NOTICE LODGING AND DECL. OF BETH A. ROSS CASE NO. ED CV 13-01758 ODW(DTBx)
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Beth Ross, SBN 141337 Jennifer Keating, SBN 250857 Amy Endo, SBN 272998 LEONARD CARDER, LLP 1330 Broadway, Suite 1450 Oakland, CA 94612 Telephone: (510) 272-0169 Facsimile: (510) 272-0174 [email protected] [email protected] [email protected]
Attorneys for Plaintiffs
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CESAR ARDÓN, ALFREDO ARECHIGA, LUÍS CHAVEZ, JOSE LUÍS MENDEZ, JOSE ANTONIO OCHOA, HERIBERTO REYES, SERGIO SALAZAR, Plaintiffs, v. 3PD, Inc., Defendant.
CASE NO. ED CV 13-01758 ODW (DTBx)
NOTICE OF LODGING OF PROPOSED NOTICE OF PAGA SETTLEMENT AND PAGA SETTLEMENT AGREEMENT IN FURTHER SUPPORT OF JOINT MOTION FOR APPROVAL OF PAGA SETTLEMENT; DECLARATION OF BETH A ROSS IN SUPPORT THEREOF
Judicial Officer: Hon. David T. Bristow
Hearing Date: April 9, 2015 Time: 10:00 a.m. Place: Riverside Branch
Case 5:13-cv-01758-DTB Document 103 Filed 04/20/15 Page 1 of 19 Page ID #:1508
- 1 - NOTICE OF LODGING AND DECL. OF BETH A ROSS CASE NO. ED CV 13-01758 ODW(DTBx)
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TO THE COURT AND ALL PARTIES:
LODGED herewith as Exhibit A is a true and correct copy of the revised Notice to the non-
party PAGA Contract Carriers describing the terms of the PAGA Settlement and the effect of the
same on their legal rights.
LODGED herewith as Exhibit B is a true and correct copy of the revised PAGA Settlement
Agreement.
Dated: April 20, 2015 Respectfully submitted,
LEONARD CARDER, LLP
/s/ Beth A. Ross Beth A. Ross Attorneys for Plaintiff
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- 2 - NOTICE OF LODGING AND DECL, OF BETH A ROSS CASE NO. ED CV 13-01758 ODW(DTBx)
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DECLARATION OF BETH A. ROSS
I, Beth A. Ross, hereby declare as follows:
1. I am an attorney licensed to practice law in the State of California. I am a partner in
law firm Leonard Carder LLP located at 1330 Broadway Suite 1450 Oakland, CA 94619. I am
counsel for the Plaintiffs in the above captioned matter. I have personal knowledge of the facts set
forth in this declaration and I could and would testify competently about them if called as a witness
in this matter.
2. Following the April 9, 2015 approval hearing, the parties –by and through their
counsel – met and conferred regarding revisions to the proposed notice to the non-party PAGA
drivers of the settlement terms and claim process as well as the language of the limited release.
3. Section 2 to the revised notice now reads as follows:
2. What are the Terms of the PAGA Settlement? The PAGA settlement provides for the creation of $1,000,000.00 (one million
dollar) common fund (referred to here as the “PAGA Settlement Fund”) for the benefit of the California Labor and Workforce Development Agency and the non-party PAGA Contract Carriers. $940,000.00 of the PAGA Settlement Fund will be paid to Plaintiffs and the non-party PAGA Contract Carriers to settle the claim to collect civil penalties based on 3PD’s alleged failure to pay them overtime pay and minimum wages for their work. $60,000.00 will be paid to the State of California and the non-party PAGA Contract Carriers to settle the claim to collect fixed monetary penalties for other alleged violations of the California labor code.
The Court has also approved payment of an additional sum of $500,000.00 to
Plaintiffs’ attorneys to compensate them for the reasonable attorneys’ fees and costs they incurred in prosecuting the Plaintiffs’ representative PAGA claim to a final resolution.
In exchange for the settlement sums, Plaintiffs have signed a limited release of
liability that discharges Defendant 3PD, Inc. from any liability to Plaintiffs, the California Labor and Workforce Development Agency, and the non-party PAGA Contract Carriers for civil penalties under California Labor Code §§558 and 2698 et. seq. based on the alleged violations of law asserted in the Ardón lawsuit.
The Limited Release does not discharge Defendant from liability to, or waive
any claims possessed by you or any of the other non-party PAGA Contract Carriers against Defendant for unpaid wages or for violations of the Fair Labor Standards Act, the California Labor Code or any other or any other violations of the federal Fair Labor Standards Act, the California Labor Code, under any or any other provision of federal or state statutory or common law.
