Litigating California Wage & Hour and Labor Code Class Actions

inquiry is on whether the parties conducted sufficient discovery to evaluate the
claims themselves—something even the plaintiffs in the 7-Eleven case agreed
the defendants had done. In such circumstances, the court should not
disapprove a settlement based on a hypothetical or speculative measure of what
might have been achieved by the negotiators.’” 491
Furthermore, where relatively few class members object, that factor weighs against
sustaining the objection. 492
Objectors have better success in their objections when they identify procedural defects in
the settlement process. For example, objections have been sustained when the class
notice was excessively vague and confusing, or when class counsel failed to undertake
sufficient discovery to properly evaluate the case. 493 In short, the odds of a successful
objection are low if the parties conduct an adequate investigation, make the notice
documents clear, set forth some rational basis for the settlement amount, and take
adequate steps that class members are informed in their choices.
F. Individual Settlements with Putative Class Members
Class actions differ from individual actions in that most of the parties on whose behalf the
action allegedly is advanced have no involvement in the case (and may be totally unaware
of the case) until a court orders certification and notice. This aspect of class litigation has
raised the question of whether employers should be entitled to communicate with putative
class members before certification or whether they should be treated in the same manner
as the named plaintiff, in which case the employer’s right to communicate with the
employees would be severely restricted. 494
It has been established law for more than twenty years that putative class members are not
treated the same as parties and that there is no attorney-client relationship between a
491
492
493
494
Id. at 1149-50; but see Kullar v. Foot Locker Retail, Inc., 168 Cal. App. 4th 116, 129 (2008) (parties are not excused
from explaining what the claims potentially were worth and why less money was accepted: “While an agreement
reached under these circumstances presumably will be fair to all concerned, particularly when few of the affected class
members express objections, in the final analysis it is the court that bears the responsibility to ensure that the recovery
represents a reasonable compromise, given the magnitude and apparent merit of the claims being released, discounted
by the risks and expenses of attempting to establish and collect on those claims by pursuing the litigation.”).
Id. at 1152-53 (out of a class of 5454 people, only nine objected and only 80 opted out).
Cho v. Seagate Technology Holdings, Inc., 177 Cal. App. 4th 734, 747-48 (2009) (settlement disapproved without
prejudice to issuance of new class notice where original notice was confusing as to who qualified as a class member);
Kullar v. Foot Locker Retail, Inc., 168 Cal. App. 4th 116, 132-33 (2008) (case remanded for parties to better explain
what information the parties considered in reaching settlement, and to allow objector limited discovery relevant to
valuation of case).
See generally Cal. Rule of Professional Conduct 2-100.
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