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-1- DECLARATION OF RONALD H. BAE IN SUPPORT OF PLAINTIFFS MOTION FOR FINAL APPROVAL OF CLASS ACTION SETTLEMENT 3:15-CV-00036-TEH 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 AEQUITAS LEGAL GROUP A Professional Law Corporation 1156 E. Green Street, Suite 200 Pasadena, California 91106 Ronald H. Bae (SBN 186826) [email protected] Olivia D. Scharrer (SBN 291470) [email protected] AEQUITAS LEGAL GROUP A Professional Law Corporation 1156 E. Green Street, Suite 200 Pasadena, California 91106 Telephone: (213) 674-6080 Facsimile: (213) 674-6081 Attorneys for Plaintiff NAMARAJ KHATRI UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA SAN FRANCISCO DIVISION NAMARAJ KHATRI, individually, and on behalf of other members of the general public similarly situated, Plaintiff, vs. INTERCONTINENTAL HOTELS GROUP RESOURCES, INC., a Delaware corporation; IHC OF SAN FRANCISCO, INC., a Delaware corporation; and IHG MANAGEMENT (MARYLAND), LLC, a Maryland limited liability company, Defendants. Case Number: 3:15-cv-00036-THE [The Honorable Thelton E. Henderson] DECLARATION OF RONALD H. BAE IN SUPPORT OF PLAINTIFF’S MOTION FOR FINAL APPROVAL OF CLASS ACTION SETTLEMENT Hearing Date: April 3, 2017 Time: 10:00 a.m. Location: Courtroom 2 [Filed concurrently with Motion for Final Approval of Class Action Settlement; and Proposed Order] [Complaint filed: November 26, 2014] Case 3:15-cv-00036-TEH Document 47-1 Filed 02/17/17 Page 1 of 52

Transcript of 1 Ronald H. Bae (SBN 186826) - Good Jobs First

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-1- DECLARATION OF RONALD H. BAE IN SUPPORT OF PLAINTIFF’S MOTION FOR FINAL APPROVAL

OF CLASS ACTION SETTLEMENT

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Ronald H. Bae (SBN 186826)

[email protected]

Olivia D. Scharrer (SBN 291470)

[email protected]

AEQUITAS LEGAL GROUP

A Professional Law Corporation

1156 E. Green Street, Suite 200

Pasadena, California 91106

Telephone: (213) 674-6080

Facsimile: (213) 674-6081

Attorneys for Plaintiff NAMARAJ KHATRI

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA – SAN FRANCISCO DIVISION

NAMARAJ KHATRI, individually, and on

behalf of other members of the general public

similarly situated,

Plaintiff,

vs.

INTERCONTINENTAL HOTELS GROUP

RESOURCES, INC., a Delaware corporation;

IHC OF SAN FRANCISCO, INC., a

Delaware corporation; and IHG

MANAGEMENT (MARYLAND), LLC, a

Maryland limited liability company,

Defendants.

Case Number: 3:15-cv-00036-THE

[The Honorable Thelton E. Henderson]

DECLARATION OF RONALD H. BAE IN

SUPPORT OF PLAINTIFF’S MOTION

FOR FINAL APPROVAL OF CLASS

ACTION SETTLEMENT

Hearing Date: April 3, 2017

Time: 10:00 a.m.

Location: Courtroom 2

[Filed concurrently with Motion for Final

Approval of Class Action Settlement; and

Proposed Order]

[Complaint filed: November 26, 2014]

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DECLARATION OF RONALD H. BAE

I, Ronald H. Bae, declare as follows:

1. I am an attorney at law duly licensed to practice before this Court. I am an attorney

with the law firm of Aequitas Legal Group, A Professional Law Corporation, counsel for Plaintiff

NAMARAJ KHATRI in this action. I have personal knowledge of the facts set forth in this

declaration and, if called as a witness, could and would testify competently to such facts under oath.

I make this declaration in support of Plaintiff’s Motion for Final Approval of Class Action

Settlement.

The Parties and the Allegations

2. Defendant INTERCONTINENTAL HOTELS GROUP RESOURCES, INC. is the

entity that manages the hotel known as the InterContinental San Francisco. Defendant IHC OF

SAN FRANCISCO, INC. is the entity that manages the hotel known as the InterContinental Mark

Hopkins. Defendant IHG MANAGEMENT (MARYLAND), LLC is the entity that manages the

hotel known as InterContinental Los Angeles Century City. These three entities will be referred to

collectively as “Defendants” in this declaration.

3. Plaintiff NAMARAJ KHATRI (“Plaintiff”) is a former non-exempt employee of

Defendant INTERCONTINENTAL HOTELS GROUP RESOURCES, INC. Plaintiff worked as

an hourly-paid server at the Luce Restaurant at the InterContinental San Francisco from

approximately December 22, 2012 to approximately September 19, 2013.

4. The operative First Amended Complaint (“FAC”) alleges that Defendants failed to

pay employees for time spent changing into and out of uniforms at the hotels and undergoing

security bag checks. The FAC includes a claim for waiting time penalties and a claim for failure to

provide legally compliant wage statements, both of which are derivative of the claim for unpaid

wages. The FAC defines the putative class as all non-exempt, hourly paid employees who worked

at the InterContinental San Francisco, InterContinental Mark Hopkins, or InterContinental Los

Angeles Century City at any time between November 26, 2010 and the date of preliminary

approval, who were required to wear uniforms and undergo security bag checks.

/ / /

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Relevant Litigation History

5. Plaintiff filed this case in San Francisco Superior Court on November 26, 2014. The

complaint alleged the following causes of action against Defendant INTERCONTINENTAL

HOTELS GROUP RESOURCES, INC.: (1) failure to pay overtime wages under California Labor

Code §§ 510, 1194, and 1198; (2) failure to provide compliant rest breaks under California Labor

Code § 226.7; (3) failure to pay waiting time penalties under California Labor Code §§ 201 – 203;

and (4) unfair competition under California Business & Professions Code § 17200, et seq. The

claim for unpaid overtime wages was based on three theories. First, Plaintiff alleged that

employees were owed wages for time spent changing into and out of uniform at the hotel. Second,

and relatedly, Plaintiff alleged that employees were owed wages for time spent undergoing security

bag checks. Finally, Plaintiff alleged that the value of free meals given to employees should have

been factored into their overtime rate. The rest break claim alleged that employees did not receive

compliant rest breaks due to a rest break policy that did not give effect to the “major fraction”

requirement under California law. The putative class was defined as all current and former non-

exempt employees who worked for Defendant in California at any time between November 26,

2010 and the date of class certification.

6. Defendant filed its answer to the complaint on January 2, 2015 and removed this

case to the Northern District of California on January 5, 2015.

7. The initial case management conference took place on April 6, 2015 and discovery

began the following day. A significant portion of Plaintiff’s discovery efforts focused on

determining the appropriate scope of the class. Plaintiff’s complaint defined the class as all non-

exempt California employees who worked for Defendant between November 26, 2010 and the date

of class certification. Soon after the complaint was filed, Defendant informed Plaintiff that the

class definition, as written, would encompass all of the non-exempt employees of 33 hotels

managed by Defendant during the relevant time period. The original class definition also arguably

could be interpreted to include employees of the hundreds of California hotels franchised under the

InterContinental Hotels Group (aka “IHG”) trade names during the relevant time period. Defendant

vigorously contended that the class definition was overbroad and improper insofar as (1) IHG did

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not own, operate or manage the franchised hotels, (2) the franchised hotels were independently

operated and managed by different franchisees, (3) there were many differences in working

conditions and employer identity among the managed hotels and franchised hotels, (4) employees at

many of the hotels did not change into their uniforms at the hotels or undergo security bag checks

and (5) there were other important factual and policy differences among the managed hotels.

8. Defendant suggested that the class should be limited to non-exempt employees of the

InterContinental San Francisco hotel, where Plaintiff worked. Plaintiff did not agree to do so

because there was not enough information for Plaintiff to evaluate whether and to what extent the

class definition should be narrowed. Plaintiff immediately began investigating this issue.

9. Between May 2015 and May 2016, Plaintiff gathered information and documents to

determine how to appropriately define the class. The information and documents obtained by

Plaintiff also pertained to class certification and merits issues and led to two causes of action being

withdrawn, as discussed herein.

10. In July 2015, Defendant provided two declarations in response to Plaintiff’s

discovery requests. These declarations played a key role in helping Plaintiff narrow the class

definition.

11. One declaration was from Jenny Tidwell, Vice President of Franchise Licensing and

Compliance for Holiday Hospitality Franchising LLC, the entity that franchises hotels under the

IHG trade name. Ms. Tidwell’s declaration provided detailed information about the franchised

hotels that enabled Plaintiff to exclude these hotels from the class definition. Among other things,

Ms. Tidwell indicated that Defendant did not have any business relationship of any kind with the

franchised hotels and did not exercise any control over the employment relationships (or the terms

and conditions of employment) between the licensees and the employees of the franchised hotels.

Ms. Tidwell’s declaration provided detailed facts to support these assertions. Her declaration also

indicated that Plaintiff worked for a managed hotel, not a franchised one. Based on this declaration,

Plaintiff agreed to exclude the franchised hotels from the class definition in July 2015.

12. The second declaration that Defendant provided was from David Schweitzer,

Defendant’s Director of Employee and Labor Relations. Mr. Schweitzer’s declaration identified the

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33 California hotels managed by Defendant and provided information about the relevant

employment policies and practices at these hotels. Mr. Schweitzer’s declaration indicated the

following, among other things: The 33 managed hotels included hotels from 7 different brands,

including InterContinental, Crowne Plaza, and Holiday Inn. Several brands, which were identified

in the declaration, did not require employees to wear uniforms other than logoed shirts. Only the 3

InterContinental hotels required employees to undergo regular security bag checks when exiting the

hotel, and the other hotels did not perform bag checks at all or performed them on a random, very

occasional basis. Eleven hotels offered free or reduced-cost meals to non-exempt employees.

These hotels included the 3 InterContinental hotels, 3 Crowne Plaza hotels, and 5 Holiday Inn

hotels. Based on Mr. Schweitzer’s declaration, Plaintiff agreed to exclude from the putative class

the hotels that did not require employees to wear formal uniforms and did not perform security bag

checks or offer free or reduced-cost meals.