The terms of the PAGA Settlement were approved by the Court following a hearing
held on April 9, 2015 on the basis that the settlement terms are fair and reasonable.
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A true and correct copy of the Revised Notice is attached to this notice of lodging as
Exhibit A.
4. The Limited Release to the PAGA Settlement Agreement now reads as follows:
1. LIMITED RELEASE: Upon the Effective Date Plaintiffs, on behalf of themselves, the California Labor & Workforce Development Agency (“LWDA”) and each PAGA Contract Carriers, shall fully release and forever discharge any and all claims seeking civil penalties under California Labor Code Sections 558 and 2698 et. seq. predicated on the alleged California Labor Code violations asserted in the First Amended Complaint, filed November 15, 2013, (which include California Labor Code Sections 201-203, 221, 223, 226, 226.3, 226.7, 510, 512, 558, 1182.11 and 1194) during the period September 26, 2012 through the Effective Date, (hereinafter the “Released PAGA Claim”) against 3PD, and/or 3PD’s past or present parents, subsidiaries, and affiliated corporations, and/or 3PD’s officers, directors, employees, partners, agents, insurers, and/or any other individual or entity which could be liable for the acts of omissions of 3PD (hereinafter “Released Parties”). It is expressly understood and agreed that this limited release does not release Defendant from liability, if any, to the nonparty PAGA Contract Carriers for any claims they may assert against Defendant other than the PAGA claim for civil penalties asserted in the First Amended Complaint, or effect a waiver of claims, if any, the nonparty PAGA Contract Carriers may have against Defendant for unpaid wages or for violations of any statute other than PAGA.
// //
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A true and correct copy of the revised PAGA Settlement is attached to this notice of
lodging as Exhibit B.
I declare under penalty of perjury under the laws of the United States and the State of
California that the foregoing is true and correct.
Executed this 20th day of April, 2015 at Pittsfield, Massachusetts.
/s/ Beth Ross Beth A. Ross Attorneys for Plaintiff
Case 5:13-cv-01758-DTB Document 103 Filed 04/20/15 Page 5 of 19 Page ID #:1512
EXHIBIT A
Case 5:13-cv-01758-DTB Document 103 Filed 04/20/15 Page 6 of 19 Page ID #:1513
LEONARD CARDER, LLP
1330 Broadway, Suite 1450 Oakland, CA 94612
Telephone: (510) 272-0169 Fax: (510) 272-0174
www.leonardcarder.com
Dear __MAIL MERGE __:
We write to notify you about the settlement of a lawsuit that was filed against 3PD, Inc. by seven individuals - Cesar Ardón, Alfredo Arechiga, Luís Chavez, Jose Luís Mendez, Jose Antonio Ochoa, Heriberto Reyes, Sergio Salazar – who contracted with 3PD, Inc. to provide delivery and installation services – entitled Ardón et. al. v. 3PD, Inc., Case No. EDCV 13-01758-DTB in the U.S. District Court for the Central District California (referred to here as “the Ardón lawsuit”).
You are not a party to this lawsuit but you are receiving this letter because you may be eligible to receive a settlement payment. You have been identified by 3PD, Inc. as a person who signed a Delivery Service Agreement with 3PD and provided delivery services to 3PD as a “Contract Carrier” under that agreement in the State of California between September 26, 2012 and February 26, 2015. If this is the case, you are eligible to submit a claim for payment. Please read this notice carefully.
1. The Ardón Lawsuit
In the Ardón lawsuit, Plaintiffs alleged that 3PD violated the law by treating its California Contract Carriers as “independent contractors” instead of as “employees” and by not complying with federal and state employment laws. The lawsuit includes a representative claim against 3PD under the California Private Attorneys General Act of 2004 to recover civil penalties on behalf of the State of California and other 3PD contract carriers who, like them, signed Delivery Service Agreements and provided delivery services to 3PD under those agreements at any time after September 26, 2012 (referred to here as the “non-party PAGA Contract Carriers.”).
Plaintiffs contend that 3PD is liable to them and the non-party PAGA Contact Carriers for monetary civil penalties, because it did not pay its California Contract Carriers overtime compensation and minimum wages, it did not provide them with meal and rest periods, it did not reimburse them for their employment expenses, and other alleged violations of California law. Defendant 3PD contends that the Contract Carriers were not employees but instead were independent entities, and 3PD properly paid each Contract Carrier pursuant to the terms of its agreement with each of them.
