Labor suit against dating app nears settlement

A labor law violation case approached its final stages when San Francisco Superior Court Judge Andrew Cheng issued a tentative ruling to iron out details of an unopposed motion for preliminary approval for a class action settlement involving Coffee Meets Bagel Inc.

Coffee Meets Bagel is a company based in San Francisco that runs a dating app service and is accused of violating California labor laws by purposely misclassifying employees as independent contractors, failing to pay contractors at least double the San Francisco minimum wage as required by California law, failing to pay overtime compensation, failing to pay all wages due upon termination, failing to provide a number of meal and rest breaks and failing to provide sick leave and sick pay, among other claims.

Named plaintiffs also claimed they were wrongfully terminated when they were fired after complaining about unpaid overtime wages and misclassification.

This case follows the recent trend of tech companies landing in hot water because of the practice of classifying their workers as contractors -- the most notable being Uber and Lyft and Proposition 22, which was declared unconstitutional by a superior court judge this August.

In its initial and amended complaints, plaintiffs' counsel sought damages in the combined total amount of $2 million as well costs of the suit and attorney fees.

The class is made up of 67 members, all of whom worked for Coffee Meets Bagel from May 2015 to May 2019 and were classified as independent contractors.

After negotiations, both parties have agreed to settle the class claims for $230,000 on a non-reversionary, common fund basis. Class counsel seeks almost $77,000 in fees and costs, equal to one-third of the common fund settlement.

Attorney for the plaintiffs and class members Carlos Jato of San Francisco wrote in his declaration of support for the motion that he and his partner, Daniel Berko, spent well over 150 hours working on this case for well over two years.

Jato also said the class claims were "generally strong. If plaintiffs had prevailed in their claim for penalties, ... arguably the court would have imposed a penalty per misclassified employee of at least $10,000." This, added with the compensation of unpaid overtime wages, would have amounted to a total judgment of potentially $900,000, Jato argued.

"I have no questions in my mind that further litigation would impose great costs on [Coffee Meets Bagel] (very substantial attorney's fees mainly) but almost certainly at no benefit to the class," Jato wrote. "The class's own costs would also increase and very likely simply reduce the amount class members get in the end. ... It is very much in the class's interests that CMB continues doing business both because it supplies employment to many workers and most especially because it needs to generate cash in order to pay the settlement."

However, in his tentative ruling on Dec. 2, Cheng sought additional evidence and clarification for some of the claims made by plaintiffs' counsel in the motion.

The judge wanted plaintiffs to provide evidence of their adequacy for class certification, to disclose the individual benefits received or that they may receive as a result of any individual settlement agreements, a claim-by-claim evaluation of back arguments that maximum damages are likely to be $1 million and that the final settlement amount was reached in part because the maximum amount would bankrupt Coffee Meets Bagel.

Cheng was also concerned about how the settlement would be distributed, including how Jato was planning to inform class members.

Attorneys representing Coffee Meets Bagel could not be reached for comment by press time. Vanessa Bustos v. Coffee Meets Bagel, Inc., CGC-19-575734 (S.F. Super. Ct., Filed Dec. 2, 2021).