United States District Court, E.D. Pennsylvania
PAMELA MYERS ET AL.
JANI-KING OF PHILADELPHIA, INC. ET AL.
BARCLAY SURRICK, J.
before the Court are Plaintiffs' Unopposed Motion for
Final Class Action Settlement Approval (ECF No. 159), and
Plaintiffs' Unopposed Request for Incentive, Fee, and
Expense Awards (ECF No.158). For the following reasons,
Plaintiffs' Motion and Request will be granted.
class action, Plaintiffs Darryl Williams and Howard Brooks
pursue claims on behalf of themselves and others similarly
situated against Defendants Jani-King of Philadelphia, Inc.;
Jani-King, Inc.; and Jani-King International, Inc.
(collectively “Jani-King”). Plaintiffs performed
cleaning services in Pennsylvania under Jani-King's
janitorial franchise system. Plaintiffs allege that Jani-King
misclassified them as independent contractors as opposed to
employees and, by doing so, took improper deductions from
their wages in violation of Pennsylvania's Wage Payment
and Collection Law (“WPCL”), 43 Pa. Stat. Ann.
§ 260.1 et seq.
March 11, 2015, the Court certified a state-law class on
Plaintiffs' WPCL claims. Myers v. Jani-King of
Phila., Inc., No. 09-1738, 2015 WL 1055700, at *10 (E.D.
Pa. Mar. 11, 2015), aff'd sub nom. Williams v.
Jani-King of Phila. Inc., 837 F.3d 314 (3d Cir.
2016). The Court certified the following class:
“all individuals who signed contracts with [Jani-King],
and performed cleaning services in Pennsylvania pursuant to
such contract at any time from March 20, 2006 to
present.” (Order, ECF No. 88.) There are approximately
290 class members.
filed a petition with the Third Circuit Court of Appeals
pursuant to Rule 23(f) of the Federal Rules of Civil
Procedure, seeking to appeal this Court's class
certification. (ECF Nos. 93-95.) The Third Circuit granted
the Petition and permitted the appeal. (ECF No. 97.) The
matter was stayed pending the outcome of the appeal. (ECF No.
101.) On September 21, 2016, the Third Circuit affirmed the
Court's grant of class certification on September 21,
2016. (ECF No. 103.) Trial was scheduled to take place on
March 29, 2019. (ECF No. 112.) Just weeks before trial, the
parties entered into settlement negotiations with the
assistance of a mediator. (ECF No. 155.) The negotiations
resulted in a Class Action Settlement Agreement and Release
(the “Settlement Agreement”), which was executed
in April 2019. (Settlement Agreement, Stmt. Mot. Ex. A.)
10, 2019, the Court preliminarily approved the Settlement
Agreement. Myers v. Jani-King of Philadelphia, Inc.,
No. 09-1738, 2019 WL 2077719, at *1 (E.D. Pa. May 10, 2019).
Specifically, we determined that the Settlement Agreement
“does not raise any doubts as to fairness or otherwise
reveal any deficiencies.” Id. at 3.
Notice Period and Class Participation
to the Settlement Agreement, on May 20, 2019, Plaintiffs'
settlement administrator mailed the Court-approved class
notice and claim form to the last-known addresses for all
individuals who purchased Jani-King franchises from any
Jani-King Defendant and performed cleaning services in
Pennsylvania pursuant to such contract at any time since
March 2006. (Settlement Agreement ¶ 28.) Notice was
mailed to approximately 288 class members. (Liss-Riordan
Decl. ¶ 5, ECF No. 159-2.) Of these individuals, only 23
settlement class members were unable to be located. This
means that class counsel was able to reach approximately 92%
of the possible class members. Of those reached,
approximately 109 class members filed claims after receiving
notice of the Settlement Agreement. Class counsel received no
objections to the proposed settlement. Five class members
have requested to opt out of the settlement. These exclusions
represent only 1.7% of the settlement class.
Fairness Hearing was held on August 20, 2019. (See
Min. Entry, ECF No. 120.) The parties now seek the
Court's final approval of the Settlement Agreement.
The Settlement Agreement
the proposed Settlement Agreement, Defendants will pay a
total of $3, 700, 000 to a non-reversionary settlement fund.
(Settlement Agmt. ¶¶ 7, 18.) Reductions from
this fund include amounts for attorneys' fees, expenses,
and service awards. Specifically, Plaintiffs' counsel has
requested $1, 233, 333.33 in attorneys' fees, $30, 000 in
service awards to the Named Plaintiffs, and $16, 757.37 in
costs. (Stmt. Mem. 1 n.3.) After these reductions, $2, 419, 909.30
will remain in the settlement fund. This amount will be
distributed to the 109 class members who have returned
settlement claim forms. Pursuant to the Settlement Agreement,
Plaintiffs' counsel will continue to accept late claims
until 90 days before the final distribution. Counsel has
indicated that Defendants intend to make the final
distribution payment on September 1, 2020. Accordingly, late
claims will be accepted up until approximately June 1, 2020.
The average individual payout is anticipated to be
approximately $10, 872.00.
agrees to pay the total settlement amount in two installments
of $1, 850, 000, the first of which is to be paid 60 days
after the Court grants final approval of the settlement.
Jani-King agrees to pay the second installment on September
1, 2020. Class members who have submitted claim forms and
executed updated franchise agreements by the time the first
payment is made will receive their first installment payment
from the settlement fund shortly after Jani-King makes the
first payment, estimated to be in the Fall of 2019. (Stmt.