The Court has not issued a ruling in this case in favor of either the Plaintiffs or 3PD. The Plaintiffs think they would have won at trial and 3PD thinks Plaintiffs would have lost. Both sides agreed that it would be best to agree to a settlement of the PAGA claim so that they could avoid the cost of a trial (referred to here as “the PAGA Settlement”).
EXHIBIT A-5
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2. What are the Terms of the PAGA Settlement?
The PAGA settlement provides for the creation of $1,000,000.00 (one million dollar) common fund (referred to here as the “PAGA Settlement Fund”) for the benefit of the California Labor and Workforce Development Agency and the non-party PAGA Contract Carriers. $940,000.00 of the PAGA Settlement Fund will be paid to Plaintiffs and the non-party PAGA Contract Carriers to settle the claim to collect civil penalties based on 3PD’s alleged failure to pay them overtime pay and minimum wages for their work. $60,000.00 will be paid to the State of California and the non-party PAGA Contract Carriers to settle the claim to collect fixed monetary penalties for other alleged violations of the California labor code.
The Court has also approved payment of an additional sum of $500,000.00 to Plaintiffs’ attorneys to compensate them for the reasonable attorneys’ fees and costs they incurred in prosecuting the Plaintiffs’ representative PAGA claim to a final resolution.
In exchange for the settlement sums, Plaintiffs have signed a limited release of liability that discharges Defendant 3PD, Inc. from any liability to Plaintiffs, the California Labor and Workforce Development Agency, and the non-party PAGA Contract Carriers for civil penalties under California Labor Code §§558 and 2698 et. seq. based on the alleged violations of law asserted in the Ardón lawsuit.
The Limited Release does not discharge Defendant from liability to, or waive any claims possessed by you or any of the other non-party PAGA Contract Carriers against Defendant for unpaid wages or for violations of the Fair Labor Standards Act, the California Labor Code or any other or any other violations of the federal Fair Labor Standards Act, the California Labor Code, under any or any other provision of federal or state statutory or common law.
The terms of the PAGA Settlement were approved by the Court following a hearing held on April 9, 2015 on the basis that the settlement terms are fair and reasonable.
3. How Will Submitting a Claim for Payment Affect Your Legal Rights?
Because you are not a party to the Ardón lawsuit, you have not released any claims you may possess against 3PD (if any) and you retain the right to pursue your legal rights or remedies (if any) against 3PD. The Limited Release executed in favor of Defendant 3PD/XPO prohibits Plaintiffs, the State of California, or another “private attorney general” from acting on behalf of the State (including the non-party PAGA Contract Carriers) from filing a representative claim under PAGA to recover civil penalties under Labor Code §2698 et. seq. against Defendant 3PD based on violations of the California Labor Code alleged in the Ardón lawsuit during the period September 26, 2012 and __________.
Nothing contained in this Notice or in the Settlement Agreement alters or eliminates the obligations set forth in the Delivery Services Agreement between you and 3PD. It is 3PD’s position that the Delivery Service Agreement contains an arbitration clause that will
EXHIBIT A-6
Case 5:13-cv-01758-DTB Document 103 Filed 04/20/15 Page 8 of 19 Page ID #:1515
apply to any future claims between you and 3PD. You should consult with counsel of your choice to obtain advice, regarding the applicability of the arbitration clause in the Delivery Service Agreement to any future claims.
4. Who is Eligible to Receive Payments from the PAGA Settlement Fund?
To be eligible to receive a settlement payment, you must have (1) signed a Delivery Service Agreement or similar contract with Defendant 3PD/ XPO to provide services as a Contract Carrier, and (2) provided delivery services to 3PD in the State of California under that agreement as a contract carrier sometime during the period between September 26, 2012 and February 26, 2015 (the “claim period”).
5. What is the Estimated Amount of Your Settlement Payment?
The amount of the actual payment will depend on the total number of valid claims that are submitted by the claim filing deadline. The $940,000.00 PAGA Settlement Fund will be divided in pro-rata shares among all those non-party PAGA Contract Carriers who submit valid claims to the court-appointed claim administrator by the claim filing deadline of ____.
The shares will be determined by dividing the total number of weeks worked during the claim period by each Contract Carrier who submits a timely claim by the total number of weeks worked during the claim period by all eligible Contract Carriers who submit valid, timely claims.