13. By around the end of July 2015, the class definition had been narrowed to 11

managed hotels. The donning and doffing and security bag check subclass included the

InterContinental San Francisco, InterContinental Mark Hopkins, and the InterContinental Los

Angeles Century City hotels. The regular rate miscalculation subclass included the 3

InterContinental hotels plus the 3 Crowne Plaza and 5 Holiday Inn hotels that offered employees

free or reduced-cost meals. The rest break claim was still being investigated.

14. The rest break claim was based on the theory that Defendant’s rest break policy at

the hotel where Plaintiff worked only provided for one rest break per 4 hours of work and did not

provide for the required number of rest breaks when employees worked a major fraction of 4 hours.

This policy was contained in the employee handbook that Plaintiff received when he began working

for Defendant. However, Defendant maintained that it had facially compliant rest break policies in

effect during the relevant time period and that these policies were put into practice at the managed

hotels. In July 2015, Defendant produced documents in response to Plaintiff’s discovery requests

that included copies of two InterContinental hotel rest break policies that Plaintiff had not seen

before. These policies provided for the required number of rest breaks when employees worked a

major fraction of 4 hours. Defendant asked Plaintiff to withdraw the rest break claim in light of

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these policies and its rest break practices in general, but Plaintiff investigated further before

agreeing to do so. Plaintiff explored alternative legal theories, such as the possibility of certifying

the rest break claim on the basis that the policies did not explicitly reference the payment of rest

break premiums when required, based on the recent ruling in Safeway, Inc. v. Superior Court, 238

Cal. App. 4th 1138 (2015). Plaintiff also interviewed class members after receiving their contact

information in late December 2015. The class members interviewed by Plaintiff reported that they

were able to take required rest breaks and could also request and receive premium pay when they

missed rest breaks. Around the end of May 2016, Plaintiff agreed to withdraw the rest break claim.

15. The other claim that Plaintiff ultimately withdrew was the regular rate

miscalculation claim. This claim was based on the theory that employees regularly received free

meals and worked overtime without the value of the free meals being factored into the overtime

rate. Plaintiff investigated this claim for many months and discovered significant obstacles to

pursuing the claim. First, many class members were union members who worked under collective

bargaining agreements and were therefore exempt from the traditional overtime requirements,

pursuant to Labor Code § 514. Second, many class members worked in food and beverage

positions. Under the federal laws and regulations the Court would have referred to in analyzing this

claim, Defendant was specifically exempted from having to include the value of free meals in these

employees’ overtime rate. Further, the vast majority of employees were either union members or

food and beverage employees or both. There were very few non-exempt employees who were both

non-union and non-food and beverage employees. The numbers varied some among hotels, but

overall there were only about 5 employees per hotel (at 11 hotels) who could have been included in

this subclass. Third, there was some evidence supporting the defense that the free meals were

provided for “the convenience of” the hotels. If Defendant could prove this, the regular rate claim

would also have been barred under the federal regulations. Finally, Plaintiff was a union member

and could not have represented this subclass. Plaintiff did consider adding a second class

representative, but for all of the reasons described above, he ultimately agreed to withdraw the

regular rate miscalculation claim.

16. By July 2016, when the parties went to mediation, the class claims had essentially

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been narrowed to the donning and doffing and security bag check claims at the 3 InterContinental

hotels, plus the derivative claims for waiting time penalties and non-compliant wage statements.

The rest break claim had been withdrawn. The regular rate miscalculation claim had not yet been

withdrawn, but Plaintiff’s mediation preparations brought the numerosity issue and other issues to

light and Plaintiff agreed to withdraw the claim shortly after mediation based on the conclusion that

it was subject to several viable defenses. At the time of mediation, Plaintiff had spent more than a

year and a half thoroughly investigating all of the claims, as described above and in the next section

regarding discovery.

17. On September 8, 2016, the parties stipulated to allow Plaintiff to amend the

complaint to reflect the narrowed claims and class definition that resulted from Plaintiff’s discovery

and investigation, and to add the owners of the 3 hotels in question as defendants. The stipulation

was approved, and Plaintiff filed the FAC on September 15, 2016.

18. Throughout the duration of this case, Plaintiff engaged in extensive discussions and

negotiations, which enabled Plaintiff to thoroughly investigate the claims while requiring minimal

Court involvement.

Discovery and Investigation

19. Over the course of the last two years, Plaintiff’s counsel expended significant time

and resources conducting investigation and discovery regarding the class claims, as follows:

Pre-Filing Investigation

20. Plaintiff’s counsel made a request for Plaintiff’s employment records from

Defendant pursuant to California Labor Code §§ 226(b), 432 and 1198.5. Plaintiff’s counsel

received two sets of responsive documents. The documents received pursuant to these requests

consisted of Plaintiff’s payroll data and personnel file.

21. Plaintiff’s counsel also obtained copies of the employment records that Plaintiff had

in his possession, which included wage statements, a copy of the employee handbook for the

InterContinental San Francisco, and other employment records, including dress code policies.

22. Plaintiff’s counsel also made a Public Records Act request to the Division of Labor

Standards Enforcement, seeking documents relating to wage-and-hour claims against

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InterContinental Hotels.

23. Plaintiff’s counsel reviewed and analyzed all of the documents described above prior

to filing the complaint.

Written Discovery

24. Pre-certification discovery began on April 7, 2015, when the parties exchanged

initial disclosures. Plaintiff’s initial disclosures included 241 pages of relevant and potentially

relevant documents, including all of Plaintiff’s employment records in his possession at the time.

25. On May 1, 2015, Plaintiff propounded Interrogatories (Set 1), seeking the names and

contact information of the putative class members. The Interrogatories defined the putative class as

all of Defendant’s non-exempt California employees during the relevant time period. Defendant

vigorously contended that this definition was overbroad, for the reasons described above.

Defendant also insisted on sending a Belaire-West privacy notice before releasing employees’

contact information. Plaintiff spent approximately 3 months investigating and conducting

discovery to narrow the class definition for purposes of the Belaire-West notice (while reserving the

right to define the class more broadly for other purposes if warranted). As explained above,

Plaintiff obtained documents and declarations from Defendant to be able to determine how to define

the class. Between May and August 2015, Plaintiff carefully analyzed the documents and

declarations provided by Defendant, obtained additional information and documents as needed, and

conducted legal research. By August 2015, Plaintiff was able to narrow the class definition enough

that the parties could begin negotiating the language of the Belaire-West notice and the sampling of

putative class members it would be sent to. On November 24, 2015, a Belaire-West notice was sent

to a random sample of uniformed employees at the InterContinental San Francisco and three other

hotels covering each of the brands included in the class definition at the time. On December 23,

2015, Plaintiff received the names and contact information of approximately 440 employees.

26. Also on May 1, 2015, Plaintiff propounded Requests for Production of Documents

(Sets 1 through 4) on Defendant. These requests sought Plaintiff’s complete time records, payroll

records, personnel file, and other employment records; policy documents relating to the claims in

the original complaint; the putative class members’ time records, payroll records, and other

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employment records; and documents relating to the affirmative defenses alleged in Defendant’s

answer to the original complaint.

27. On June 25, 2015, Defendant provided verified substantive responses to Requests for

Production of Documents (Set 1). On June 26, 2015, Defendant provided verified substantive

responses to Requests for Production of Documents (Set 2). Defendant produced about 350 pages

of documents responsive to these requests, including policy documents relating to the donning and

doffing, security bag check, regular rate miscalculation, and rest break claims; the collective

bargaining agreement applicable to Plaintiff during his employment; an indoor map of the

InterContinental San Francisco; and Plaintiff’s time records, payroll records, schedules, and

personnel file.

28. On July 8, 2015, Defendant produced the declaration of David Schweitzer,

Defendant’s Director of Employee and Labor Relations in response to certain requests in Plaintiff’s

Requests for Production of Documents (Set 3). As described above, Mr. Schweitzer’s declaration

provided detailed information about how the policies and practices alleged in the complaint applied

to the managed hotels.

29. On July 13, 2015, Defendant produced the declaration of Jenny Tidwell in response

to certain requests in Plaintiff’s Requests for Production of Documents (Set 3). As described

above, Ms. Tidwell provided detailed information regarding the franchised hotels.

30. On March 17, 2016, Defendant provided verified substantive responses to Requests

for Production of Documents (Set 3). Defendant produced several hundred pages of responsive

documents, including relevant portions of the collective bargaining agreements applicable to the

unionized hotels; documents relating to the donning and doffing claim; and an agreed-upon

sampling of class members’ schedules.

31. During the parties’ extensive discussions about discovery, the parties agreed that

Defendant could postpone responding to Requests for Production of Documents (Set 4) until further

notice. This set of requests sought documents relating to Defendant’s affirmative defenses. The

agreement to postpone responses was still in effect at the time the case settled. The documents and

information that Plaintiff did receive, as described in this declaration, did relate to Defendant’s

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defenses and enabled Plaintiff to fully evaluate the defenses.

32. Pursuant to the parties’ agreement, Defendant produced a large amount of data

pertaining to the putative class members for mediation. Between June 6 and 15, 2016, Defendant

produced seven Excel spreadsheets containing hundreds of thousands of lines of class members’

time and payroll data. This data pertained to all of the non-exempt employees who worked at the 3

InterContinental hotels between November 2010 and April 2016 (the donning and doffing and

security bag check subclasses). The spreadsheets also contained data pertaining to all or nearly all

of the employees who would have been part of the regular rate miscalculation subclass, which was

for purposes of the parties’ negotiations, defined as the non-union, non-food and beverage

employees of 11 specified hotels. Defendant also provided a document identifying the uniformed

positions at each of the 3 InterContinental hotels to assist Plaintiff in interpreting the data. Plaintiff

analyzed this data thoroughly in preparation for mediation.

33. In addition to conducting the discovery described above, Plaintiff responded to

discovery requests from Defendant. On August 26, 2015, Defendant propounded Requests for

Production of Documents (Set 1) on Plaintiff, seeking documents relating to all aspects of the

claims in the original complaint. On October 13, 2015, Plaintiff provided verified substantive

responses, including approximately 40 pages of documents that Plaintiff had not previously

produced.

