Dive Brief:
- A proposed settlement in a class-action case between Marriott International and about 375 workers at a California hotel (Rivera v. Marriott International, Inc.) was denied by the U.S. District Court for the Central District of California Thursday over potential collusion, according to court filings. The court characterized the parties’ handling of class claims as “questionable.”
- At issue was the plaintiff’s history in defining the case as a class-action lawsuit. In April 2019, the plaintiff filed a putative class-action case, arguing Marriott didn’t pay all wages or provide meal breaks or rest periods, among other allegations. The case was moved to federal court, and in October 2021, the plaintiff requested to drop the class allegations and proceed with an individual case. In January 2022, with the help of a mediator, the parties agreed to a settlement but, in March 2022, requested the case be remanded to state court for approval of the settlement, which was denied. In April 2022, the plaintiff sought approval of a class-action settlement agreement with Marriott, but the court denied it because the class-action claims had been removed from the case. The plaintiff requested that the class-action allegations be reinstated in November 2022 and reapplied for preliminary approval of a class-action settlement in December 2022.
- The court said the parties haven’t explained why they tried to settle class claims while there wasn’t a class-action lawsuit, why they wanted to reinstate the case as a class-action lawsuit to reach a settlement or why they wanted to move the case back to state court to handle the settlement. “These contradictory actions by the parties are indicative of collusion. Absent any explanation, the court is not satisfied that the settlement was the product of ‘serious, informed, non-collusive negotiations,’” the court said.
Dive Insight:
Although uncommon, a judge can deny a potential settlement agreement for a number of reasons, such as if the settlement doesn’t seem fair, provide enough compensation or offer corrections to alleged wrongdoing.
In April 2019, a California judge rejected a $7.5 million settlement between three groups — O.C. Communications Inc., Comcast Corp. and Comcast Cable Communications Management, LLC — and a group of technicians who had alleged wage and hour violations because the agreement didn’t address what the court saw as “systemic” problems that could happen again.
In the proposed Marriott settlement, the court also raised concerns about how money sought in the settlement would be divided and how the class members would be notified of their rights and options.