For example, if you worked during the entire claim period – 126 weeks – and all eligible non-party PAGA Contract Carriers who submit valid claims worked a total of 12,000 weeks during the claim period, you would be eligible for a minimum payment of $9870.00 (126 weeks / 12,000 weeks = .0105%; $940,000.00 x .0105% = $9870.00)
According to 3PD’s records, you were a 3PD Contract Carrier between __________ and ____________ for a total of _____ weeks. The total number of weeks worked by all potentially eligible Contract Carriers during the claim period is ____.
Under the settlement formula, you are entitled to receive a minimum payment of approximately __________ from the PAGA Settlement Fund. But, if less than 100% of the non-Party Contract Carriers who are eligible to share in the settlement fund send in valid claim forms, you could get more than the minimum payment.
If you believe the number of weeks you worked as a Contract Carrier during the claim filing period shown in 3PD’s records is not accurate – (i.e. September 26, 2012 through February 26, 2015) – please state the number of weeks you believe you worked during the claim filing period along on the claim form and submit the supporting evidence, such as copies of your settlement statement or other documents that show your dates of service.
EXHIBIT A-7
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6. How Do You Submit a Claim for Payment?
To receive your pro-rata share of the PAGA Settlement Fund, you must complete, sign and return the enclosed Claim Form to Simpluris, Inc., the court appointed Settlement Administrator, by the claim filing deadline of ____________. The claim must be post-marked no later than _________. Please use the enclosed self-addressed, stamped envelope to return your completed claim form.
PLEASE NOTE: If you do not submit a claim for payment by returning the enclosed Claim Form by the claim filing deadline of ____________, you will not receive any money from the settlement. The PAGA Settlement Fund will be divided among the non-party PAGA Contract Carriers who submit valid and timely claims by the deadline.
7. When Will You Receive Payment?
The estimated date for payment of valid and timely claims submitted to the settlement administrator is _______________.
8. Getting More Information
This notice summarizes the terms of the settlement. The full details are set forth in the written Private Attorney General Act Settlement Agreement and Release. You can get a copy of that Agreement by writing to the Settlement Administrator, Simpluris, Inc. ___________________ or by visiting the Settlement Administrator’s website at _________.
You may also contact the attorneys for Plaintiffs for more information about the settlement.
PLEASE DO NOT CONTACT THE COURT REGARDING THIS MATTER.
EXHIBIT A-8
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Language for Claim Form
According to 3PD’s records, you were a 3PD Contract Carrier between __________ and ____________ for a total of _____ weeks. The total number of weeks worked by all potentially eligible Contract Carriers during the claim period is ____.
Under the settlement formula, you are entitled to receive a minimum payment of approximately __________ from the PAGA Settlement Fund. But, if less than 100% of the non-Party Contract Carriers who are eligible to share in the settlement fund send in valid claim forms, you could get more than the minimum payment.
If you believe 3PD’s records do not accurately show the number of weeks you worked as a Contract Carrier during the claim filing period – September 26, 2012 through February 26, 2015 – please state the number of weeks you believe you worked during the claim filing period in the space below and submit, along with the claim form, all supporting evidence, such as copies of your settlement statement or other documents that show your dates of service.
EXHIBIT A-9
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EXHIBIT B
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1 PAGA SETTLEMENT AGREEMENT & RELEASE
PRIVATE ATTORNEYS GENERAL ACT SETTLEMENT AGREEMENT AND LIMITED
RELEASE
This Private Attorneys General Act Settlement Agreement and Release (“Agreement”) is
made by and between Cesar Ardon, Alfredo Arechiga, Luis Chavez, Jose Luis Mendez, Jose
Antonio Ochoa, Heriberto Reyes, and Sergio Salazar (“Plaintiffs”), for themselves and on behalf
of the State of California, and XPO Last Mile, Inc. (formerly known as 3PD, Inc.) (“3PD” or
“Defendant”). Plaintiffs and 3PD are collectively referred to herein as the “Parties” and may be
individually referred to as a “Party.” This Agreement is made in consideration of the following
facts:
A. WHEREAS, certain disputes have arisen between the Parties concerning their
relationship, including the classification of Plaintiffs, and all other persons and/or “Contract
Carriers” that signed Delivery Service Agreements with 3PD, Inc., and subsequently with XPO
Last Mile, on behalf of themselves and/or for another entity, and themselves performed services
in California between September 26, 2012 and February 26, 2015, inclusive (the “PAGA
Contract Carriers”), as independent contractors and/or Contract Carriers.