Depositions

34. Defendant took Plaintiff’s deposition on June 28, 2016. Plaintiff’s deposition lasted

approximately 6 hours.

Class Member Discovery

35. On January 18, 2016, Plaintiff mailed a pre-certification notice to the approximately

440 class members whose contact information had been provided. The notice provided information

about the claims in this case and invited class members to contact Plaintiff’s counsel to provide

relevant information about their work experience.

36. Plaintiff interviewed many class members, who provided detailed information that

assisted Plaintiff in evaluating the claims in this case. For example, class members provided

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information about how long it took to change into and out of uniform and whether they were

provided with compliant rest breaks or premium compensation in lieu thereof.

Settlement Negotiations

37. All of Plaintiff’s pre-filing investigation, discovery during litigation, and pre-

mediation investigation enabled Plaintiff to fairly estimate Defendant’s exposure and the

probability of prevailing on each claim at class certification and trial. Plaintiff was thus able to

enter settlement negotiations armed with the information required to settle this matter for a fair and

reasonable amount, having thoroughly assessed the risks and prepared an estimated class-wide

damages model.

38. On July 14, 2016, the parties participated in a mediation with Mr. Jeffrey Ross, a

well-respected mediator who is very knowledgeable and experienced in wage-and-hour class

actions. The mediation lasted all day, but the parties could not reach a settlement that day. For the

next two and a half weeks, the parties continued their settlement discussions with the help of the

mediator. On or around August 3, 2016, the parties were able to reach a tentative settlement for a

total settlement amount of $975,000.

39. Thereafter, the parties negotiated the terms of the Memorandum of Understanding,

Joint Stipulation of Class Action Settlement (“Joint Stipulation”), and the notice packet. These

negotiations lasted about 5 weeks and the parties encountered numerous difficulties in reaching

agreement as to the terms of the settlement and the language of the notice packet. Nevertheless, the

parties worked together as best they could to finalize the settlement terms, which are memorialized

in the Joint Stipulation. A true and correct copy of the fully executed Joint Stipulation of

Settlement of Class Action (and the proposed notice packet) is attached as Exhibit A.

40. The negotiations were conducted at more than arm’s length and the resulting

settlement was the outcome of an informed and educated analysis regarding class certification,

liability and damages issues, and the total exposure in relation to the costs and risks to Plaintiff and

the class members.

41. This settlement was accomplished after significant investigation and discovery, with

Plaintiff having invested in significant factual and legal research, engaged in numerous discussions

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and exchanges of correspondence with defense counsel, reviewed and analyzed time and payroll

records and other relevant documents and data, and conducted extensive negotiations at the

mediation and thereafter. The settlement was well-reasoned and was reached after Plaintiff

thoroughly assessed the risks presented by the facts of the case and the current applicable law.

These factors support a finding that the settlement is fair and reasonable.

Exposure Assessment

42. As a result of Plaintiff’s investigation, discovery, pre-mediation efforts, and

Defendant’s cooperation in producing relevant documents and class-wide data, Plaintiff was able to

fairly estimate the exposure for each claim alleged in the FAC. Plaintiff was also able to calculate

the following basic information relating to the class size:

Total number of workweeks in the relevant time period (November 26, 2010 to April 28,

2016): 197,1481

Total number of class members: 1,495

Total members of the waiting time penalties subclass: 669

Total members of the wage statement subclass: 1,168

Average regular hourly rate: $16.47

These values were used in the damage formulas for each cause of action, as explained below.

DAMAGE FORMULAS

Donning & doffing claim = Number of unpaid hours per week X average regular

rate X total number of class workweeks

Security bag check claim = Number of unpaid hours per week X average regular

rate X total number of class workweeks

Waiting time penalties claim = Number of class members whose employment ended

between November 26, 2011 and April 28, 2016 X

average regular rate X 8 hours per day X 30 days

1 As is the case in all wage and hour class action cases where a defendant employer is

continuing to operate its business during the settlement approval process, the final workweek numbers for purposes of settlement administration will be higher due to the passage of time between the April 28, 2016 date (which was the date that the parties agreed to use for exposure analysis for this motion) and the preliminary approval date.

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Wage statement claim = Number of class members who worked between

November 26, 2013 and April 28, 2016 X average

amount of statutory penalties

Donning & Doffing Claim

43. Plaintiff alleges that class members are owed wages for time spent changing into

and out of uniform at the hotels. Plaintiff’s theory regarding this claim was that the uniform

donning and doffing time is compensable because employees are required to change at the hotel

and spent a significant amount of time changing. Plaintiff’s investigation and discovery revealed

the following.

44. The three InterContinental hotels involved in this case are full service luxury hotels

and most employees are required to wear formal uniforms. The uniforms generally consist of a

button-down shirt, tie, dress slacks, belt, dress shoes, and sometimes a jacket or hat. As a server,

Plaintiff wore an all-black uniform consisting of a dress shirt, vest, neck tie, dress pants, belt,

dress shoes, apron, and name tag. Employees’ uniforms were laundered and stored at the hotel.

Upon arriving at work on certain days, employees would pick up a clean uniform or a portion of

their uniform. This sometimes required waiting in line, especially in the morning when many

employees were coming on shift. For those employees who changed at the hotel, employees

generally changed into uniform in the locker room and then clocked in. Under Defendant’s

timekeeping policy, employees were not allowed to clock in until they were in uniform.

Defendant also maintained highly detailed dress code policies that required employees to be

impeccably dressed and groomed. Plaintiff and some of the class members interviewed by

Plaintiff reported spending approximately 20 minutes per day changing into and out of uniform.

These employees also reported that they always changed at the hotel and were off the clock while

changing.

45. Defendant vigorously disputed Plaintiff’s factual contentions relating to the

donning and doffing claim. Defendant’s position was that there was no policy at any of the hotels

requiring employees to change at work, and that employees could and did change into all or part

of their uniforms at home. Defendant also contended that time spent changing into and out of

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uniform was de minimis because most employees spent no more than 2 to 5 minutes changing into

uniform and even less time changing out. Defendant also contended that employees were paid for

their donning and doffing time because of Defendant’s policy of rounding employees’ time to the

nearest 7 minutes. According to Defendant, employees often clocked out up to 7 minutes early,

had their time rounded to the end of their shift, changed during the “rounded time,” and thus were

paid for donning and doffing time at the end of the shift. Defendant also maintained that

employees commonly clocked in before changing into uniform, and commonly clocked out after

changing out of their uniform, despite the policy forbidding this practice.

46. Based on Plaintiff’s investigation and discovery, and taking into account

Defendant’s defenses, Plaintiff estimates Defendant’s exposure for this claim to be approximately

$2,698,724 (0.83 average unpaid hours per week X $16.47 average regular rate X 197,148

workweeks). This exposure amount has to be discounted for the risks of prevailing at class

certification and at trial on liability and damages. Plaintiff believed that he had about 65%

chance of prevailing at class certification and approximately 50% chance of prevailing at trial on

liability and damages. Given these risks, Plaintiff estimates the realistic exposure for this claim

to be $877,085.

Security Bag Check Claim

47. Plaintiff alleges that employees at the 3 InterContinental hotels in question were

required to undergo security bag checks at the end of their shifts. After changing back into their

clothes and clocking out, employees walked to the security guard station near the employee

entrance to the hotel and opened their bags for inspection. Bag checks did not occur at the

beginning of the shift. Defendant contended that any time employees spent undergoing bag

checks was de minimis and not compensable. Defendant asserted that many employees did not

bring bags to work, and if they did, the bag checks took only a few seconds because the bags were

flashed open and employees did not have to wait. Plaintiff’s investigation and discovery revealed

that there was significant factual support for Defendant’s contentions.

48. Based on Plaintiff’s investigation and discovery, and taking into account

Defendant’s defenses, Plaintiff estimates Defendant’s exposure for this claim to be approximately

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$324,703 (0.2 average unpaid hours per week X $16.47 average regular rate X 197,148

workweeks X 50% discount for employees who did not bring bags to work). This exposure

amount has to be discounted for the risks of prevailing at class certification and at trial on liability

and damages. Plaintiff believed that he had approximately 70% chance of prevailing at class

certification and roughly 40% chance of prevailing at trial on liability and damages. Given these

risks, Plaintiff estimates the realistic exposure for this claim to be $90,917.

Waiting Time Penalties Claim

49. Plaintiff alleges that class members are owed waiting time penalties in connection

with the donning and doffing and security bag check claims. Defendant vigorously contended

that it was not liable for waiting time penalties because it did not willfully fail to pay wages and

there was a good faith dispute as to whether any wages were owed to class members.

50. Based on Plaintiff’s investigation and discovery, and taking into account

Defendant’s defenses, Plaintiff estimates Defendant’s exposure for this claim to be approximately

$2,644,423 (669 former employees in the statute of limitations period X $16.47 average regular

rate X 8 hours per day X 30 days). This exposure amount has to be discounted for the risks of

prevailing at class certification and at trial on liability and damages. Plaintiff believed that he had

approximately 70% chance of prevailing at class certification and roughly 40% chance of

prevailing at trial on liability and damages. Given these risks, Plaintiff estimates the realistic

exposure for this claim to be $740,438.

Wage Statement Claim

51. Plaintiff’s wage statement claim is derivative of the donning and doffing and

security bag check claims. Like the claim for waiting time penalties, Defendant contended that

the wage statement violations, if any, were not willful.

52. Based on Plaintiff’s investigation and discovery, and taking into account

Defendant’s defenses, Plaintiff estimates Defendant’s exposure for this claim to be approximately

$4,672,000 ($4,000 average penalty per employee X 1,168 employees in the 1-year statute of

limitations period). This exposure amount has to be discounted for the risks of prevailing at class

certification and at trial on liability and damages. Plaintiff believed that he had approximately

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70% chance of prevailing at class certification and roughly 40% chance of prevailing at trial on

liability and damages. Given these risks, Plaintiff estimates the realistic exposure for this claim

to be $1,308,160.

Defendant’s Total Realistic Exposure

53. Based on the above analysis, Plaintiff believes that Defendant’s total realistic

exposure in this case was approximately $3,016,600. The proposed settlement of $975,000

represents a recovery of 32.3% of this exposure figure.

