The California Court of Appeal recently affi rmed an employer’s right to settle a putative class member’s disputed wage claims individually, without the consent or involvement of class counsel. In Chindarah v. Pick-Up Stix, the appellate court affirmed the trial court’s order that enforced the settlement and release agreements signed by more than 200 putative class members (many of whom later joined the lawsuit as named plaintiffs) and granted summary judgment for the company on those plaintiffs’ wage claims.


Factual Background

In July 2003, two former Pick-Up Stix employees amended their individual complaint to allege a putative class action against their former employer. Through the amended complaint, the plaintiffs alleged Pick-Up Stix misclassified its current and former general managers, assistant managers, and lead cooks as exempt employees. After a failed mediation, Stix began settling the misclassification claims with as many individual putative class members as possible. Stix offered the individual putative class members an amount based upon a figure Stix previously offered in mediation. More than 200 former and current employees accepted the offer and signed a settlement agreement that contained a general release.

The settlement agreement also required that the signing employee acknowledge that he or she had spent more than 50% of his or her time performing managerial duties, released Stix from all claims for unpaid overtime and any other California Labor Code violations during the putative class period, and agreed “not to participate in any class action that may include ... any of the released Claims.”

In response, the original plaintiffs filed a second amended complaint that alleged the settlement agreements violated numerous provisions of the Labor Code. Through the amended complaint, eight current and former Stix employees who had signed the settlement agreements joined the putative class action as named plaintiffs. Stix filed a cross-complaint against the new plaintiffs that alleged breach of contract and breach of the settlement agreements, and sought declaratory relief.



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