B. WHEREAS, Plaintiffs filed the action entitled Ardon et. al. v. 3PD, Inc., Case No.
13-cv-1758 DTB which is currently pending in the United States District Court for the Central
District of California based on the disputes described in Paragraph A above (the “Lawsuit”). In
their First Amended Complaint, Plaintiffs asserted ten claims for monetary damages and
equitable relief on their own behalf (“Individual Claims”) including (1) failure to Pay Overtime
– FLSA; (2) failure to Pay California Minimum Wage; (3) failure to Pay California Overtime;
(4) Reimbursement of Employment Expenses, Cal. Labor Code §2802; (5) unlawful deductions
from wages, Cal. Labor Code §§221 and 223; (6) failure to authorize and permit meal periods,
Cal. Labor Code §226.7 and §512; (7) failure to authorize and permit rest periods, Cal. Labor
Code §§226.7; (8) failure to furnish accurate wage statements, Cal. Labor Code §§226 and
226.3, (9) waiting time penalties, Cal. Labor Code §§201-203; and (10) Violations of the UCL,
Cal. B&P Code §17200 et. seq. Plaintiffs’ Eleventh Cause of Action asserts a representative
claim for civil penalties, underpaid wages and an award of reasonable attorneys’ fees and costs
payable to themselves, the State of California, and the PAGA Contract Carriers who they allege
were also misclassified as “independent contractors” by Defendant pursuant to the California
Private Attorney General Act (“PAGA”) set forth in California Labor Code §2698 et. seq.
(“Representative PAGA Claim”). 3PD denies all of the allegations in the Lawsuit and denies that
it has committed any misconduct, statutory or regulatory violation, wrongdoing, or any other
actionable conduct.
C. WHEREAS, the Parties understand, acknowledge, and agree that this Private
Attorney General Act Settlement Agreement constitutes a compromise of Plaintiffs and PAGA
Contract Carriers’ Representative PAGA Claim, and that it is the desire and intention of the
Parties to effect a final and complete resolution of the Representative PAGA Claim that Plaintiffs
and all PAGA Contract Carriers have against 3PD or any persons or companies affiliated with
3PD. The Parties further acknowledge that this Agreement is a compromise of disputed claims
and that nothing in this Agreement shall be construed as an admission by 3PD of liability.
EXHIBIT B-10
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2 PAGA SETTLEMENT AGREEMENT & RELEASE
D. WHEREAS, the Parties believe and agree that this Agreement provides for a fair,
adequate, and reasonable resolution of the PAGA Representative Claim, and have arrived at the
settlement in extensive, arms-length negotiations, taking into account all relevant factors, present
and potential.
E. WHEREAS, under California Law, the State may assess and collect civil
penalties from “employers” for violations of certain provisions of the Labor Code. See Cal. Lab.
Code §§ 2699(a) et seq. Under PAGA, however, if an “aggrieved employee” “give[s] written
notice by certified mail to the [State] and the employer of the specific provision of the [Labor
Code] alleged to have been violated,” and the State thereafter decides not to investigate, or does
investigate and determines that a citation against the employer should not issue, the employee
may, “as an alternative” to enforcement by the State, bring a civil action under PAGA to recover
the civil penalties “on behalf of himself or herself and other current or former employees.” Id.
“[C]ivil penalties recovered by aggrieved employees shall be distributed as follows: 75 percent
to the state and 25 percent to the aggrieved employees.” Id.
F. WHEREAS, California Labor Code section 2699(l) requires Court approval of
any penalties sought as part of a proposed settlement agreement pursuant to PAGA. Pursuant to
Labor Code section 2699(f)(2), the civil penalty for violations of the California Labor Code for
which there is not a civil penalty otherwise specifically provided is $100 for each “aggrieved
employee” per pay period for the initial violation and $200 for each “aggrieved employee” per
pay period for each subsequent violation.
G. WHEREAS, California Labor Code section 558 allows Plaintiffs and the PAGA
Contract Carriers to recover underpaid wages on their own behalf and on behalf of the PAGA
Contract Carriers, and where one-hundred percent of the recovered wages are paid to the
“aggrieved employees.” See also Thurman v. Bayshore Transit Mgmt., 203 Cal. App. 4th 1112
(2012).
H. WHEREAS, the Parties mutually desire to enter into a separate and related
Confidential Settlement Agreement and Release with respect to Plaintiffs’ Individual Claims.
(“Plaintiffs’ Individual Settlement Agreement”)
Therefore, in consideration of the promises and agreements contained herein, the Parties
agree and covenant as follows:
1. EFFECTIVE DATE: The effective date of the release of Plaintiffs and PAGA
Contract Carriers’ Representative PAGA Claim shall be the date the Court approves this
Agreement and the PAGA Settlement. (“Effective Date”).
