18th Annual Workplace Class Action Report - 2022 Edition

742 Annual Workplace Class Action Litigation Report: 2022 Edition that a class action would be the superior method of adjudication as there were no other related WARN Act claims filed against Defendant, class members could be easily identified from Defendant’s employment records, and the forum was ideal for concentrating the litigation of the claims against Defendant. F these reasons, the Court granted Plaintiffs’ motion for class certification. Pennington, et al. v. Fluor Corp., 2021 U.S. App. LEXIS 35307 (4th Cir. Nov. 30, 2021). Plaintiffs, a group of construction workers, filed a class action alleging that Defendants knowingly failed to give their employees at least 60-days prior notice of termination of their employment as required by the Worker Adjustment and Retraining Notification (“WARN”) Act after the project they were working on closed to due financial hardship by the companies. The District Court previously had granted Defendants’ separate motions for summary judgment. It held that Defendant SCANA was not Plaintiffs’ employer and thus not liable under the WARN Act, and that Defendant Fluor was relieved of any obligation to provide 60- days of notice by the unforeseeable business circumstances exception. On appeal, the Fourth Circuit affirmed the District Court’s ruling. The Fourth Circuit found that the District Court correctly determined that SCANA, an electric and natural gas public utility, did not employ Plaintiffs, as they were employed solely by the contracting firms entirely unaffiliated with SCANA. Plaintiffs did not dispute that the project shutdown was sudden, but contended that Fluor failed to provide "as much notice as is practicable," as was required for employers who relied on the unforeseeable business circumstances exception. Id . at *18. Plaintiffs argued that Fluor violated this provision by giving notice belatedly and improperly. The Fourth Circuit rejected Plaintiffs’ contention. It noted that the record showed that Fluor took steps to provide the required information to its employees, even during the unsettling circumstances of the sudden shutdown. Id . at *22. Fluor’s human resources team drafted and distributed an FAQ document to the Fluor employees on the very day of the shutdown while working remotely from a local hotel, provided notice the following day to state and local officials, and within six business days they began sending a total of 50,000 pages of notice to its employees. Id . The Fourth Circuit agreed with the District Court that "such notice was reasonable given the magnitude of the Project, the presence of thousands of workers at the job site, and the abrupt nature of the shutdown." Id. at *22-23. Plaintiffs also argued that the notice sent was defective, since it failed to include a required telephone number. The Fourth Circuit, however, opined that the WARN regulations were clear that "minor, inadvertent errors" were not "to be the basis for finding a violation of WARN." Id . at *23. Accordingly, the Fourth Circuit concluded that Fluor complied with its requirements under the WARN Act, and thus affirmed the District Court’s grant of summary judgment to both SCANA and Fluor. Philips, et al. v. Munchery Inc., 2021 U.S. Dist. LEXIS 18711 (N.D. Cal. Feb. 1, 2021). Plaintiffs brought a putative class action under the Worker Adjustment and Retraining Notification ("WARN”) Act, and its California state law counterpart, the California Labor Code § § 1400 ("CAL-WARN") (together, "WARN Acts"), against their former employer. Plaintiffs alleged that Defendant failed to provide its employees with written notice 60 days prior to their termination, as required under the WARN Acts. The parties reached a settlement agreement, and Plaintiffs’ brought an unopposed motion for final approval of the parties’ class action settlement agreement and motion for attorneys’ fees, costs, and a class representative incentive award. The parties agreed to a gross settlement amount of $400,000. The agreement provided that payments of $5,000 to class representatives, and class counsel’s fees of up to $126,666 and expenses, would be deducted from the fund. The agreement further provided that the remaining $222,710, was to distributed among the 268 class members. The Court determined that for purposes of settlement, the requirements of Rule 23(a) and 23(b)(3) were satisfied. Further, the Court found that the terms of the parties’ settlement were fair, adequate, and reasonable under Rule 23(e). In making this determination, the Court considered various fairness factors, including: (i) the strength of Plaintiff’s case; (ii) the risk, expense, complexity, and likely duration of further litigation; (iii) the risk of maintaining class action status throughout the trial; (iv) the amount offered in settlement; (v) the extent of discovery completed and the stage of the proceedings; (vi) the experience and views of counsel; and (vii) the reaction of the class members to the proposed settlement. Further, because the settlement was reached prior to class certification, the Court examined the settlement for evidence of collusion. Notwithstanding the fact that the agreement contained a “clear sailing” provision and class counsel’s fees were 40% of its lodestar, the Court concluded that the settlement agreement did not result from, nor was it influenced by, collusion. Instead, the Court ruled that the settlement agreement adequately satisfied the class members’ claims given the unique circumstances, i.e. , Defendant had gone out of business and declared bankruptcy. Finally, the Court found that counsel’s fee request of $126,666, was appropriate. While this amount was 30% of the settlement value, the Court opined that