Mem. 2.) Class members will receive a second payment shortly
after Jani-King pays the second installment of the settlement
will be calculated by taking the Qualifying Fees paid by a
Claimant during the class period and dividing by the total
Qualifying Fees paid by all Claimants during the class
period. (Settlement Agreement ¶¶ 11, 33.) Claimants
are class members who have filed claims. “Qualifying
Fees” include initial franchise fees, fees for
additional business, and insurance fees paid by a Claimant
during the class period. (Settlement Agreement ¶ 11.)
Distribution of settlement proceeds will be the
responsibility of class counsel. Payments to each Claimant
will be based on the franchise fees, franchise note payments,
and insurance payments that they have made since 2006. This
distribution formula has been approved by at least two other
district courts handling similar class actions against
Jani-King. See De Giovanni v. Jani-King, No.
07-10066 (D. Mass.); Fuller v. Jani-King, No.
15-00438 (D. R.I.).
addition to making payments, Jani-King has also agreed to
make changes to its business practices. Franchisees who
settle with Jani-King and wish to continue to do business
with them will be offered a new franchise agreement. The aim
of the new franchise agreement is to eliminate various
controls that Jani-King has had over the franchisees.
(Settlement Agreement ¶ 20.) For example, the new
franchise agreement does not contain provisions for
post-termination non-competition agreements. (Id.)
It also shortens the non-solicitation period with respect to
Jani-King accounts to 12 months. (Id.) In addition,
franchisees may sign new business that they generate without
paying finder's fees to Jani-King. (Id.)
Jani-King also agrees to “work to transition its
business to franchisees that manage multiple larger accounts
and employ their own workers.” (Id. ¶
addition to settlement payments, Jani-King also agrees to
make buyout payments to franchisees with monthly revenues of
less than $5, 000 per month, at the franchisees' option.
(Id. at ¶¶ 20-21.) As part of the buyout,
Jani-King purchases the class members' existing servicing
contracts (and terminates their franchise) at a rate of two
times the gross monthly revenue of their existing accounts.
(Id.) The buy-out payment to those who qualify will
be paid in addition to the damage payments under the
settlement. These additional buyout payments could be worth
as much as $10, 000 in additional consideration.
(Id.) To date, approximately 20 class members have
opted for a buyout payment. Class members that chose a buyout
may continue to perform work for other Jani-King franchises
that retain their accounts.
Settlement Agreement also provides for a total of $30, 000 in
incentive payments to the Named Plaintiffs Darryl Williams,
Howard Brooks, and Pamela Myers ($10, 000 each). (Settlement
Agreement ¶ 24.) Finally, the Settlement Agreement
provides for attorneys' fees in the amount of one-third
of the settlement fund, or $1, 233, 333.33. (Id. at
consideration of the proposed settlement will include the
following: (1) whether the proposed WPCL class action meets
the requirements of Rule 23 of the Federal Rules of Civil
Procedure and is entitled to final certification; (2) whether
the settlement proposed by the parties is fair and adequate;
(3) whether the service payment awards to the Named
Plaintiffs are fair and reasonable; and (4) whether
Plaintiffs' request for attorneys' fees and costs
Class Certification of WPCL Class Under Rule 23
determining whether the proposed settlement warrants
approval, we must first determine whether Plaintiffs have met
the elements of final certification of the WPCL class. We
previously granted preliminary certification to the WPCL
class to include “all individuals who signed contracts
with Jani-King of Philadelphia, Inc.; Jani-King, Inc.; or
Jani-King International, Inc., and performed cleaning
services in Pennsylvania pursuant to such a contract at any
time from March 20, 2006 until the present.” Myers
v. Jani-King of Philadelphia, Inc., No. 09-1738, 2015 WL
1055700, at *16 (E.D. Pa. Mar. 11, 2015), aff'd sub
nom. Williams v. Jani-King of Philadelphia Inc., 837
F.3d 314 (3d Cir. 2016); (Order, ECF No. 88.)
certification under Rule 23 has two components. The party
seeking class certification must first establish the four
requirements of Rule 23(a):
(1) the class is so numerous that joinder of all members is
(2) there are questions of law or fact common to the class;
(3) the claims or defenses of the representative parties are
typical of the claims or defenses of the class; and
(4) the representative parties will fairly and adequately
protect the interests of the class.
Fed. R. Civ. P. 23(a); see also In re Hydrogen Peroxide
Antitrust Litig., 552 F.3d 305, 309 n.6 (3d Cir. 2008).
all four requirements of Rule 23(a) are met, a class of one
of three types (each with additional requirements) may be
certified” under Rule 23(b). In re Hydrogen
Peroxide Antitrust Litig., 552 F.3d at 309 n.6.
Plaintiffs seek certification under Rule 23(b)(3), which
states that “[a] class action may be maintained if Rule
23(a) is satisfied and if: (3) the court finds that the
questions of law or fact common to class members predominate
over any questions affecting only individual members, and
that a class action is superior to other available methods
for fairly and efficiently adjudicating the
controversy.” Fed.R.Civ.P. 23(b)(3). These are known as
the predominance and superiority factors of Rule 23(b)(3).
party seeking class certification “bears the burden of
establishing each element of Rule 23 by a preponderance of
the evidence.” Marcus v. BMW of N. Am., LLC,
687 F.3d 583, 591 (3d Cir. 2012). Certification is only
proper “if the trial court is satisfied, after a
rigorous analysis, that the prerequisites of Rule 23 are
met.” In re Hydrogen Peroxide Antitrust
Litig., 552 F.3d at 309 (footnote and quotation marks
granted preliminary certification of this class, we provided
an extensive analysis of the Rule 23 factors that govern
certification. Myers, 2015 WL 1055700, at *5-15. Our
grant of class certification was affirmed by the Third
Circuit. See Williams, 837 F.3d at 325. As class
counsel point out, the proposed settlement class is
“coextensive with the class this Court has already
certified.” (Stmt. Mem. 16.) Based upon this, final
certification of ...