Proposed Class Counsel

54. I am the attorney principally in charge of handling this matter. I graduated from

UCLA in 1991 with a B.A. in Economics and obtained a law degree from Southwestern Law

School in 1996. I have been practicing for approximately 20 years. While in law school, I served

as the Articles Editor of the Southwestern Journal of International Law, as well as served as an

extern/law clerk at the U.S. Bankruptcy Court, California Attorney General's Office (Writs, Trials

& Appeals) (where I drafted six appellate briefs) and the U.S. Attorney's Office (Tax Division).

After graduating law school in 1996, I was commissioned as a naval officer to serve as a military

lawyer for the U.S. Navy Judge Advocate General’s Corps. I was stationed overseas in Yokosuka,

Japan for 4 years. During that time I tried numerous court-martial cases, ranging from

misdemeanors to major felonies, including second-chairing two capital murder cases, one involving

misappropriation of classified material on North Korea. During my tour, I also managed the U.S.

Naval Legal Service Office Pacific’s claims department whose area of responsibility included

mainland Japan, Korea, the Philippines, Hong Kong, Singapore, Diego Garcia, and much of the

Indian Ocean to the North Arabian Sea. For my services, I was awarded two Navy Achievement

Medals, a Navy Commendation Medal and a Humanitarian Service Medal. After my honorable

discharge from the Navy, I practiced law at several Los Angeles defense firms specializing in legal

malpractice defense, banking, real estate and commercial litigation. I have defended numerous

high-exposure legal malpractice cases where the underlying case involved disputes such as complex

binding arbitrations over partnership breakdown, Multi-District Litigation in federal court after a

Boeing 747 airplane crash in Guam, and a multitude of business and commercial litigation issues.

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Currently, I devote my practice to litigating class action cases involving wage and hour, consumer

fraud and unfair business practices on behalf of consumers and employees. Approximately 95% of

our firm’s caseload consists of class actions in various stages of litigation, both in state and federal

courts. Our firm also accepts some individual wage and hour cases with small amounts in

controversy as a form of pro bono, so that we can lend our expertise to someone who would not

otherwise be able to retain competent counsel.

55. Olivia D. Scharrer is an associate attorney at Aequitas Law Group. She received her

Juris Doctorate from Loyola Law School in 2013. During law school, she served as a Production

Editor of the Loyola of Los Angeles International and Comparative Law Review. She also served

as a judicial extern to the Honorable Teresa Sanchez-Gordon, Judge of the Los Angeles Superior

Court. She earned a Bachelor of Arts, magna cum laude, from Oklahoma State University in 2009.

56. Examples of class certification victories obtained by the attorneys of Aequitas Legal

Group (via contested motion) in wage and hour class actions are as follows. In Preciado v.

Adriana’s Insurance Services (L.A.S.C. BC 400171), our motion for class certification for

numerous Labor Code violations was granted on behalf of customer service representatives and

sales agents. Our motion for class certification for Labor Code violations (i.e., minimum

wage/overtime, meal/rest period claims, along with derivative claims) was granted in its entirety in

Hernandez v. Brand Connections, Inc. (L.A.S.C. BC 401775). In Delgado v. C. A. Hofmann

Construction, Inc. (CIVRS 1105913), a proposed class of construction workers was certified in its

entirety for numerous wage and hour claims. In Garcia v. Menzies Aviation (L.A.S.C. BC 452057),

a proposed class of airport ramp agents was certified for wage and hour claims. More recently, on

September 21, 2015, a class of nonexempt employees was certified against a for-profit college in

Nguyen v. Inter-Coast International Training, Inc. (L.A.S. C. BC 461585). On November 20,

2015, another certification victory was achieved on behalf of a class of retail store employees in

Scott-George v. PVH Corp., U.S. District Court, E.D. Cal., 2:13-cv-00441-TLN-DAD.

57. The attorneys of our firm have been appointed Class Counsel (and Lead Class

Counsel in consolidated matters) of numerous wage and hour class actions litigated in both state

and federal courts. Some of the class actions I have handled through final approval are as follows:

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Garcia v. Mellano & Company, L.A.S.C. BC 396063 (class of warehouse and farm workers); Bejar

v. Roman Catholic Archbishop of Los Angeles, L.A.S.C. BC 390260 (class of employees of Our

Lady Queen of Angels church); Scott v. Better Beverages, Inc. (L.A.S.C. BC 403882) (class of

delivery drivers); Gorman v. IDEXX Laboratories, Inc. (L.A.S.C. BC 413933) (class of route

drivers); Guzman v. Rockey Murata Landscaping, Inc. (L.A.S.C. BC 421699) (class of landscaping

workers); Hernandez v. Brand Connections, Inc. (L.A.S.C. BC 401775) (class of warehouse

workers); Preciado v. Adriana’s Insurance Services, Inc., L.A.S.C. BC 400171 (class of customer

service representatives and sales agents); Tyree v. BJ’s Restaurants, O.C.S.C. Case No. 30-2009-

00259460 (class of kitchen managers); Perez v. Rick’s Drive In & Out, L.A.S.C. BC 426222 (class

of restaurant workers); Holloway v. Authentic Recovery Center (L.A.S.C. BC 442949) (class of

substance recovery center workers); Silva v. JYM Enterprises, L.A.S.C. BC 437834 (class of Jack-

In-The-Box restaurant workers); Jimenez v. Printograph, Inc., L.A.S.C. BC 440209 (class of

printshop workers); Ramirez v. Advanced Parking Systems, L.A.S.C. BC 455137 (class of parking

clerks); Zacatenco v. Pinnacle Landscaping Company (L.A.S.C. BC 466988) (class of landscape

laborers); Allen v. Labor Ready Southwest, Inc., C.D. Cal. 09cv04266 (class of temporary workers);

Arana v. Adriana’s Insurance Services, Inc., L.A.S.C. BC 453021 (class of managers); Soltero v.

Mariposa Horticultural Enterprises, L.A.S.C. BC 439687 (class of landscape workers); Castro v.

Marinello School of Beauty (JCCP Case No. 4704) (class of nonexempt beauty school employees);

Garcia v. Menzies Aviation (L.A.S.C. BC 452057) (class of nonexempt employees); Gindi v.

Walgreen Co. (U.S.D.C. Case No. 2:13-cv-01154-PSG-FFM) (class of nonexempt, retail-store

employees); Taylor v. Kwikset Corp. (O.C.S.C. 30-2011-00438371-CU-OE-CXC) (class of

nonexempt employees); and many others.

Proposed Settlement Was Preliminarily Approved After Judicial Scrutiny

58. On October 18, 2016, Plaintiff filed his Motion for Preliminary Approval of the

proposed settlement terms in the Joint Stipulation of Settlement of Class Action. On November 28,

2016, the Court held a hearing on the motion, after which the Court granted the motion, subject to

the parties submitting a revised Proposed Order that changes the filing deadline for Plaintiff’s

Motion for Attorneys’ Fees to January 23, 2017 (which is at least 14 days before the February 6,

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2017 deadline for objecting to the proposed settlement) in accordance with the local rule. Via a

supplemental brief filed on December 5, 2016, the parties notified the Court: (1) that the Notice of

Class Action Settlement/Opt-Out Form will be mailed to class members in 3 languages: English,

Spanish and Mandarin; (2) that CAFA notice will be mailed to the appropriate federal and/or state

officials within 10 days of preliminary approval of the settlement; and (3) that the Proposed Order

was revised to change the deadline for filing the Motion for Attorneys’ Fees. On December 6, 2016,

this Court signed the revised Proposed Order.

Contingent Nature of the Case

59. Complexity and risk were abundant in this case. When this case was taken on a

contingent fee basis, with the plaintiff’s counsel’s firms advancing all litigation costs, the ultimate

result was far from certain. Our collective experience in wage and hour class actions was integral

in evaluating the strengths and weaknesses of the case against Defendant and the reasonableness of

the settlement. I believe that practice in the narrow field of wage and hour litigation requires skill

and knowledge concerning the constantly evolving substantive law (state and federal), as well as

the procedural law of class action litigation. The issues presented by this case required more than

just a general appreciation of wage and hour law and class action procedure, as this area of practice

is constantly developing.

60. In order to adequately litigate this matter, our firms were precluded from other

employment. We were forced to decline other worthy cases because attorney and staff to case

ratios would not allow for any additional matters. Taking on this case meant that our firms had to

turn away other fee-generating work because this case required substantial firm resources on

multiple fronts: pre-litigation investigation and research; interviewing Class Members and Plaintiff;

researching the applicable law, particularly those in flux at the time of settlement; engaging in

formal discovery; analyzing thousands of pages of documents; and conducting legal and factual

analyses in preparation for mediation.

Settlement Administration

61. Pursuant to § C.5. of the Joint Stipulation, the parties agreed to dispense with the

claim forms to maximize the participation of class members and to remove any unnecessary

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-20- DECLARATION OF RONALD H. BAE IN SUPPORT OF PLAINTIFF’S MOTION FOR FINAL APPROVAL

OF CLASS ACTION SETTLEMENT

3:15-CV-00036-TEH

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roadblocks to receiving their share of the settlement. Thus, all class members except those who

timely and validly opt-out will be sent a settlement check. In addition, the parties agreed to and did

send the notice packet in 3 languages: English, Spanish and Mandarin.

62. The result of the settlement administration is as follows: There was no objection;

and only six opt-out forms were submitted. Additional details regarding the result of the settlement

administration are provided in the Declaration of Stephen Gomez which is concurrently filed this

declaration.

I declare under penalty of perjury under the laws of the State of California that the foregoing

is true and correct. Executed this 17th day of February 2017, at Pasadena, California.

RONALD H. BAE

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EXHIBIT A

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Ronald H. Bae (SBN 186826) [email protected] Olivia D. Scharrer (SBN 291470) [email protected] AEQUITAS LEGAL GROUP A Professional Law Corporation 1156 E. Green Street, Suite 200 Pasadena, California 91106 Telephone: (213) 674-6080 Facsimile: (213) 674-6081 Attorneys for Plaintiff NAMARAJ KHATRI Michael J. Burns (SBN 172614) [email protected] Eric E. Hill (SBN 173247) [email protected] SEYFARTH SHAW LLP 560 Mission Street, 31st Floor San Francisco, CA 94105 Telephone: (415) 397-2823 Facsimile: (415) 397-8549 Attorneys for Defendants INTERCONTINENTAL HOTELS GROUP RESOURCES, INC., IHC OF SAN FRANCISCO, INC. and IHG MANAGEMENT (MARYLAND) LLC

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA – SAN FRANCISCO DIVISION

NAMARAJ KHATRI, individually, and on

behalf of other members of the general public

similarly situated,

Plaintiff,

vs.