2. LIMITED RELEASE: Upon the Effective Date Plaintiffs, on behalf of the
California Labor & Workforce Development Agency (“LWDA”) and each PAGA Contract
Carrier, shall fully release and forever discharge any and all claims seeking civil penalties under
California Labor Code Sections 558 and 2698 et. seq. predicated on the alleged California Labor
Code violations asserted in the First Amended Complaint, filed November 15, 2013, (which
include California Labor Code Sections 201-203, 221, 223, 226, 226.3, 226.7, 510, 512, 558,
1182.11 and 1194) during the period September 26, 2012 through the Effective Date,
EXHIBIT B-11
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3 PAGA SETTLEMENT AGREEMENT & RELEASE
(hereinafter the “Released PAGA Claim”) against 3PD, and/or 3PD’s past or present parents,
subsidiaries, and affiliated corporations, and/or 3PD’s officers, directors, employees, partners,
agents, insurers, and/or any other individual or entity which could be liable for the acts of
omissions of 3PD (hereinafter “Released Parties”). It is expressly understood and agreed that
this limited release does not release Defendant from liability, if any, to the nonparty PAGA
Contract Carriers for any claims they may assert against Defendant other than the PAGA claim
for civil penalties asserted in the First Amended Complaint, or effect a waiver of claims, if any,
the nonparty PAGA Contract Carriers may have against Defendant for unpaid wages or for
violations of any statute other than PAGA.
3. NOTICE TO PAGA CONTRACT CARRIERS:
a. No later than five (5) days after the Effective Date, 3PD shall provide the
Claims Administrator with a list of all PAGA Contract Carriers (the “PAGA Contract Carriers
List”). The PAGA Contract Carriers List shall state the PAGA Contract Carriers’ full names,
business names, contact information (including address, phone number, and drivers’ license
number), and dates of service.
b. No later than fourteen (14) days after the Effective Date, the Claims
Administrator will mail notice of settlement and claims forms to the PAGA Contract Carriers
identified on the PAGA Contract Carriers List. Should any of the notice of settlement and
claims forms be returned as undeliverable, the Claims Administrator will have until no later than
forty-five (45) days after the Effective Date to search for a more current address for the PAGA
Contract Carrier and to re-mail notices to traced addresses.
c. The deadline by which PAGA Contract Carriers must submit a claim shall
be sixty (60) days after the Effective Date.
4. PAGA SETTLEMENT PAYMENT PROCEDURES:
a. In exchange for Plaintiffs and PAGA Contract Carriers’ limited release of
any and all claims for civil penalties asserted or that could have be asserted under California
Labor Code Sections 558 and 2698, et. seq. (including PAGA penalties payable in part to the
State of California and penalties for alleged underpaid wages payable in full to the PAGA
Contract Carriers pursuant to California Labor Code Section 558 et. seq.) against the Released
Parties, 3PD agrees to pay, in accordance with the terms specified below, the total sum of
$1,000,000.00 (the “PAGA Fund”) to Plaintiffs, PAGA Contract Carriers, and/or the LWDA, as
apportioned below. 3PD agrees to fund the PAGA Fund established by the Claims
Administrator within sixty (60) days after the Effective Date.
b. A total of $940,000.00 of the PAGA Fund will be allocated to penalty
payments payable 100% to the PAGA Contract Carriers’ claim for underpaid wages (the
“Underpaid Wage Penalty Fund”), and each PAGA Contract Carrier shall receive a pro rata
share of this amount as further detailed in Paragraph 4(d) below.
c. A total of $60,000.00 of the PAGA Fund shall be allocated to civil
penalties (the “Penalties Fund”). A total of $45,000.00 (i.e., Seventy-Five percent (75%)) of the
Penalties Fund is to be paid to the California Labor & Workforce Development Agency in
EXHIBIT B-12
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4 PAGA SETTLEMENT AGREEMENT & RELEASE
satisfaction of all PAGA Claims in the Lawsuit (“LWDA PAGA Payment”). 3PD’s payment of
the LWDA PAGA Payment shall be made by the Claims Administrator from the PAGA Fund
within ten (10) days of the Effective Date. $15,000.00 (i.e., Twenty-Five percent (25%)) of the
Penalties Fund is to be held in reserve and used for potential disputed claims by the PAGA
Contract Carriers (“Disputed Claim Fund”). Any amounts not distributed to PAGA Contract
Carriers as a result of a disputed claim shall revert to the PAGA Fund.
