Chindarah v. Pick Up Stix, Inc., 171 Cal. App. 4th 706 (2009)

Two former employees of Pick Up Stix (a restaurant) filed a complaint seeking unpaid overtime, penalties and interest due to the misclassification of their jobs as exempt from the overtime pay requirements of state law. The putative class included current and former general managers, assistant managers and lead cooks employed during the four years preceding the filing of the complaint. After the employer’s attempt to settle the lawsuit through mediation failed, it settled directly with as many putative class members as possible, offering each of them an amount based upon a figure that had been offered during the unsuccessful mediation. Those who settled were required to sign a release of claims and agreement not to participate in any class action involving such claims. Eight current and former employees who had signed the settlement agreements joined the putative class action, alleging that Labor Code §§ 206 and 206.5 prohibited the release of a claim for unpaid wages. The trial court disagreed and granted the employer’s motion for summary judgment on the ground that there was a bona fide dispute over whether any wages were owed and thus the Labor Code provisions did not void the releases. The Court of Appeal affirmed the judgment. See also Watkins v. Wachovia Corp., 2009 WL 1019560 (Cal. Ct. App. 2009) (employees who had released their claims could not pursue class action seeking allegedly unpaid overtime from employer); cf. Safeco Ins. Co. of Am. v. Superior Court, 2009 WL 1153433 (Cal. Ct. App. 2009) (class representative who is not a member of the class she purports to represent may obtain precertification discovery for the purpose of finding a new class representative).