Objection Overruled: Miller & Martin Bucks Trend and Obtains Affirmation of an Early Settlement in a California Wage and Hour Class Action

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Pilot fish shadow sharks, letting the sharks do the hard work and then feeding off their leftovers. The “objector” to class action settlements in California has assumed a similar role. Any company with employees in California already is at risk of being bitten by a wage and hour class action. The parties often settle these lawsuits, but the court must approve the settlement before it becomes final. During this process, class members may file “objections” to the proposed settlement. An increasing number of plantiffs' law firms are now filing objections in cases that are not their own, hoping to ratchet up the cost of settlement and to earn a piece of the pie for their efforts. Objectors typically claim that the parties have not investigated the claims sufficiently and that the dollar value of the settlement is too low relative to total potential exposure.

Once upon a time courts tended to approve wage and hour class action settlements as a matter of course. Those times are gone. A number of California appellate court decisions, led by Kullar v. Foot Locker Retail (2008) 168 Cal.App.4th 116 and Clark v. American Residential Services (2009) 175 Cal.App.4th 785, have reversed approval of these class action settlements. Meanwhile, some lower courts have established guidelines calling for greater scrutiny of class action settlements. These developments make for rough waters for employers hoping to reach early, reasonable settlements, while minimizing litigation costs.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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