex. 1 at P. 5.2.)

Plaintiff, a signatory to the Settlement Agreement, executes a broader release and a waiver under Civil Code section 1542. (Id. at P. 5.1.)

" 'Released Parties' means: SRG and each of its former and present directors, officers, shareholders, owners, members, managing members, agents, attorneys, insurers, predecessors, successors, assigns, subsidiaries, affiliates including, but not limited to, Senior Resource Group, LLC, SRG Partners, LLC, and SRG Partners Community Investment Co, LLC." (Ardestani Decl., Ex. 1 at P. 1.29.)

(4) The Settlement Agreement Is Fair and Adequate The Settlement Agreement was based on plaintiff's independent investigation and estimates provided by SRG at mediation. (Ardestani Decl., P.P. 11-24)

SRG estimated that it employed approximately 1,912 non-exempt employees in California during the relevant time frame, and these individuals worked approximately 53,995 pay periods during that time. (Id. at P. 15.) Based on the data provided by SRG, plaintiff estimated defendants' maximum PAGA exposure at approximately $23,094,300, including approximately $5,399,500 on the unpaid wage claims, $1,382,300 on the meal period claims, $5,399,500 on the rest period claims, $5,399,500 on the wage statement claims, $5,399,500 on the expense reimbursement claims, and $114,000 in civil penalties for failing to timely pay wages on separation of employment. (Ibid.)

Plaintiff considered a number of anticipated defenses. (Ardestani Decl., P.P. 17-24.) SRG argued its time keeping and rounding policies are fully compliant with California law, and that it accurately tracked and paid for all hours worked by aggrieved employees. (Id. at P. 17.) SRG argued it maintained fully compliant written polices and, to the extent meal or rest breaks were missed or arguably non-compliant, such actions were in violation of company policy, aberrational, and not subject to common proof. (Id. at P.P. 18-19.) SRG emphasized its written policies prohibiting employees from using their own phones while on the clock and working. (Id. at P. 20.) SRG also argued that the court may not approve stacking multiple PAGA penalties pertaining to the same alleged conduct and that the court has discretion to award lesser penalties than the maximum amount. (Id. at P.P. 21-22.)

The court finds that the settlement appears fair, reasonable, and adequate in view of PAGA's purposes to remediate present labor law violations, deter future ones, and to maximize enforcement of state labor laws. (Ardestani Decl., P.P. 11-24; Moniz, supra, 72 Cal.App.5th at p. 77.)

The court has considered the gross settlement amount, estimated PAGA penalties, the potential liability of the claims at issue, the risks and costs associated with further litigation, the potential benefits to the LWDA and aggrieved employees, and the public policy favoring settlement.

The court further finds that release that binds absent aggrieved employees and the State is sufficiently tethered to the facts and transactions giving rise to the PAGA penalties at issue in the PAGA period. (See Ardestani Decl., Ex. 1 at P. 5.2; Moniz, supra, 72 Cal.App.5th at p. 83; Amaro, supra, 69 Cal.App.5th at p. 538.)

The court has also considered that the Settlement Agreement appears to have been reached through arm's length bargaining and is based on sufficient investigation with the assistance of experienced counsel. (See Dunk v. Ford Motor Co. (1996) 48 Cal.App.4th 1794, 1801-1802; see Ardestani Decl., P.P. 6-7, 11-39.)

The involvement of a mediator strongly weighs in favor of finding that the Settlement Agreement represents a non-collusive and arm's-length agreement. (See Kullar v. Foot Locker Retail, Inc. (2008) 168 Cal.App.4th 116, 128-129.) "The court undoubtedly should give considerable weight to the competency and integrity of counsel and the involvement of a neutral mediator in assuring itself that a settlement agreement represents an arm's length transaction entered without self-dealing or other potential misconduct." (Id. at p. 129.)

(5) Attorney Fees Are Approved in Part Under PAGA, "[a]ny employee who prevails in any action shall be entitled to an award of reasonable attorney's fees ...." (Lab. Code, Sec. 2699, subd. (k)(1).)

The court is not inclined to calculate attorney fees by applying a percentage to the gross settlement amount. The court is aware that this approach has been approved in the class action context with a lodestar cross-check. (See Laffitte v. Robert Half Internat. Inc. (2016) 1 Cal.5th 480, 503-506.) However, the court is not aware of any appellate case law that expressly permits this approach in the context of a PAGA-only settlement. Plaintiff does not cite the court to any such authority.

Absent statutory authority or appellate case law expressly permitting a percentage of the common fund to calculate attorney fees in a PAGA-only settlement, the court in its discretion is inclined to utilize the traditional lodestar method. (See Ketchum v. Moses (2001) 24 Cal.4th 1122, 1132.)

