JON S. TIGAR, District Judge.
In this conditionally certified action for violations of the Fair Labor Standards Act ("FLSA"), Plaintiffs move for approval of the parties' second modified settlement agreement, final collective action certification for settlement purposes, authorization for the parties to effectuate their settlement agreement, and equitable tolling. ECF No. 218. Defendants have filed a statement in support of Plaintiffs' motion for approval pursuant to Civil Local Rule 7-3(b). ECF No. 219. For the reasons set forth below, the Court will approve the second modified settlement agreement, certify the collective action for settlement purposes, and authorize the parties to effectuate their settlement, but will deny the request for equitable tolling.
Defendant CrowdFlower, Inc. ("CrowdFlower") is an internet-based company that distributes small and simple repetitive tasks to individuals in exchange for pay on a per-task basis. Second Am. Compl. ("SAC") ¶¶ 4, 8, 16-20, ECF No. 121. CrowdFlower gets projects from various customers, breaks the projects into pieces, and assigns the pieces to contributors. ECF No. 46, Ex. 1. The tasks that CrowdFlower assigns typically take a few minutes to complete and do not require any special skill. SAC ¶ 22; ECF No. 46, Ex. 5 at 2. The most common type of task is verifying business listings. ECF No. 46, Ex. 3 at 11. This distribution of small tasks to individuals is commonly referred to as "crowdsourcing." SAC ¶ 16. Defendants Lukas Biewald and Chris Van Pelt are the Chief Executive Officer and Chief Technology Officer of CrowdFlower, respectively.
Named Plaintiffs Christopher Otey and Mary Greth performed tasks for CrowdFlower through a website called Amazon Mechanical Turk ("AMT"). ECF No. 219-1 ¶ 7. The gravamen of their Complaint is that CrowdFlower pays its contributors, whom it classifies as independent contractors, less than the minimum wage under FLSA, 29 U.S.C. § 206(a), and Oregon law, ORS §§ 653.025 and 652.150. SAC ¶¶ 5, 36. Plaintiffs bring their Oregon law claims as class action claims under Rule 23.
On August 27, 2013, the Court granted Plaintiffs' Motion for Conditional Certification of a Collective Action, and conditionally certified the following class:
ECF No. 167 at 8. In the same order, the Court approved Plaintiffs' proposed notice and consent form and ordered that notice should be emailed to the class members and posted online.
On January 24, 2014, Plaintiffs filed a Motion for Approval of FLSA Collective Action Settlement, Final Collective Action Certification for Settlement Purposes Only, and Authorization for the Parties to Effectuate Their Settlement, which the Court denied on April 15, 2014. ECF Nos. 187, 195. On December 16, 2015, the Court denied Plaintiffs' motion for approval of a modified settlement agreement, identifying several remaining deficiencies that precluded approval at that stage. ECF Nos. 207, 210. First, the Court found that the parties had not adequately explained why the proposed settlement class included only workers who completed tasks through AMT, excluding workers who completed tasks through other platforms. ECF No. 210 at 8-9. Second, the Court sought an explanation of the statement that the settlement would provide "immediate protection" to crowdsourced workers, as the proposed settlement did not include an injunctive relief component.
On April 8, 2015, Plaintiffs filed a new Motion for Approval of Parties' Second Modified FLSA Collective Action Settlement, Final Collective Action Certification for Settlement Purposes Only, Authorization for the Parties to Effectuate their Settlement, and Request for Tolling. ECF No. 218.
The parties to the second modified settlement agreement are Defendants CrowdFlower, Inc., Lukas Biewald, and Chris Van Pelt, and Named Plaintiffs Christopher Otey and Mary Greth, on behalf of all settlement class members. Second Modified Stipulation of Settlement of Collective Action ("Settlement"), ECF No. 218-1. Under the agreement, Defendants will pay a total of $585,507.00, to be allocated as follows: (1) a net settlement amount available for class member's claims estimated at $297,672.66; (2) claims administration expenses not to exceed $70,000.00;
For the purpose of settlement, the parties have stipulated to the decertification of the conditionally certified class and the certification of a provisional settlement class of
Claims administrator Simpluris Inc. will mail class notice and settlement award checks to all members of the provisional settlement class at their last known or updated address.
The parties' notice plan provides that Simpluris will promptly resend any returned class notice and settlement check after reasonable efforts to determine a correct address; issue reminder postcards; re-issue settlement award checks for a period of up to three years after initial mailing; and undertake reasonable efforts to contact provisional class members who have not yet negotiated their settlement checks every 180 days until the expiration of the three-year period.
Plaintiffs agree to release:
This Court has jurisdiction over this action under 28 U.S.C. § 1331.
The FLSA was enacted for the purpose of protecting workers from substandard wages and oppressive working hours.
The Ninth Circuit has not established the criteria that a district court must consider in determining whether an FLSA settlement warrants approval. Most courts in this circuit, however, first consider whether the named plaintiffs are "similarly situated" to the putative class members within the meaning of 29 U.S.C. § 216(b) (providing that an aggrieved employee may bring a collective action under the FLSA on behalf of himself and "other employees similarly situated").
The Court has previously determined that because the new class is composed entirely of members of the already conditionally certified class, these contributors are likewise similarly situated, and that no further certification analysis is necessary.
Similarly, the Court has determined that this case arises from a "bona fide dispute" concerning potential liability under the FLSA.
In evaluating a proposed FLSA settlement, a district court must determine whether the settlement reflects "a fair and reasonable resolution of a bona fide dispute."
