McGrath v. Wyndham Resort Development Corporation, 3:15-cv-01631

Plaintiffs McGrath and O’Boy (former Wyndham commissioned sales representatives) brought wage-and-hour class claims under California law challenging Wyndham’s commission/draw pay practices for workweeks from June 16, 2011 through July 11, 2017.
Wyndham paid a minimum-wage "draw" when commissions were insufficient and reclaimed draw amounts from subsequent commissions; dispute focused on whether time spent on non-sales duties entitled reps to additional compensation.
Two related class actions (McGrath and O’Boy) were consolidated; parties litigated discovery, summary judgment and class-certification briefing and engaged in mediation.
Parties negotiated a non-reversionary $7,250,000 settlement fund; after fees, enhancements, costs and administration, the Net Settlement Amount would be distributed pro rata by workweeks to ~2,077 class members.
Notice was mailed to 2,083 class members; zero objections and six opt-outs were timely received.
The court held a fairness hearing and denied no-opposition motions, ultimately granting final approval, awarding fees, costs, service payments, and entering final judgment while retaining jurisdiction for administration and enforcement.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether settlement-class certification is proper for settlement purposes	Class-wide common policies (compensation/reimbursement) predominate; class is numerous, common, typical, and representatives are adequate	Not opposed to settlement-class certification	Class certified for settlement purposes: Rule 23(a) and 23(b)(3) requirements met
Whether the settlement is fair, reasonable, and adequate under Rule 23(e)	Settlement provides immediate, substantial recovery (avg ~$2,300) and mitigates litigation and appellate risks; negotiations were arms-length	No opposition; parties negotiated in good faith	Final approval granted; settlement found fair, reasonable, adequate and free from collusion
Whether requested attorneys’ fees (33.33% of gross fund) are reasonable	1/3 is standard in California; risks, results, contingency, and comparable awards support upward adjustment from 25% benchmark	Wyndham did not oppose fee request	Court awarded one-third of the Gross Settlement Amount as fees; found request reasonable under California and Ninth Circuit frameworks
Whether service payments, costs, and administration fees are reasonable	Requested incentive payments ($10,000 and $7,500), $10,575.13 in litigation costs, and ~$27,927 for administration are reasonable and within settlement caps	No opposition	Court approved the requested incentive payments, costs, and settlement administration expenses

Officers for Justice v. Civil Serv. Comm’n, 688 F.2d 615 (9th Cir. 1982) (factors for evaluating class-action settlements)
Amchem Prods., Inc. v. Windsor, 521 U.S. 591 (U.S. 1997) (heightened scrutiny for settlement-only class certification)
Hanlon v. Chrysler Corp., 150 F.3d 1011 (9th Cir. 1998) (standards for Rule 23 class certification and settlement approval)
Laffitte v. Robert Half Intern. Inc., 1 Cal.5th 480 (Cal. 2016) (California approval of one-third fee in wage-and-hour class settlement)
In re Bluetooth Headset Prod. Liab. Litig., 654 F.3d 935 (9th Cir. 2011) (courts must independently assess reasonableness of fees in class settlements)
Paul, Johnson, Alston & Hunt v. Graulty, 886 F.2d 268 (9th Cir. 1989) (25% benchmark for percentage-of-recovery attorney fees)
Vizcaino v. Microsoft Corp., 290 F.3d 1043 (9th Cir. 2002) (factors for adjusting percentage benchmark and lodestar cross-check)
Staton v. Boeing Co., 327 F.3d 938 (9th Cir. 2003) (consideration of injunctive relief value when awarding fees)