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CorePower Yoga LLC agreed to pay $1.65 million to settle claims it didn’t meet its minimum wage obligation when it paid students who cleaned studios with free or discounted memberships, according to a proposed settlement filed Dec. 28 in a federal court in California ( Walsh v. CorePower Yoga LLC , N.D. Cal., No. 3:16-cv-05610, motion for preliminary settlement approval 12/28/16 ).
About 11,700 students would share an estimated $993,183, and about $656,817 would go toward expenses such as litigation costs, state penalties and attorneys’ fees.
The precise number of students won’t be known until later in the settlement approval process because there’s overlap between a subclass of yogis who received free memberships and a subclass who got discounts.
It’s “unusual” for a company to provide compensation in the form of a markdown on its services, said Jason Barsanti, a member of Cozen O’Connor’s San Diego office who litigates wage-and-hour cases and counsels employers on compliance.
“As far as I know, there’s no provision that allows you to make up your minimum wage obligation by in-kind payment. If they’re an employee, then they have to be paid minimum wage in money,” Barsanti told Bloomberg BNA when the lawsuit was filed in October in the U.S. District Court for the Northern District of California.
Student William Walsh, who seeks to represent the class of students, said they received free memberships and no wages in exchange for cleaning under CorePower’s Yoga for Trade program. The company replaced that arrangement with the Studio Experience Team program, under which it paid $9 per 90-minute shift, he said in the complaint.
CorePower required the students who participated in the Studio Experience Team program to purchase memberships, though at a discount, Walsh said. The mandatory withholding pushed students’ pay below minimum wage, he said.
Walsh asked Magistrate Judge Maria-Elena James to order notices of the proposed settlement to be sent to potential class members, who would be identified from CorePower’s records. Those contacted would have an opportunity to join the lawsuit, opt out or raise concerns before the court issues a final decision on whether to approve the settlement.
CorePower doesn’t oppose the motion, Walsh said. His attorneys said in a filing they consider the settlement to be in the students’ best interest based on circumstances such as the delay that further litigation would mean. Walsh asked that a hearing to consider preliminary approval of the settlement be held Feb. 2.
Outten & Golden LLP attorneys Juno Turner in New York and Jahan Sagafi and Katrina Eiland in San Francisco represent the students.
An attorney hasn’t entered an appearance for the company. Heather Holland, CorePower’s general counsel, signed the settlement agreement on the company’s behalf.
Representatives for the students and CorePower declined to comment Dec. 29.
To contact the reporter on this story: Jon Steingart in Washington at email@example.com
The motion is available at http://www.bloomberglaw.com/public/document/Walsh_v_CorePower_Yoga_LLC_Docket_No_316cv05610_ND_Cal_Oct_03_201/2.
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