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Jan. 16 — A federal judge Jan. 14 granted preliminary approval of a $1 million gross settlement between PetSmart Inc. and a class of 1,100 former employees in California who alleged they unlawfully received their final compensation on a “paycard kit” instead of through check or direct deposit.
The employees claimed in a June 2013 second amended complaint that they were charged fees by financial institutions when they used the cards, which operated like ATM cards, and also couldn't access the entire amount on the cards. They argued that PetSmart's use of the paycards violated the California Labor Code, which requires full payment of wages owed at the time of an employee's separation, whether voluntarily or involuntary.
The U.S. District Court for the Central District of California in June 2014 partially granted the employees' motion for class certification.
According to the Jan. 12 motion for preliminary approval filed by class representative Cassandra Pace, approximately $570,000 of the settlement fund would be distributed to class members after taking into account claims administration costs, attorneys' fees and other expenses. The class would include all former employees who worked at California PetSmart stores from February 20, 2010, through the present.
Preliminarily approving Pace's motion, Judge David O. Carter wrote that the settlement appears “on its face to be fair, reasonable, and adequate,” and to have been “the product of serious, informed, and extensive arm's-length negotiations” between the parties.
“In making this preliminary finding, the Court considered the nature of the claims, the relative strength of Plaintiff’s claims, the amounts and kinds of benefits paid in settlement, the allocation of settlement proceeds among the class members, and the fact that a settlement represents a compromise of the Parties’ respective positions rather than the result of a finding of liability at trial,” Carter wrote.
A final approval and fairness hearing is scheduled for May 4.
A PetSmart spokeswoman Jan. 16 told Bloomberg BNA that the company, as a practice, doesn't comment on litigation. Meanwhile, class counsel didn't immediately respond to a request for comment.
Hyun Legal and Diversity Law Group represented the employees. Littler Mendelson represented PetSmart.
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Text of the order is available at http://www.bloomberglaw.com/public/document/Cassandra_Pace_v_PetSmart_Inc_et_al_Docket_No_813cv00500_CD_Cal_M.
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