The Court concludes that the second modified settlement agreement is a fair and reasonable settlement of the parties' dispute. As Plaintiffs acknowledge, they faced significant risks at several stages of the case, including Rule 23 class certification of the Oregon state claims, FLSA class decertification, dispositive motions, trial, and any appeal. ECF No. 218 at 9. This settlement provides immediate relief to class members, and avoids the substantial risk of continued litigation on the merits, which may take several years.
In addition, Plaintiffs' motion for approval of the parties' second modified settlement and Defendants' statement in support of the motion address each concern voiced by the Court in its December 16, 2014, order.
Both parties have provided further information concerning the scope of the settlement class, which includes only workers who performed tasks through AMT. Plaintiffs explain that the limitation of the settlement to AMT workers is "a matter of administrative necessity," because the only individuals who can reasonably be identified as performing at least $5.00 worth of work are individuals who performed work through AMT, rather than other channels. ECF No. 218 at 10-11. In addition, Plaintiffs state that no non-AMT worker has filed a claim for unpaid wages against Defendants or opted in to this litigation.
Defendants agree that the scope of the class should not preclude settlement. They argue, inter alia, that because no notice has been issued to the members of the conditionally certified class, there is little concern that non-AMT workers are refraining from filing suit in reliance on the pendency of this action. ECF No. 219 at 4. Defendants note that although the case has been pending since October 2012, only one claimant other than the named Plaintiffs has opted in, and no similar or related actions have been filed.
Both parties suggest that the Court's concern with respect to the statute of limitations should be allayed because the Ninth Circuit has adopted and read into the FLSA the doctrine of equitable tolling.
With respect to the Court's inquiry about Plaintiffs' representation that their previous settlement agreement would provide immediate protection to online crowdsourced workers, Plaintiffs explain that the statement was inadvertently included in their prior motion due to a clerical error. ECF No. 218 at 12. The statement does not appear in the instant motion.
In its December 16, 2014, order, the Court directed the parties to submit admissible evidence concerning Defendants' financial situation in support of any renewed argument that the settlement agreement is fair and reasonable in part because "a significant adverse judgment would likely be uncollectable" and pushing for greater recovery "would have forced Defendants out of business either through a judgment or crippling debt." ECF No. 210 at 9. Defendants have filed under seal a declaration signed by J. Duross O'Bryan, a certified public accountant, attesting to CrowdFlower's financial position based on his review of its financial documents. ECF No. 220-2. The Court has reviewed this declaration and concludes that it provides the necessary evidentiary support for the parties' arguments concerning Defendants' financial situation.
In response to the Court's prior order, the parties have eliminated the reversion clause from the settlement agreement and restructured the claims process so that payments will be made directly to class members at the same time that notice is provided. These changes fully address the Court's concern that as much of the gross settlement amount as is practicable should be distributed to settlement class members.
The parties have also revised the releases for opt-in class members, as well as the previously unlimited releases to be signed by named Plaintiffs Greth and Otey. The new release for settlement class members provides for the release of only claims under the FLSA. Settlement Agreement § I(34). Otey and Greth release claims under the FLSA and agree not to perform crowdsourced work for CrowdFlower in the future. ECF Nos. 218-9, 218-10. Otey also releases his Oregon state law claims. ECF No. 218-10. The Court finds these revised releases to be fair and reasonable.
In view of the factors discussed above, the Court concludes that the proposed settlement agreement is "a fair and reasonable resolution of a bona fide dispute," and will therefore approve it.
The Court previously found Plaintiff's $146,377.00 proposed attorneys' fee award to be reasonable. ECF No. 210 at 13. It also found that the reported itemized costs, totaling $50,457.34, were reasonable, although it rejected the $52,000.00 proposed award because it exceeded the actual costs reported.
The Court previously found that the proposed incentive awards in the amount of $6,000.00 for Plaintiff Otey and $5,000.00 for Plaintiff Greth fairly and reasonably compensate them for their work on behalf of the class and for the reputational risk they have undertaken. ECF No. 210 at 14.
The Court finds that the proposed class notice, ECF No. 218-8, adequately informs the provisional class members of their rights under the settlement, the procedure to opt-in and claim their respective shares under the settlement, and the consequences of both negotiating and choosing not to negotiate their settlement checks. The notice also directs provisional class members to an online version of the settlement agreement and provides contact information for the claims administrator and class counsel. Finally, the notice informs provisional class members that they may review the Court's files at the Clerk's Office located in San Francisco. It does not, however, inform provisional class members that they may access the case docket via PACER. Accordingly, the Court will approve the proposed notice, except that the final sentence of the first paragraph of section "IX. Additional Information," shall be revised as follows:
See ECF No. 218-8 at 8.
For the foregoing reasons, the Court hereby orders as follows:
1. The Court grants approval of the parties' second modified collective action settlement.
2. The Court decertifies the conditionally certified collective action, and certifies a provisional settlement class of:
3. The Court approves the class notice, subject to the revision ordered above.
4. The Court appoints the law firms of Weinhaus & Potashnick and Feinstein Doyle Payne & Kravec, LLC, as class counsel.
5. The Court approves claims administration expenses in an amount not to exceed $70,000; attorneys' fees in the amount of $146,377.00; costs in the amount of $50,457.34; and representative service awards in the amount of $5,000.00 for Mary Greth and $6,000.00 for Christopher Otey.
6. The Court retains continuing jurisdiction over (a) implementation of the settlement; (b) any further proceedings, if necessary; and (c) the parties and the class members for the purpose of construing, enforcing, and administering the Settlement Agreement.
7. The Court denies Plaintiffs' request for equitable tolling.