Facts

On April 11, 2014, Eliazar Sanchez filed a putative class action in Kern Superior against Frito-Lay Inc. At that time, Sanchez alleged wage and hour violations. The following month, on May 23, 2014, Frito-Lay removed the case to federal court. There, Sanchez's counsel determined that the proposed defined class needed to be narrowed to cover only employees in a certain position: Maintenance Mechanic. Upon narrowing the class, they proceeded, thereafter, on two primary allegations related to the narrowed class: that Frito-Lay engaged in a company-wide practice wherein employees were denied a second meal period for every shift of ten or more hours; and, that Frito-Lay's company-wide practice and written rest break policy failed to authorize and permit a third rest break for shifts of ten or more hours. The parties participated in mediation and the court granted preliminary approval of the settlement on October 30, 2020, which omitted references to PAGA and FLSA violations and released only the claims that arose during the class period. The previously allocated PAGA penalties of $5,000 were reallocated to the payout fund to be distributed to the class members. Over the years, the parties sought the court's approval of the proposed settlement. The court rejected the settlement over concerns about the inclusion of employees in the 5x8 subclass (employees who worked 8 hours per day, 5 days per week) and the allocation of the payout fund between the 4x10 (10 hours per day, 4 days per week) and 5x8 subclass. The court felt there had been no analysis to determine whether employees in the 5x8 subclass were eligible for second meal periods and even if so, there was no analysis on how the payout fund should be allocated between the two subclasses. The parties then sought the services of an expert economist, Deepak Goel, to guide their attempt to restructure the settlement so that it allocated the payout fund fairly between the subclasses. Goel used the time and payroll data to extrapolate damages to each subclass's balance and calculated the total potential exposure for the second meal and third rest break violations. The result served as the basis for the parties' renegotiated settlement.

PLAINTIFF'S CONTENTIONS: Initially, plaintiff, Sanchez, alleged the following causes of action: failure to pay regular hourly wages; failure to pay overtime wages; failure to pay the correct overtime rate of pay; failure to pay premium wages for denial of meal and rest periods; failure to pay vested vacation wages; illegal deductions of vested vacation wages; breach of contract for failure to pay vested wages; failure to pay final wages due upon termination; failure to provide accurate itemized wage statements; and violation of the Unfair Competition Law. As stated above, the PAGA and FLSA violations were later omitted from the final settlement and penalties allocated to such were subsumed into the payout fund.

DEFENDANT'S CONTENTIONS: Defendant, Frito-Lay, denied and continues to deny each of the claims and contentions and any wrongdoing or legal liability arising out of the facts or conduct alleged in the complaint.

Injuries

The parties participated in mediation, with mediator Mark Rudy, on November 25, 2014 which resulted in a settlement agreement. During negotiations, defendant, Frito-Lay, extended the class period an additional 15 weeks to cover the time it conducted refresher management and maintenance teams' on-site training to address the allegations made in the suit.

Result

The parties agreed to a non-reversionary settlement of $710,473.33.