GROSSE, J.
¶ 1 Court approval is not required of a settlement of a lawsuit brought by a union in its associational capacity when it is brought by the union itself, as here, and not as a class naming certain members as representative parties. Accordingly, we reverse.
¶ 2 King County Public Hospital District No. 2 operates Evergreen Hospital Medical Center (Evergreen). Evergreen includes 26 separate, independently-managed medical departments. Each department varies in its procedures for meal and rest breaks for its registered nurses (RNs).
¶ 3 On September 15, 2010, the Washington State Nurses Association (WSNA), the exclusive bargaining unit for RNs at Evergreen, filed a lawsuit against Evergreen seeking to enforce state required rest periods for RNs. The suit was based on Washington's Industrial Welfare Act,
¶ 4 On September 17, 2010, a similar suit against Evergreen was filed as a putative class action by two former emergency department RNs, Debra Pugh and Aaron Bowman, seeking unpaid wages for alleged missed rest breaks and missed or interrupted meal breaks. On February 4, 2011, Pugh and others (Pugh) moved to intervene in the WSNA case in an effort to challenge WSNA's standing to sue for damages on their behalf and to protect their interests in obtaining full back pay damages for missed breaks.
¶ 5 On February 10, 2011, WSNA and Evergreen entered into a settlement agreement to settle the RNs' rest break claims for $375,000. As part of the agreement WSNA
¶ 6 On February 17, 2011, WSNA held a meeting at the hospital and informed the RNs about their options to participate in the settlement or pursue wage claims on their own, including by joining the Pugh lawsuit. Debra Pugh was present at the meeting and distributed information about the class action lawsuit, encouraging the RNs not to participate in the settlement.
¶ 7 On February 18, 2011, WSNA and Evergreen filed a joint motion for court approval of the settlement. The trial court set a hearing date on the motion for March 18, 2011 and set a briefing schedule. The deadline for filing objections to the settlement was set as March 9, 2011. On February 25, 2011, during a scheduling telephone conference with the parties, the trial court (Judge Middaugh) questioned its authority to approve such a settlement.
¶ 8 On March 2, 2011, Pugh deposed Evergreen's representative, Kathleen Groen, and asked her whether, during settlement negotiations, Evergreen had determined a back pay amount owed to the RNs for missed breaks. Groen stated that for settlement purposes, Evergreen came up with one calculation that estimated an amount of $600,000 in back pay, which was based on results in similar lawsuits and assumptions that most nurses did in fact receive their breaks. Groen also confirmed that Evergreen did not have records of missed breaks or the amount of back pay owed.
¶ 9 On March 4, 2011, WSNA and Evergreen filed a joint motion to dismiss WSNA's lawsuit and the court entered a stipulation and agreed order of dismissal of the lawsuit. The motion for joint settlement approval was then stricken as well as Pugh's motion to intervene. Pugh filed an appeal of this dismissal, but ultimately dismissed that appeal.
¶ 10 On March 9, 2011, WSNA mailed letters to the RNs describing the settlement and notifying them that they would be sent a check for their portion of the settlement that they could either accept and release the right to sue Evergreen, or send back and retain the right to pursue their own lawsuit. The checks were mailed to 1,257 RNs along with a letter explaining the purpose of the check and the legal consequences of keeping the check. Counsel for Pugh also sent a letter to the RNs, asserting that his firm could recover more for them and warning that they could not cash the check and be a part of the class action lawsuit for missed rest breaks and had to return the check if they wanted to be a member of the rest break class action.
¶ 11 On August 19, 2011, Pugh amended the complaint to add Floann Bautista, a nurse who settled her rest break claim and executed a release, as a putative member of a subclass consisting of all RNs who settled their individual claims. The amended complaint challenged the validity of the WSNA settlement and the individual releases. Evergreen then tendered defense of the settlements to WSNA, under the indemnity provision of the settlement agreement, and WSNA intervened.
¶ 12 Pugh then asked the court to certify the following class and subclass:
Pugh also moved for partial summary judgment to invalidate the WSNA settlement agreement and the individual releases and to dismiss WSNA from the lawsuit. Evergreen cross moved for summary judgment, based on evidence that Bautista knowingly released her rest break claims.
¶ 13 The trial court granted Pugh's motion for class certification and motion for partial
¶ 14 Evergreen contends that the trial court erred by invalidating the settlement on the basis that the parties did not obtain court approval of the settlement agreement because the case was not a class action requiring such court approval. We agree.