The court has reviewed the lodestar figures submitted by Plaintiff. (See Ardestani Decl., P.P. 40-45, Ex. 4.) The court finds that the lodestar amount requested by plaintiff without a multiplier is fair and reasonable. The court approves attorney Crosner's time of 25.9 hours at $800 per hour ($20,720), attorney Serb's time of 60.3 hours at $750 per hour ($45,225), attorney Ardestani's time of 86.1 at $700 per hour ($60,270), attorney Kiara's time of 5.7 hours at $650 per hour ($3,705), attorney Bramasco's time of 14.2 hour at $600 per hour ($8,520), and attorney Donnelly's time of 8.5 hours at $900 per hour ($7,650). (See Ardestani Decl., P.P. 27-45, Ex. 4.)

The court finds these rates are consistent with the rates in the community for similar work. The time spent on this matter appears reasonable. The total fee award is $146,090.

The court declines to award a multiplier. The court notes that plaintiff's counsel took this matter on a contingency. However, the court also notes that there was no formal discovery in the representative PAGA action, there was no deposition testimony submitted to the court, and there was no complex motion practice. The court in its discretion determines that the basic lodestar fee fairly compensates plaintiff's counsel for their work under these circumstances.

(6) Costs Are Approved in Part "Any employee who prevails in any action shall be entitled to an award of reasonable ... costs. (Lab. Code, Sec. 2699, subd. (k)(1).)

Plaintiff seeks recovery of documented litigation costs of $18,298.99, but the Settlement Agreement provides for recovery of costs of up to $18,201.99. (Ardestani Decl., P. 47, Ex. 1 at P. 1.19.)

The court finds that the out-of-pocket litigation costs for filing fees, attorney services, mediation fees, PAGA filing fees, and postage fees are reasonably necessary to the conduct of the litigation and otherwise recoverable. (See Code Civ. Proc., Sec. 1033.5; Ardestani Decl., P. 47.)

However, expert fees are generally not recoverable as costs unless expressly permitted by statute or ordered by the court. (Code Civ. Proc., Sec. 1033.5, subd. (b)(1).) In addition, plaintiff failed to carry his burden as a factual matter for the $9,555 in expert fees. (Ibid., Ardestani Decl., P. 47.)

The court further finds that settlement administration costs of $5,500 are reasonable and necessary for the implementation of the settlement and otherwise recoverable. (Code Civ. Proc., Sec. 1033.5, subd. (c); Islas Decl., P.P. 3-10, Ex. C.)

Thus, the court will approve out-of-pocket litigation costs in the total amount of $8,743.99 ($18,298.99 less $9,555 in expert fees) and settlement administration costs in the amount of $5,500.

(7) The Incentive Award Is Not Approved The Settlement Agreement provides for an incentive payment to plaintiff in the amount of $1,000, subject to court approval. However, civil penalties under PAGA may "not go disproportionately to the PAGA plaintiff ...." (Moniz, supra, 72 Cal.App.5th at p. 87.)

The proposed incentive award is not fairly described as a civil penalty, cost, or attorney fee. (See Lab. Code, Sec. 2699, subds. (a), (k)(1); Code Civ. Proc., Sec. 1033.5.) There is no provision in PAGA or appellate case law that expressly permits incentive awards in a PAGA-only settlement. Plaintiff failed to carry his burden as to the incentive award.

Absent statutory authority or appellate case law expressly permitting an incentive award in a PAGA-only settlement, the court declines to approve the incentive award. (Moniz, supra, 72 Cal.App.5th at p. 87.)

(8) Notice to the LWDA and Aggrieved Employees Is Adequate The proposed settlement shall be submitted to the [LWDA] at the same time that it is submitted to the court." (Lab. Code, Sec. 2699, subd. (s)(2).)

Plaintiff submits evidence that a copy of the Agreement was submitted to the LWDA. (Ardestani Decl., P. 2, Ex. 3.) Plaintiff submits evidence that the PAGA notice of this lawsuit containing the facts and theories asserted in the FAC was provided to the LWDA on December 1, 2023. (Ardestani Decl., Ex. 2.)

Exhibit A to the Agreement is a proposed notice to be sent to aggrieved employees enclosing their PAGA payent. (Ardestani Decl., Ex. 1.) The proposed notice and distribution methods appear reasonable and adequate for purposes of a PAGA-only settlement. (Id. at P.P. 4.1 - 4.3.5, Ex. A; Islas Decl., P.P. 3-10.) The court finds that plaintiff has complied with the necessary notice requirements.

(9) Conclusion The court approves the GSA of $675,000. The court approves attorney fees of $146,090, litigation costs of $8,743.99, and administration costs of $5,500. The court declines to approve an incentive award for plaintiff.

Pursuant to the Agreement, the total amount to be paid by the administrator as PAGA penalties is increased to $514,666.01, 25 percent of which shall be paid to aggrieved employees ($128,666.50) and 75 percent of which shall be paid to the LWDA ($385,999.51). (See Ardestani Decl., P.P. 3.1 - 3.1.3.) There is no reversion to defendants. (Ibid.)

Plaintiff shall submit a revised proposed order consistent with this ruling.

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