INTERCONTINENTAL HOTELS GROUP

RESOURCES, INC.; IHC OF SAN

FRANCISCO, INC.; and IHG

MANAGEMENT (MARYLAND) LLC,

Defendants.

Case Number: 3:15-cv-00036-TEH

[Honorable Thelton E. Henderson]

JOINT STIPULATION OF CLASS

ACTION SETTLEMENT

[Complaint filed: November 21, 2013]

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IT IS HEREBY STIPULATED AND AGREED, by and among Plaintiff NAMARAJ

KHATRI, the Class (as defined below), on the one hand, and Defendants INTERCONTINENTAL

HOTELS GROUP RESOURCES, INC., IHC OF SAN FRANCISCO, INC. and IHG

MANAGEMENT (MARYLAND) LLC, on the other, subject to the approval of the Court, that the

settlement of this action shall be effectuated upon and subject to the following terms and

conditions.

A. DEFINITIONS

As used in this Joint Stipulation of Settlement of Class Action (“Joint Stipulation”), the

following terms shall have the meanings specified below. To the extent terms or phrases used in

this Joint Stipulation are not specifically defined below, but are defined elsewhere in the Joint

Stipulation, they are incorporated by reference into this definition section.

“Action” or “Lawsuit” shall mean the above-entitled case venued in the United States

District Court, Northern District of California, San Francisco Division.

“Agreement,” “Stipulation,” “Joint Stipulation,” “Stipulation of Settlement,” “Settlement

Agreement,” or “Stipulation and Agreement” shall mean this Joint Stipulation, including any

attached exhibits.

“Class” shall mean all non-exempt, hourly paid employees who worked for any of the

Defendants at the InterContinental San Francisco, InterContinental Mark Hopkins, or

InterContinental Los Angeles Century City hotels at any time between November 26, 2010 and the

date of preliminary approval, who were required to wear uniforms and undergo security bag

checks.

“Class Counsel” shall mean Aequitas Legal Group, A Professional Law Corporation,

located at 1156 E. Green Street, Suite 200, Pasadena, California 91106.

“Class Member” or “Settlement Class Member” or “Settlement Class” shall mean any

person who is a member of the Class or, if such person is incompetent or deceased, the person’s

legal guardian, executor, heir or successor in interest.

“Class Notice” shall mean the Notice of Class Action Settlement, as set forth in the form

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of Exhibit 1 attached hereto, or as otherwise approved by the Court, which is to be mailed to

Class Members as part of the Notice Packet (defined below).

“Class Participant(s)” shall mean any and all Class Members except those who timely

request exclusion (i.e., who elect to “opt out”) as provided herein.

“Class Period” is November 26, 2010 to the date of preliminary approval of this

settlement.

“Class Representative” and “Named Plaintiff” shall mean Plaintiff NAMARAJ KHATRI.

“Class Settlement” or “Settlement” shall mean the settlement embodied in this Joint

Stipulation, which is subject to Court approval.

“Complaint” shall mean the First Amended Complaint in the above-entitled case.

“Court” shall mean the United States District Court, Northern District of California, San

Francisco Division.

“Defendants” shall mean INTERCONTINENTAL HOTELS GROUP RESOURCES,

INC., a Delaware corporation; IHC OF SAN FRANCISCO, INC., a Delaware corporation; and

IHG MANAGEMENT (MARYLAND), LLC, a Maryland limited liability company.

“Defense Counsel” or “Counsel for Defendants” shall mean the law firm of Seyfarth Shaw

LLP.

“Effective Date” shall mean the date of final approval if no objections are made to the

Settlement, or if objections are made but resolved before final approval of the Settlement. If

objections are made but not resolved before final approval, then the Effective Date is when the

time for appeal has expired following final approval by the Court. Or, if an appeal is filed, the

Effective Date is the date when the appeal is fully resolved.

“Final Approval Date” shall mean the date upon which the Court enters an Order

approving the Class Settlement, after having determined that the Class Settlement is fair, adequate,

and reasonable to the Class as a whole, following: (i) notice to the Class; (ii) an opportunity to

submit timely exclusion or objections to the Settlement; and (iii) a hearing on the fairness of the

terms of the Settlement.

“Final Approval Hearing” shall mean the final hearing held by the Court to ascertain the

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fairness, reasonableness, and adequacy of the Class Settlement.

“Hotels” shall mean the InterContinental San Francisco, InterContinental Mark Hopkins,

and InterContinental Century City hotels.

“Individual Settlement Payment” shall mean the amount to be, and which is, distributed to

any and each Class Participant, based on a ratio of the Class Member’s Individual Workweeks to

the Total Workweeks. The Individual Settlement Payment will be calculated by dividing the Class

Member’s Individual Workweeks by the Total Workweeks and multiplying by the Net Settlement

Amount. A portion of this resulting amount will be subject to tax withholdings.

“Individual Workweeks” shall mean the number workweeks that a Class Member worked

during the Class Period for any of the Defendants in a uniformed, non-exempt position at one or

more of the Hotels.

“Net Settlement Amount” means the Total Settlement Amount less the Settlement

Administrator’s expenses, Class Representative’s Service Payment, and Class Counsel’s

Attorneys’ Fees and Costs.

“Notice Packet” shall mean the Notice of Class Action Settlement and Opt-Out Form,

collectively.

“Opt-Out(s)” shall mean any and all persons who timely and validly request exclusion

from the Class in accordance with the terms of the Class Notice.

“Opt-Out Form” or “Exclusion Form” shall mean the Opt-Out Form, as set forth in the

form of Exhibit 2 attached hereto, or as otherwise approved by the Court, which is to be mailed to

Class Members as part of the Notice Packet.

“Parties” shall mean the Defendants and Plaintiff/Class Representative.

“Preliminary Approval” means the Court Order preliminarily approving this Joint

Stipulation.

“Preliminary Approval Date” means the date upon which the Court enters an Order

preliminarily approving this Stipulation, pending notice, an opportunity to submit objections, and

a fairness hearing thereon.

“Preliminary Approval Hearing” shall mean the hearing held on the motion for preliminary

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approval of the Class Settlement.

“Released Claims” means any and all claims that were asserted in the First Amended

Complaint, or which could have been asserted based on the facts alleged in the First Amended

Complaint, including without limitation to, any and all claims for alleged unpaid wages, itemized

wage statement penalties, or waiting time penalties under the California Labor Code or Business

& Professions Code (including § 17200 et seq.); claims for restitution and other equitable relief,

liquidated damages, punitive damages, or penalties; and any other benefit claimed on account of

the allegations asserted or that could have been asserted in the First Amended Complaint.

“Released Parties” shall mean Defendants and any of their former and present parents,

subsidiaries, predecessors, or affiliates, and their respective officers, directors, employees,

partners, shareholders, attorneys, and agents, and any other successors, assigns, or legal

representatives.

“Service Payment” shall mean any additional monetary payment provided to the Class

Representative for his efforts on behalf of the Class in this Action.

“Settlement Administrator” shall mean the company known as Simpluris, Inc. which the

Parties have agreed will be responsible for administration of the Settlement and related matters.

“Settlement Administrator’s Expenses” means all costs and expenses relating to the

administration of the Settlement, including without limitation, mailing of Notice Packets,

accounting for Opt-Outs and objections, calculation and determination of payments and

percentages, accounting and maintenance of Settlement Fund Account (defined below).

“Settlement Fund Account” shall mean the bank account established pursuant to the terms

of this Joint Stipulation from which all monies payable under the terms of this Stipulation shall be

paid, as set forth herein.

“Settling Parties” shall mean Plaintiff/Class Representative, the Class and Defendants.

“Total Settlement Amount” or “Total Settlement Payment” shall mean the total amount

that Defendants will pay to resolve this Action, based on the aggregation of the agreed-upon

settlement value of individual claims, which is Nine Hundred Seventy Five Thousand Dollars

($975,000), which includes the Settlement Administrator’s Expenses, Class Representative’s

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Service Payment, and Class Counsel’s attorneys’ fees and costs which includes all such fees and

costs incurred to date, as well as all such fees and costs incurred in documenting the Settlement,

securing court approval of the Settlement, and administering the Settlement. Defendants will pay

their share of applicable employer-side payroll taxes on the wages portion of the Settlement

payments separately, outside of this Settlement.

“Total Workweeks” shall mean the total number of workweeks worked by Class Members

in uniformed, non-exempt positions at the Hotels during the Class Period, according to

Defendants’ payroll records.

B. PRE-TRIAL PROCEEDINGS AND NEGOTIATIONS

1. Investigation, Discovery and Research

Class Counsel has conducted investigation, discovery and research during the prosecution

of the Action. Such efforts included, among other things: (a) conducting a thorough pre-filing

investigation; (b) propounding a comprehensive set of written discovery requests; (c) inspecting

and analyzing data and documents produced by Defendants pertaining to Plaintiff and the putative

class members; (d) interviewing numerous putative class members; (e) analyzing the legal

positions taken by Defendants; (f) preparing an analysis of potential class-wide damages and

constructing a damages model; and (g) researching the applicable law with respect to the claims

asserted in this Action and the potential defenses thereto. Thus, the Parties have engaged in

sufficient investigation, discovery and research to assess the relative merits of the claims of the

Class Representative and of Defendants’ defenses to them.

2. Allegations of the Class Representative and Benefits of Settlement

The investigation and discovery conducted in this matter were adequate to give the Class

Representative and Class Counsel a sound understanding of the merits of their position and to

evaluate the worth of the claims of the Class. This Settlement was reached after arm’s-length

bargaining by the Parties with the assistance of an experienced mediator, and after Class Counsel

thoroughly reviewed all relevant evidence. The information obtained from investigation and

discovery as well as information exchanged for mediation was sufficient to assess reliably the

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merits of the respective Parties’ positions and to compromise the issues on a fair and equitable

basis.

