Unreported / Non-Citable
Background
Crystal Mitchell sued United Health Centers of the San Joaquin Valley (UHSJ) in January 2022 under California wage-and-hour law. The class theory at issue alleges that UHSJ paid redeemed paid time off at the base hourly rate without including bonuses earned under its FN0040 Bonus Policy, and so did not pay all wages owed to former employees at separation. These are allegations; UHSJ's liability has not been adjudicated.
After a December 2024 motion, the court certified an Underpaid PTO Class and a Former Employee Sub-Class. Related Fresno County state cases were mediated alongside this one, but in April 2026 the court denied a stipulation to add those plaintiffs and claims through a second amended complaint. Plaintiff moved for preliminary approval in August 2026, and UHSJ does not oppose.
The settlement creates a $500,000 gross fund for about 1,109 class members covering July 17, 2018 through December 31, 2025. Proposed deductions are up to $166,666.67 in fees, $15,000 in costs, $18,000 in administration and a $7,500 service payment, leaving roughly $292,833 net, about $264 per member on average. Nothing reverts to UHSJ. Participants release only miscalculated-redeemed-sick-leave and related waiting-time claims, not the claims in the state cases.
The Court’s Holding
The court granted the motion and conditionally certified the settlement class. It found numerosity met with 1,109 members, commonality and typicality met because the claims arise from one uniform base-rate pay practice, and adequacy met because Plaintiff has no identified conflicts and counsel is experienced. It found predominance and superiority satisfied, noting small individual recoveries, the opt-out right, and Plaintiff's representation that the state cases do not assert the underpaid sick-leave theory.
Applying Rule 23(e) and the Churchill factors, the court found the settlement fair enough for preliminary approval. The fund is 30.8% of a claimed maximum exposure of $1,623,603, and Plaintiff's risk-discounted estimate of $463,032 puts it at 55.8% of realistic exposure, against defenses that the bonuses are discretionary and that any failure was not willful. Class reaction is unknown at this stage. On the Bluetooth factors, the court acknowledged that the 33% fee request is higher than typical and that a clear-sailing provision exists, but found no reverter and deemed the fee within a reasonable range for now. It also accepted the $7,500 service payment, 1.5% of the fund, based on about 100 hours of effort.
The court conditionally appointed Plaintiff and her counsel, approved ILYM Group, Inc. as administrator and the notice, and set a final approval hearing for February 12, 2027. Fees, costs and the service award remain subject to final approval. The order lists January 22, 2026 as the filing deadline for the final approval motion and administrator report, a date before the order itself, apparently a typographical error.
Key Takeaways
- This is preliminary approval only; no final judgment or binding release takes effect until after notice, opt-out and objection rights, and a fairness hearing.
- Rule 23(a) and (b)(3) were found satisfied for settlement purposes based on a uniform base-rate pay practice.
- The court treated 30.8% of maximum exposure and 55.8% of risk-adjusted exposure as reasonable, relying on Plaintiff's estimates.
- A 33% fee request with a clear-sailing clause passed preliminary review because there is no reverter, but final scrutiny remains.
Why It Matters
As an unpublished district court order on preliminary approval, it has no precedential weight and does not decide whether bonuses must be included in the regular rate for redeemed sick pay. Its value lies in showing how an Eastern District court weighs a fee request above the 25% benchmark and a clear-sailing clause at the first approval stage.
Open questions include class reaction, objections, and final approval of fees, costs and the service award, which the court may reduce or revisit at the final hearing.