d. PAGA Contract Carriers who submit a timely claim form shall receive a
pro rata share of the amount of the Underpaid Wage Fund, which shall include any amounts that
revert from the Disputed Claim Fund. Each PAGA Contract Carrier’s pro rata share shall be
determined based on the number of workweeks that he or she provided services to 3PD in the
State of California from September 26, 2012 through February 26, 2015 (the “Calculations
Period”) relative to the total number of workweeks during which all of the PAGA Contract
Carriers who submit timely and valid claims provided services to 3PD in the State of California
during the Calculations Period. These amounts paid to each PAGA Contract Carrier shall be
issued via an IRS Form 1099.
e. The Claims Administrator shall distribute Settlement Checks to PAGA
Contract Carriers in accordance with the procedures specified in Paragraph 4(d) for payment of
all undisputed claims no later than seventy-five (75) days after the Effective Date. The Claims
Administrator shall distribute Settlement Checks to PAGA Contract Carriers in accordance with
the procedures specified in Paragraph 4(d) for payment of all disputed claims no later than ninety
(90) days after the Effective Date. Payment of disputed claims shall be taken from the Disputed
Claim Fund.
f. Settlement Checks issued to PAGA Contract Carriers pursuant to this
Agreement will expire one hundred and eighty (180) days from the date they are issued by the
Claims Administrator. Any unclaimed funds after the 180 day period shall be remitted by the
Claims Administrator to the Legal Aid Society – Employment Law Center as a cy pres recipient.
5. ADMINISTRATION AND DISBURSEMENT COSTS: Within 20 days of the
Effective Date, 3PD agrees to place the sum of $25,000.00 in the Administration Fund. This
amount shall be used to pay for any fees and costs associated with the administration and
disbursement of the PAGA Fund. Should the administration and disbursement of the PAGA
Fund cost less than $25,000.00, the remainder shall revert back to 3PD.
6. COURT APPROVAL: Should the Court not approve this Agreement, the Parties
shall request leave and work jointly to attempt to remedy the PAGA settlement in order to obtain
the Court’s approval.
7. REPRESENTATIONS AND WARRANTIES: In further consideration for
payment of the PAGA settlement amounts, Plaintiffs each represent and warrant that they have
the right and exclusive authority to execute this Agreement. Each Party to this Agreement also
represents and warrants to, and agrees with, each other Party hereto as follows:
7.1 Each Party has carefully read, and knows and understands the full contents
of this Agreement and is voluntarily entering into this Agreement after having received
EXHIBIT B-13
Case 5:13-cv-01758-DTB Document 103 Filed 04/20/15 Page 16 of 19 Page ID #:1523
5 PAGA SETTLEMENT AGREEMENT & RELEASE
independent legal advice from his or its attorneys with respect to the advisability of making the
settlement provided for herein and the advisability of executing this Agreement.
7.2 In executing this Agreement and in making the settlement provided for
herein, no Party relies or has relied on any statement, representation, omission, inducement, or
promise of any other Party (or any officer, agent, employee, representative, or attorney for any
other Party), except as expressly stated in this Agreement.
7.3 Each Party to this Agreement has investigated the facts relevant to this
settlement and this Agreement, and all matters pertaining thereto, to the full extent that each
Party deems necessary.
7.4 Each separately-numbered term of this Agreement is contractual, not
merely a recital.
7.5 Each of the Parties has participated in the drafting of all provisions of this
Agreement, has had an adequate opportunity to read, review, and consider the effect of the
language of this Agreement, and has agreed to its terms.
8. CHOICE OF LAW: The rights and obligations of the Parties and the PAGA
Contract Carriers under this Agreement shall be construed and enforced in accordance with, and
governed by, the laws of the State of California. California law shall govern the interpretation of
this Agreement even if a choice of law analysis under state or federal law would dictate that
another forum’s law be applied.
9. COOPERATION: Each Party, on behalf of themselves, and their respective
business entities, heirs, executors, and assigns, agrees that they will abide by this Agreement and
will do all such acts, and prepare, execute, and deliver all such documents, as may be reasonably
required to carry out the stated objectives of this Agreement.
10. SEVERANCE: If any provision of this Agreement is held to be invalid by a
court of competent jurisdiction, that provision shall be deemed severed and deleted from this
Agreement, and neither that provision nor its severance and deletion shall affect the validity of
the remaining provisions. Notwithstanding the foregoing, no portion of any release contained
herein may be deemed severed or deleted from this Agreement, except upon waiver in writing by
the applicable 3PD Released Party.