The Class Representative and Class Counsel believe that the causes, allegations and

contentions asserted in the Action have merit. However, they recognize and acknowledge the

expense and delay of continued lengthy proceedings necessary to prosecute the Action against

Defendants through trial and through appeals. Class Counsel has taken into account the uncertain

outcome and the risk of any litigation, the risk of continued litigation in complex actions such as

this, as well as the difficulties and delays inherent in such litigation, and the potential difficulty

maintaining the Action as a Class Action. Class Counsel is also mindful of the inherent problems

of proof under, and possible defenses to, the claims alleged in the Action. Class Counsel believes

that the Settlement set forth in this Joint Stipulation confers substantial benefits upon the Class

Participants and each of the members of the Class, and that an independent review of this Joint

Stipulation of Settlement by the Court in the approval process will confirm this conclusion. Based

on their own independent investigation and evaluation, Class Counsel has determined that the

Settlement set forth in the Stipulation is in the best interest of the Class Representative and the

members of the Settlement Class.

3. Defendants’ Denials of Wrongdoing and Benefits of Settlement

Defendants contend that they have complied with all applicable laws, including, but not

limited to, those pertaining to payment of wages, and the provision of accurate wage statements.

Defendants have expressly denied and continue to deny all charges of wrongdoing or liability

against them arising out of any of the conduct, statements, acts or omissions alleged in the Action.

Nonetheless, Defendants have concluded that the further litigation of the Action would be

protracted and expensive, and determined that it is desirable that the Action be fully and finally

settled in the manner and upon the terms and conditions set forth in this Joint Stipulation in order

to limit further expense, inconvenience and distraction, to dispose of burdensome and protracted

litigation, and to permit the operation of Defendants’ business without further expensive litigation

and the distraction and diversion of their personnel with respect to matters at issue in the Action.

Defendants have also taken into account the uncertainty and risks inherent in any litigation.

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Defendants have, therefore, determined that it is desirable and beneficial to them that the Action

be settled in the manner and upon the terms and conditions set forth in this Joint Stipulation.

4. Intent of the Settlement

The Class Settlement set forth herein intends to achieve the following: (1) entry of an

Order approving the Class Settlement set forth in this Joint Stipulation; (2) entry of judgment; and

(3) discharge of Released Parties from liability for any and all of the Released Claims.

C. PROCEDURAL ISSUES

1. Preliminary Approval

Class Counsel will submit this Joint Stipulation to the Court along with the Motion for

Preliminary Approval of Class Action Settlement. The Motion shall be filed in accordance with

Fed. R. Civ. P. 23(e) and the applicable local rules. Plaintiff agrees to provide a draft of the

Motion to defense counsel for review and input prior to filing.

2. Qualified Stipulation to Class Certification

The Parties stipulate to class certification for purposes of Settlement only. Defendants

contend that the facts do not justify class certification under the governing legal standards. The

Court has not ruled on class certification in the underlying litigation. Consequently, a “Settlement

Class” has been established for purposes of administration and resolution of this matter only. It is

not, and it should not be construed as, any admission of fact or law in this matter or any other

matter that class certification is appropriate. If the Court does not grant either preliminary or final

approval of this Settlement, then the Parties revert to their previous positions and Defendants will

not stipulate to class certification.

3. Settlement Administrator

The third-party company known as Simpluris, Inc. will act as the Settlement

Administrator. The Settlement Administrator will mail the Notice Packet to Class Members;

perform calculations concerning Individual Settlement Payments; handle inquiries from Class

Members; review and process Opt-Out Forms (if any) and objections (if any); resolve any

differences between Defendants’ payroll records and information provided by Class Participants;

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distribute payments to Class Participants; and any other issues related to the Settlement

administration.

On a weekly basis, the Settlement Administrator will provide reports to Class Counsel and

Defense Counsel updating them as to the number of Opt-Out Forms as well as any disputes or

objections submitted by Settlement Class Members. The Settlement Administrator will serve on

Class Counsel and Defense Counsel via e-mail date-stamped copies of the original Opt-Out

Forms, challenges and objections no later than five (5) court days after their receipt. The

Settlement Administrator will provide Class Counsel with a declaration of due diligence and proof

of mailing of the Notice Packet, which Class Counsel will file with the Court no later than five (5)

court days prior to the Court’s Final Approval Hearing. Within fourteen (14) calendar days of the

end of the response period, the Settlement Administrator will compile and deliver to Defense

Counsel and Class Counsel a final report with information regarding (a) the final number of Opt-

Outs (if any); (b) the final number of objections (if any); and (c) status of all disputes (if any).

All fees and costs of the Settlement Administrator for administration of the Settlement

shall be paid from the Total Settlement Amount.

4. Notice to Class Members

Notice shall be provided to Class Members in the following manner:

Within seven (7) court days of Preliminary Approval of the Settlement, Defendants shall

provide the Settlement Administrator with the names, last-known residence mailing address and

last-known telephone number, social security number, and the respective Individual Workweeks

that each Class Member worked during the Class Period in a readable MS Excel spreadsheet

(collectively “Class List and Data”). This information shall remain confidential and shall not be

disclosed to anyone, except to applicable taxing authorities and as needed by the Settlement

Administrator to carry out the reasonable efforts required by this Agreement.

Within ten (10) court days after receipt of the Class List and Data, the Settlement

Administrator shall mail the Notice Packet to the Class Members via first-class regular U.S. mail.

Prior to mailing, the Settlement Administrator will perform a search based on the National Change

of Address Database information to update and correct for any known or identifiable address

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changes. It will be conclusively presumed that if an envelope containing the Class Notice has not

been returned before the end of the 45-day opt-out period that the Class Member received the

Notice. If a new address is obtained by a way of a returned Notice Packet, then the Settlement

Administrator shall promptly forward the original Notice Packet to the updated address via first-

class regular U.S. mail indicating on the original Notice Packet the date of such re-mailing.

Where a Notice Packet is returned as undeliverable, without a forwarding address, the Settlement

Administrator will perform a computer/SSN and “skiptrace” search to obtain an updated address

within three (3) court days of receiving the notice from the U.S. Post Office. If a new address is

obtained by way of a returned Notice Packet or skiptrace, then the Settlement Administrator shall

promptly forward the original Notice Packet (no later than 3 court days after receiving the

undeliverable notice or obtaining the skiptrace results) to the new address via first-class regular

U.S mail. Those Class Members who were re-mailed the Notice Packet will be given an

additional 14 calendar days after the 45-day deadline. The Parties agree to cooperate with the

Settlement Administrator to locate a more recent address for Class Members, where necessary.

The Notice will include, but shall not be limited to: information regarding the nature of the

Lawsuit; a summary of the substance of the Settlement; the Class definition; a description of the

Settlement administration, procedure and the deadline for submitting Opt-Out Forms and

objections; the date for the Final Approval Hearing; and the formula used to calculate Individual

Settlement Payments. The Notice shall also include the time period during which the Class

Member worked during the Class Period (according to Defendants’ payroll records), the Class

Member’s Individual Workweeks, and the Class Member’s estimated Individual Settlement

Payment, and shall afford the Class Member the opportunity to challenge the number Individual

Workweeks reflected in Defendants’ payroll records, and to provide evidence supporting any such

challenge. An Opt-Out Form shall allow the Class Members to elect exclusion from the Class

Settlement.

5. Submission of Claim Form Unnecessary to Participate in Settlement

Unless the Class Member submits a valid and timely Opt-Out Form to the Settlement

Administrator by not later than forty-five (45) calendar days after the Notice Packet was first

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mailed, the Class Member will automatically be mailed a check for his or her pro rata share of the

Settlement payment. If a Class Member does not want to participate in this Settlement and wants

to avoid being bound by the Settlement terms, a Class Member must sign his or her Opt-Out Form

and submit it to the Settlement Administrator by not later than forty-five (45) calendar days after

the Notice Packet was first mailed. In order to object to the Settlement, a Class Member must

send his or her objection to the Settlement Administrator not later than forty-five (45) calendar

days after the Notice Packet was first mailed. Settlement Class Members who fail to file and serve

timely written objections in the manner specified above shall be deemed to have waived any

objections and shall be foreclosed from making any objection (whether by appeal or otherwise) to

the settlement, unless otherwise ordered by the Court.

6. Reminder of Opt-Out & Objection Deadlines

Not more than 30 days nor fewer than 25 days after mailing of the original Notice Packet,

the Settlement Administrator shall mail one reminder postcard which shall include the estimated

Individual Settlement Payment as well as contact information for the Parties’ Counsel and the

Settlement Administrator, to all Class Members who have not yet submitted an Opt-Out Form, to

remind them of the deadline. The postcard shall be mailed to such Class Members via first-class

regular U.S. Mail, using the most current mailing address information then available for the Class

Members.

D. SETTLEMENT TERMS

1. The Settlement Class

For the purposes of this Joint Stipulation, the Settlement Class to be conditionally certified

shall consist of all non-exempt, hourly paid employees who worked for any of the Defendants at

the InterContinental San Francisco, InterContinental Mark Hopkins, or InterContinental Los

Angeles Century City hotels at any time between November 26, 2010 and the date of preliminary

approval, and who were required to wear uniforms and undergo security bag checks.

2. Total Settlement Amount

The Total Settlement Amount that Defendants will pay to resolve this Action, based on the

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aggregation of the agreed-upon Settlement value of individual claims, is Nine Hundred Seventy

Five Thousand Dollars ($975,000), which includes the Settlement Administrator’s Expenses,

Class Representative’s Service Payment, and Class Counsel’s attorneys’ fees and costs which

includes all such fees and costs incurred to date, as well as all such fees and costs incurred in

documenting the Settlement, securing court approval of the Settlement, and administering the

Settlement. Payments by Defendants pursuant to this Agreement will settle all pending issues

between the Settling Parties, including but not limited to class member payments, all attorneys’

fees and costs, the claims administrator fees, enhancement payments to the class representative,

and employee-side payroll taxes. Defendants will pay their share of applicable employer-side

payroll taxes on the wages portion of the Settlement payments separately, outside of this

Settlement.

