United Airlines has opted to settle rather than risk litigating flight attendants’ allegations of unlawful payroll procedures. See Takagi v. United Airlines, Inc., No. 11-09191 (C.D. Cal. filed Nov. 4, 2011). Under the terms of the settlement, which must receive judicial approval, over 4,000 flight attendants will be eligible for payments from a $925,000 settlement fund. The preliminary approval papers are available here.
The plaintiffs alleged that United violated two distinct California Labor Code statutes, the first concerning the timeliness of payments (Cal. Lab. Code § 204) and the second governing the information that must appear on employees’ pay stubs (Cal. Lab. Code § 226). The parties’ settlement, which resulted from an August 2012 mediation, provides for attorneys’ fees amounting to a standard one-third of the total common fund negotiated by plaintiffs’ counsel.
Though modest, the Takagi settlement gives the plaintiffs’ bar reason to be optimistic. The California wage statement statute, Cal. Lab. Code § 226, was amended effective January 1, 2013, so as to resolve an ambiguity that had precluded the certification of some wage statement cases. As such, United’s willingness to settle is an early indication that the amended statute is functioning as intended, as United would have faced exposure considerably greater than the settlement amount had the plaintiffs successfully moved for class certification. Additionally, despite having been removed to federal court under the Class Action Fairness Act (CAFA), the case nonetheless endured and yielded a settlement, despite the widespread view that both certification and settlement are more difficult in federal court.