11. NON-ADMISSION OF WRONGDOING: The Parties agree that this Agreement
does not constitute an admission by 3PD or any of the Released 3PD/XPO Parties, as defined in
the Plaintiffs’ Individual Settlement Agreement, of any of the matters alleged in the Lawsuit or
of any violation by any of them of any federal, state or local law, ordinance or regulation, or of
any violation of any policy or procedure, or of any liability or wrongdoing whatsoever. Neither
this Agreement nor anything in this Agreement shall be construed to be or shall be admissible in
any proceeding as evidence of liability or wrongdoing by Plaintiffs, 3PD or any of 3PD’s
parents, subsidiaries, divisions, affiliated corporations, trustees, directors, officers, shareholders,
agents, attorneys, insurers, or employees.
EXHIBIT B-14
Case 5:13-cv-01758-DTB Document 103 Filed 04/20/15 Page 17 of 19 Page ID #:1524
6 PAGA SETTLEMENT AGREEMENT & RELEASE
12. ADDITIONAL TERMS:
12.1 This Agreement is binding upon, and shall inure to the benefit of, the Parties
hereto and their respective agents, employees, representatives, officers, directors, parents,
subsidiaries, assigns, heirs, executors, administrators, insurers, and successors in interest.
12.2 Given that all Parties hereto had the opportunity to draft, review, and edit the
language of this Agreement, no presumption for or against any Party arising out of drafting all or
any part of this Agreement may be applied in any action relating to, connected to, or involving
this Agreement. Accordingly, the Parties hereby waive the benefit of any legal principle or rule
providing that, in cases of uncertainty, the language of a contract should be interpreted against
the Party who caused the uncertainty to exist.
12.3 This Agreement may be executed in counterparts. A signature by way of
facsimile shall serve as an original for all purposes.
12.4 Headings in this Agreement are included solely for convenience and shall not
control the meaning or interpretation of any provision of this Agreement.
12.5 Nothing in this Agreement is intended to alter or impact the terms of the Delivery
Service Agreements entered into between 3PD and the non-party PAGA Contract Carriers.
13. ENTIRE AGREEMENT: This Agreement sets forth the entire agreement between
the Parties hereto and fully supersedes any and all prior and/or supplemental understandings,
whether written or oral, between the Parties concerning the subject matter of this Agreement.
Plaintiffs acknowledge that they have not relied on any representations, promises or agreements
of any kind made to them in connection with their decision to accept the terms of this
Agreement, except for the representations, promises and agreements herein. Any modification to
this Agreement must be in writing and signed by Plaintiffs and an authorized officer of 3PD.
IN WITNESS WHEREOF, the parties knowingly and voluntarily executed this Private
Attorneys General Act Settlement Agreement and Release as of the date set forth below.
Agreed to by Plaintiffs:
Dated: ____________________ _____________________________
Cesar Ardon
Plaintiff
Dated: ____________________ _____________________________
Alfredo Arechiga
Plaintiff
Dated: ____________________ _____________________________
Luis Chavez
Plaintiff
EXHIBIT B-15
Case 5:13-cv-01758-DTB Document 103 Filed 04/20/15 Page 18 of 19 Page ID #:1525
7 PAGA SETTLEMENT AGREEMENT & RELEASE
Dated: ____________________ _____________________________
Jose Luis Mendez
Plaintiff
Dated: ____________________ _____________________________
Jose Antonio Ochoa
Plaintiff
Dated: ____________________ _____________________________
Heriberto Reyes
Plaintiff
Dated: ____________________ _____________________________
Sergio Salazar
Plaintiff
DEFENDANT
Dated: ____________________ _____________________________
Gordon Devens
Senior Vice President and Secretary
For Defendant 3PD, Inc.
APPROVED AND ACKNOWLEDGED BY PLAINTIFFS’ COUNSEL:
Dated:_____________________ ______________________________
Beth Ross, Esq.
LEONARD │CARDER
Attorneys for Plaintiffs
Dated:_____________________ ______________________________
David A. Rosen, Esq.
ROSE, KLEIN & MARIAS, LLP
APPROVED AND ACKNOWLEDGED BY DEFENSE COUNSEL:
Dated:_____________________ ______________________________
Robert G. Hulteng, Esq.
Carlos Jimenez, Esq.
LITTLER MENDELSON
Attorneys for Defendant
3PD, Inc. Firmwide:132962401.2 069801.1010
EXHIBIT B-16
Case 5:13-cv-01758-DTB Document 103 Filed 04/20/15 Page 19 of 19 Page ID #:1526