3. Class Representative Service Payment

Defendants will not oppose Plaintiff’s application to the Court for the Class Representative

to receive $10,000 to be paid out of the Total Settlement Amount. To the extent the Court

approves less than the requested amount for the Class Representative Service Payment, the

difference between the requested and awarded amounts will be added to the amount to be

distributed to the Settlement Class members. Plaintiff shall be required to execute a general

release of all known and unknown claims, including a waiver of Civil Code § 1542, but not

including any pending claims for workers’ compensation benefits (if any), he may have against

Defendants, and the Released Parties. Any Class Representative Service Payment approved by the

Court shall be paid to the Class Representative from the Total Settlement Amount, and shall be in

addition to any distribution to which he may otherwise be entitled as a Class Participant. The

Class Representative Service Payment shall not be considered wages, and the Settlement

Administrator shall issue the Class Representatives a Form 1099 reflecting such payment.

4. Class Counsel’s Attorneys’ Fees and Costs

Defendants will not oppose Plaintiff’s application to the Court for attorneys’ fees for

twenty-eight percent of the Total Settlement Payment (or $273,000) and expenses not to exceed

$20,000. These attorneys’ fees and costs will be paid out of the Total Settlement Payment. The

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Class Counsel’s fees and costs approved by the Court shall encompass: (a) all work performed

and costs incurred by Class Counsel in representing Plaintiff and the putative class through the

date of this Joint Stipulation; (b) all work to be performed and costs to be incurred in connection

with approval by the Court of this Joint Stipulation; and (c) all work and costs, if any, incurred in

connection with administering the Settlement through the conclusion of the Action.

To the extent the Court approves less than the requested amount of Class Counsel’s fees and costs,

the difference between the requested and awarded amounts will be added to the amount to be

distributed to the Settlement Class members. Defendants shall bear their own attorneys’ fees and

costs incurred for the Action.

5. Class Member Distribution Formula

After deducting for the amounts for Settlement Administrator’s fees, Plaintiff’s awarded

Class Representative Service Payment, and Class Counsel’s awarded attorneys’ fees and costs, the

balance of the Total Settlement Payment (the “Net Settlement Amount”) will be distributed as

follows:

(a) “Total Workweeks” will be the total number of Workweeks worked by all Class

Members during the Class Period according to Defendants’ payroll records.

“Individual Workweeks” will be the total number of Workweeks worked by each

individual Class Member in a uniformed, non-exempt position at the Hotels during

the Class Period, according to Defendants’ payroll records. For the extra banquet

employees, who work sporadically, the workweeks will be calculated based on the

employee’s total hours worked during the Class Period (assuming 4 hour shifts at

the InterContinental San Francisco and InterContinental Mark Hopkins hotels, and

8 hour shifts at the InterContinental Century City Hotel). Once the number of

“shifts worked” is determined, the workweeks calculation will consider 5 shifts to

be a workweek for the extra banquet employees. For example, if an extra banquet

employee at the InterContinental San Francisco Hotel worked 40 hours during the

Class Period, his Individual Workweeks will be 2 weeks. (40 hours in class period

4 hr shifts = 10 shifts. 10 shifts = 2 workweeks). Otherwise, each Class

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Member’s workweeks will be calculated based on their beginning and end date as

uniformed, non-exempt employees at the Hotels. Other than for the extra banquet

employees, if Defendants’ payroll records reflect that a Class Member worked any

amount of time during a Workweek, that Workweek will be counted as a

Workweek for purposes of calculating the Total Workweeks and the Individual

Workweeks for the particular Class Member.

(b) Each Class Member’s “Individual Settlement Payment” will be based on a ratio of

the Class Member’s Individual Workweeks to the Total Workweeks. The

Individual Settlement Payment will be calculated by dividing the Class Member’s

Individual Workweeks by the Total Workweeks and multiplying by the Net

Settlement Proceeds. Each Class Participant will receive at least $20 as a

Settlement Payment. [?] A portion of each Class Participant’s Settlement Payment

will be subject to tax withholdings, as described below.

(c) Settlement Class Members shall be entitled to dispute their Individual Workweeks

in writing. Notice of any dispute permitted by this paragraph must specify the

grounds for the dispute and be mailed by U.S. first class mail to the Settlement

Administrator, postmarked no later than the date to submit a timely objection

pursuant to paragraph C. 5. Upon receipt of notice of any such dispute, the

Settlement Administrator shall promptly serve Plaintiff’s and Defendants’ counsel

with a copy of the notice of dispute and any accompanying papers. Defendants

shall have ten (10) days after the receipt of a notice of dispute to provide

information to the Administrator regarding the Settlement Class Member initiating

the dispute. All disputes by the Settlement Class Members shall be determined in a

single, final, binding, non-appealable decision by the Administrator with the

understanding that the only such objections permitted are those set forth under this

paragraph related to the number of Individual Workweeks. The Administrator will

review documentation and may talk to the Settlement Class Member initiating the

dispute and a representative of Defendants in making its non-appealable decision

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with respect to the dispute. The burden shall fall on the Settlement Class Member

initiating the dispute to produce information and/or documents affirmatively

rebutting the information provided by Defendants. The Administrator shall render

a decision within 14 days after receipt of the mailing initiating the dispute.

6. Non-Reversionary Settlement

The Parties agree that no part of the Total Settlement Amount will revert back to

Defendants. Class Participants shall have ninety (90) calendar days to deposit or otherwise cash

their settlement checks. This 90-day period will be counted from the postmark date of the checks’

mailing to Class Participants by the Settlement Administrator. As to the funds that remain in the

Settlement Fund Account after 90 days due to Class Participants’ failure to deposit or cash their

settlement checks, those funds will be distributed as follows: 50% to Legal Aid Society –

Employment Law Center (San Francisco) and 50% to Counsel for Justice Veterans Legal Services

Project.

7. Distribution of Settlement Funds

Within five (5) court days of the Effective Date, Defendants will transfer to the Settlement

Administrator the total amount of the settlement funds due under this Settlement. The settlement

payments to all Class Participants and the Class Representative Service Payment shall be

distributed by the Settlement Administrator no later than ten (10) court days after the Effective

Date. The Settlement Administrator shall be the only entity authorized to make withdrawals or

payments from the Settlement Fund Account.

8. Treatment of Class Settlement Payments

All class Individual Settlement Payments will be allocated as follows: 30% to settlement

of wage claims, 30% to settlement of claims for interest, and 40% to settlement of claims for

statutory penalties. The parties understand and agree that Defendants are neither providing tax or

legal advice, nor making representations regarding tax obligations or consequences, if any, related

to this Agreement, and that Settlement Class Members will assume any such tax obligations or

consequences that may arise from this Agreement, and that Settlement Class Members shall not

seek any indemnification from Defendants in this regard. The parties agree that, in the event that

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any taxing body determines that additional taxes are due from any Settlement Class Member, such

Settlement Class Member assumes all responsibility for the payment of any such taxes.

9. Release of Claims by Settlement Class

This settlement resolves all claims of the Class Participants, arising out of or directly

related to the claims and facts asserted in the Lawsuit, up to and through the date of preliminary

approval, including those that could have been but were not asserted. Upon approval of the

Settlement at the Final Approval Hearing, each Class Participant shall release and discharge the

Released Parties (i.e., Defendants, and any of their former and present parents, subsidiaries,

predecessors, or affiliates, and their officers, directors, employees, partners, shareholders,

attorneys, and agents, and any other successors, assigns, or legal representatives) from Released

Claims, which are any and all claims that were asserted in the First Amended Complaint, or which

could have been asserted based on the facts alleged in the First Amended Complaint, including

without limitation to, any and all claims for alleged unpaid wages, itemized wage statement

penalties, or waiting time penalties under the California Labor Code or Business & Professions

Code (including § 17200 et seq.); claims for restitution and other equitable relief, liquidated

damages, punitive damages, or penalties; and any other benefit claimed on account of the

allegations asserted or that could have been asserted in the First Amended Complaint.

When the Court grants final approval of the terms of this Joint Stipulation, Plaintiff (and

Plaintiff alone) will be deemed to have given a general release of all known and unknown claims,

by having executed this Joint Stipulation, including a waiver of Civil Code § 1542 (which provides

as follows: “A general release does not extend to claims which the creditor does not know or

suspect to exist in his or her favor at the time of executing the release, which if known by him or

her must have materially affected his or her settlement with the debtor.”), against Defendants and

any of their former and present parents, subsidiaries, predecessors, and or affiliates, and their

officers, directors, employees, partners, shareholders, attorneys, and agents, and any other

successors, assigns, or legal representatives.

/ / /

/ / /

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E. NULLIFICATION OF THE JOINT STIPULATION

If the total number of opt-outs exceeds 10%, Defendants have the option to nullify this

Settlement within thirty (30) court days of the last day of the response period via a written notice

(email/fax will suffice) to Class Counsel. However, if this option is exercised by Defendants,

Defendants shall be solely responsible for the costs incurred for the settlement administration.

In addition, if (a) the Court should for any reason fail to approve this Settlement in the

form agreed to by the Parties, or (b) the Court should for any reason fail to enter a judgment in the

Action, or (c) the judgment is reversed, modified or declared or rendered void, then this Settlement

shall be considered null and void, and neither this Settlement, nor any of the related negotiations

or proceedings, shall be of any force or effect, and all Parties to this Settlement shall stand in the

same position, without prejudice, as if the Settlement had been neither entered into nor filed with

the Court. Invalidation of any material portion of this settlement shall invalidate this Settlement in

its entirety, unless the Parties shall subsequently agree in writing that the remaining provisions of

the Settlement are to remain in full force and effect.

F. FINAL APPROVAL HEARING

At the Final Approval Hearing, Class Participants shall move the Court for an order finally

approving the terms of the Joint Stipulation, certifying the Class for settlement purposes only,

finding the terms of the Joint Stipulation as being fair, reasonable and adequate to the Class

Participants. Class Counsel and Defendants’ Counsel shall submit to the Court such pleading

and/or evidence as may be required for the Court’s determination.