¶ 15 CR 23(e) provides, "A class action shall not be dismissed or compromised without the approval of the court, and notice of the proposed dismissal or compromise shall be given to all members of the class in such manner as the court directs." The trial court concluded that court approval of the settlement agreement was required because it was brought on behalf of the member nurses and therefore class action rules applied:
¶ 16 While Pugh is correct that both WSNA and Evergreen initially jointly sought court approval of the settlement agreement, the record shows that they ultimately concluded that it was not legally required after conferring with the trial court. On February 18, 2011, WSNA and Evergreen sought court approval of settlement, stating in a joint motion:
Shortly thereafter, the trial court questioned its authority to approve such a settlement. On March 4, 2011, the court entered a stipulation and agreed order of dismissal of WSNA's lawsuit. The order stated in part:
¶ 17 We agree that the trial court did in fact lack authority to approve the settlement. As Evergreen contends, this was not a class action, but a suit brought by the WSNA in its associational capacity, and therefore court approval of a settlement under CR 23(e) is not required. Indeed, both parties agreed in supplemental briefing to this court that class action rules relating to suits brought by an association do not apply here. CR 23.2 addresses suits brought by an association "as a class by naming certain members as representative parties" and provides that dismissals or compromise of such suits are governed by CR 23(e). As both parties correctly point out, WSNA's suit was not brought as a class
¶ 18 Pickett v. Holland America Line-Westours, Inc.,
¶ 19 Pugh further contends that even if the WSNA suit was not a class action, Evergreen still had a duty to obtain court approval for the settlement under CR 23(e) because it compromised the claims of the putative class in the class action case. Pugh argues that by failing to obtain court approval, Evergreen denied the RNs due process by providing insufficient notice of the settlement and depriving them an opportunity to be heard. But as Evergreen contends, the settlement did not in fact "compromise" the claims of the putative class members; it resolved only WSNA's claim and simply offered checks to and sought releases from those RNs who chose to settle their individual claims. Thus, none of the putative class members were bound by the settlement or released their individual claims unless they affirmatively chose to do so by accepting the check. The settlement simply bound the WSNA, Evergreen, and those nurses who opted to accept the individual settlement checks.
¶ 20 Moreover, the RNs were not denied due process rights to notice and opportunity to be heard. They were provided ample notice of the settlement terms, including the option not to accept the individual checks and release their claims. They were also well aware of the pending class action suit and that they had the choice to pursue their individual claims by joining that lawsuit. In fact, 19 of the RNs affirmatively refused to accept the settlement checks.
¶ 21 Evergreen further contends that the trial court erred by invalidating the settlement agreement on the basis that WSNA lacked standing to sue. As we conclude in our opinion in WSNA's appeal, WSNA did have standing.
¶ 22 Evergreen next challenges the trial court's ruling invalidating the individual settlements. Evergreen contends that the RNs' individual acceptances of the settlement checks and releases of their claims resulted in accord and satisfaction of the dispute between the RNs and Evergreen and are therefore valid. We agree.
¶ 23 The principle of accord and satisfaction recognizes a debtor and creditor's agreement to settle a claim by some performance different than that which is claimed due; once the creditor accepts the substituted performance, it amounts to full satisfaction of the claim.
¶ 24 The trial court did not appear to quarrel with this argument, but instead invalidated the individual settlements based on WSNA's lack of standing to sue:
As noted above, and as we held in our opinion in WSNA's appeal, the trial court erred by concluding that WSNA lacked standing. Thus, the court's ruling invalidating the individual settlements for lack of standing is without basis and therefore error.
¶ 25 Pugh also contends that the individual releases were invalid because they amounted to an illegal kickback of wages under RCW 49.52.050. Under RCW 49.52.050 it is a crime when an employer who "[w]illfully and with intent to deprive the employee of any part of his or her wages, shall pay any employee a lower wage than the wage such employer is obligated to pay such employee by any statute, ordinance, or contract." An agreement between an employer and employee that the employee will accept less than the amount owed under contract or law is void against public policy as an illegal rebate of wages.
¶ 26 The trial court reserved ruling on this argument, concluding that it was an issue of fact for the jury:
Evergreen contends that the evidence established a bona fide dispute over the amount of wages owed for the missed breaks. Evergreen notes that it disputed how many rest breaks were missed, if any, and offered a settlement to each RN based on the total number of hours worked by those RNs.
¶ 27 Evergreen cites a Fifth Circuit case, Martin v. Spring Break '83 Productions, LLC, where a release was held to be enforceable in a wage dispute case even though the employee accepted less than the amount claimed.
¶ 28 Pugh further contends for the first time on appeal that the individual releases were invalid because they were obtained by overreaching, fraud, and misrepresentation. A party seeking to avoid a release based on overreaching, fraud, or misrepresentation must produce clear and convincing evidence.
¶ 29 The trial court's rulings that the settlement agreement and individual settlements are invalid are without basis. Thus, the trial court erred by granting summary judgment for Pugh. Accordingly, we reverse and remand for the trial court to reinstate the settlement agreement between WSNA and Evergreen and the individual settlements by RNs who chose to accept the settlement checks.
¶ 30 Evergreen next challenges the order granting class certification, contending that Pugh failed to establish commonality of claims and the class representatives did not adequately represent the class. This court reviews an order of class certification for an abuse of discretion.
¶ 31 Given our reversal of the trial court's ruling on summary judgment and reinstatement of the settlement of the WSNA lawsuit, it is unclear what remains of Pugh's lawsuit. Thus, determining whether the class certification requirements of numerosity, commonality, typicality, and adequacy of representation have been satisfied would be speculative, if not difficult to determine at all, at this point. Accordingly, we remand to the trial court to reevaluate its class certification ruling in light of our order that the WSNA settlement agreement is valid and binding.
¶ 32 We reverse and remand.
WE CONCUR: SPEARMAN, A.C.J., and BECKER, J.