Clark v. American Residential Services LLC

SUMMARY

Derain Clark and Maxine Gaines filed a class action lawsuit against American Residential Services LLC (ARS), a purveyor of plumbing and related services, seeking damages and penalties for allegedly unpaid minimum and overtime wages, failure to provide meal and rest periods, and other Labor Code violations and unfair business practices. Eighteen months later, after a one-day mediation before a respected mediator, the parties agreed to settle the matter for $2 million, out of which Clark and Gaines would receive $25,000 each, and the other 2,360 class members would receive an average payment of $561.44. Notice of the proposed settlement elicited objections from 20 putative class members, who alleged that they worked at least two hours of unpaid overtime every workday, that they would be compensated for only about 1 percent of the total value of their claims, and that no evidence was presented to the court to justify the settlement. After a hearing, the trial court gave final approval to the settlement. Objectors appealed.

We conclude the order approving the settlement must be vacated because the trial court lacked sufficient information to make an informed…