G. NOTICES

Unless otherwise specifically provided herein, all notices, demands or other

communications given hereunder shall be in writing and shall be deemed to have been duly given

as of the fifth calendar day after mailing by First Class U.S. Mail, addressed as follows:

To Class Counsel for Plaintiff:

Ronald H. Bae

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Olivia D. Scharrer

AEQUITAS LEGAL GROUP

1156 E. Green Street, Suite 200

Pasadena, California 91106

To Counsel for Defendants:

Michael J. Burns

Eric E. Hill

SEYFARTH SHAW LLP

560 Mission Street, 31st Floor

San Francisco, CA 94105

H. DUTIES OF THE PARTIES

1. Mutual Full Cooperation

The Parties agree to cooperate fully with each other to accomplish and implement the

terms of this Joint Stipulation. Such cooperation shall include, but not be limited to, execution of

such other documents and the taking of such other actions as may reasonably be necessary to

fulfill the terms of this Joint Stipulation. The Parties shall use their best efforts, including all

efforts contemplated by this Joint Stipulation and any other efforts that may become necessary by

Court Order, or otherwise, to effectuate this Joint Stipulation and the terms set forth herein. As

soon as practicable after execution of this Joint Stipulation, Class Counsel with the cooperation of

Defendants and their counsel, shall take all necessary and reasonable steps to secure the Court’s

Final Approval of the terms of this Joint Stipulation.

2. Duty to Support and Defend the Settlement

The Parties agree that the terms of the Joint Stipulation are fair and reasonable and will so

represent to the Court. In addition, the mediator may, at his discretion, execute a declaration

supporting the Settlement and the reasonableness of this Settlement, and the Court may, in its

discretion, contact the mediator to discuss the Settlement and whether or not the Settlement is fair

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and reasonable. The Parties hereto agree to abide by all of the terms of the Joint Stipulation in

good faith and to support the Settlement fully, and to use their best efforts to defend this

Settlement from any legal challenge, whether by appeal or collateral attack.

3. No Publicity or Disparagement

Plaintiff and Class Counsel agree on behalf of themselves and their representatives or

agents, that they have not and shall not publicize any aspect of this settlement, except that Class

Counsel may discuss the settlement in full with its clients and class members, and Plaintiff may

direct any inquiries regarding the case to his Counsel. Plaintiff and his counsel further agree not

to make any disparaging or defamatory comments concerning Defendants, their employees or

agents, products, methods of doing business, or employment or hiring practices. Defendants’

counsel agrees not to make any disparaging or defamatory comments concerning Plaintiff.

Plaintiff also agrees not to testify in any matter in which Defendants have an interest unless

Plaintiff is under compulsory process or are asked to testify by Defendants.

I. MISCELLANEOUS PROVISIONS

1. Stipulation Regarding Class Certification

The Parties and Class Participants agree to stipulate to class certification for purposes of

implementing this Settlement only, provided, however, that Plaintiff and Class Counsel can appeal

any reduction in the requested attorneys’ fees and cost by the Court.

2. Construction

The Parties hereto agree that the terms and conditions of this Joint Stipulation are the result

of lengthy, intensive, arm’s-length negotiations between the Parties, and that this Joint Stipulation

is not to be construed in favor of or against any party by reason of the extent to which any party or

its counsel participated in its drafting.

3. Choice of Law

This Joint Stipulation is intended to and shall be governed by the laws of the State of

California, without regard to conflicts of law principles.

/ / /

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4. Captions and Interpretations

Paragraph titles or captions contained herein are inserted as a matter of convenience and

for reference only, and in no way define, limit, extend, or describe the scope of this Joint

Stipulation or any provision thereof.

5. Severable Terms

Should any provision in this Agreement be declared or determined to be illegal or invalid,

the validity of the remaining parts, terms, or provisions shall not be affected thereby, and the

illegal or invalid part, term, or provision shall be deemed not to be part of this Agreement, and all

remaining provisions shall remain valid and enforceable.

5. Modification

This Joint Stipulation may not be changed, altered, or modified, except in writing signed

by the Parties hereto and approved by the Court. This Joint Stipulation may not be discharged

except by performance in accordance with its terms or by a writing signed by the Parties hereto.

6. Integration Clause

This Joint Stipulation contains the entire agreement between the Parties relating to the

Settlement of the Action and the transactions contemplated thereby, and all prior or

contemporaneous agreements, understandings, representations, and statements, whether oral or

written, and whether by a party or such party’s legal counsel, are merged herein. No rights under

this Joint Stipulation may be waived except in writing.

7. Successors and Assigns

This Joint Stipulation shall be binding upon and inure to the benefit of the Parties hereto

and their respective heirs, trustees, executors, administrators, successors, and assigns.

8. Class Counsel Signatories

Because the Members of the Class are so numerous, the Parties agree that it is impossible

or impractical to have each Class Participant sign this Joint Stipulation. Thus, it is agreed that, for

purposes of seeking approval of the Class Settlement, this Joint Stipulation may be executed on

behalf of the Class by the Class Representative and Class Counsel.

/ / /

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EXHIBIT 1

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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA, SAN FRANCISCO DIVISION

Khatri v. InterContinental Hotels Group Resources, Inc., et al.

Case No. 3:15-cv-00036 TEH

NOTICE OF CLASS ACTION SETTLEMENT

If you are or were employed as a non-exempt employee at the InterContinental San Francisco,

InterContinental Mark Hopkins, or InterContinental Los Angeles Century City hotel at any

time between November 26, 2010 and ________________ (insert date of preliminary approval)

and were required to wear a uniform and undergo security bag checks, you are eligible to

receive compensation from a class action settlement.

A former non-exempt employee of the InterContinental San Francisco hotel has brought a

lawsuit alleging that he and other similarly situated employees should have been paid for the

time they changed into and out of their uniforms at work and were subject to security bag

checks. The plaintiff, Namaraj Khatri, sought to represent a class of employees which includes

you. All three InterContinental hotels deny all allegations raised in the lawsuit and deny that

they have violated any laws.

The parties, however, have reached a settlement that the Court has preliminarily approved on

the ground that the settlement is fair, reasonable, adequate, and in the best interests of the class

members.

A court authorized this notice. This is not an advertisement. Please read it carefully.

This is not a lawsuit against you. You are not being sued.

But, your rights will be affected by this settlement.

YOUR LEGAL RIGHTS & OPTIONS IN THIS SETTLEMENT

DO NOTHING AND

GET AUTOMATIC

PAYMENT

If you received this Notice of Class Action Settlement, you

will automatically receive your share of the settlement,

unless you exclude yourself. You do not need to submit a

claim form to receive this payment.

EXCLUDE

YOURSELF BY OPTING

OUT

Get no payment. This is the only option that allows you to

ever be part of any other wage and hour lawsuit against the

InterContinental San Francisco, InterContinental Mark

Hopkins, or InterContinental Los Angeles Century City

hotels that involves the claims made in this case. But you

will have to get your own attorney or represent yourself.

OBJECT If you so choose, you may object to this settlement.

Your options are explained in this notice. To receive your share of the settlement, you do not

need to submit a claim form. If you do not want to participate in the settlement, you must

submit an opt-out form by ________________.

Any questions? Read the entire notice and if you still have questions, please call (800) 779-

2104.

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PLEASE READ THIS NOTICE CAREFULLY.

Your rights will be affected by this settlement.

1. Why should you read this notice? .......................................................................................................... Page 2

2. What is this case about? ......................................................................................................................... Page 2

3. What is the class action settlement? ....................................................................................................... Page 3

4. How much is the settlement? ................................................................................................................. Page 3

5. How much will I receive from the settlement? ..................................................................................... Page 3

6. How will attorneys for the case be paid? ............................................................................................... Page 4

7. Why did InterContinental Hotels join in the settlement? ....................................................................... Page 4

8. Why did I get this notice? ...................................................................................................................... Page 4

9. Who are the parties in this class action? ................................................................................................ Page 4

10. Who are the attorneys representing the parties? .................................................................................... Page 4

11. Is there a trial date set for this class action?........................................................................................... Page 5

12. What are my rights in this matter? ......................................................................................................... Page 5

13. What rights will I give up if I participate in this settlement? ................................................................. Page 6

14. What if I need additional information? .................................................................................................. Page 6

1. Why should you read this notice?

This notice is to let you know that on _______________, 2016, Judge Thelton Henderson of the United States

District Court, Northern District of California, San Francisco Division conditionally certified a class action for the

purposes of settlement and approved this notice. Further, the Court will hold a Final Fairness Hearing concerning

the proposed settlement on _____________, 2017 at _________ __.m. The Court may adjourn or continue the

hearing, without further notification, as the Court may direct. This notice tells you about your rights to share in

the settlement or to potentially exclude yourself (otherwise known as “opting out”) from the settlement.

2. What is this case about?

Plaintiff alleges that the InterContinental San Francisco, InterContinental Mark Hopkins, and InterContinental

Los Angeles Century City hotels (collectively hereinafter “InterContinental”) violated certain California wage

and hour laws and unfair competition laws by: not compensating their non-exempt, hourly-paid employees for the

time it took them to put on and take off their uniforms and to go through security bag checks; not paying all

wages due in the time required by law upon termination or resignation; and not providing accurate, itemized wage

statements. InterContinental denies these allegations and asserts that it has fully complied with all of its legal

obligations.

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3. What is the class action settlement?

The parties have reached a proposed settlement that the Court has preliminarily approved. If given final approval

by the Court, the settlement will affect all Class Members, entitling those who do not timely opt out to receive

payment.

4. How much is the settlement?

The Total Settlement Amount is $975,000, which will cover settlement payments to all Class Members,

settlement administration fees, a class representative service payment, and Plaintiff’s attorneys’ fees and costs.

InterContinental will pay its share of applicable employer-side payroll taxes on the wages portion of the

settlement payments separately, outside of this settlement. The actual amount that you will receive will be based

on the total number of workweeks you worked for InterContinental between November 26, 2010 and

_________________, 2016 (the “Class Period”), as shown by InterContinental’s payroll records. The Net

Settlement Amount (the amount remaining after deductions from the Total Settlement Amount for settlement

administration fees, a class representative service payment, and Plaintiff’s attorneys’ fees and costs) will be

divided by the total number of weeks worked by all participating Class Members (i.e., all those who do not opt

out) during the Class Period to determine a multiplier. Each Class Member’s payment will equal the number of

weeks worked by that Class Member during the Class Period, times the multiplier.

YOU DO NOT NEED TO SUBMIT A CLAIM FORM IN ORDER TO RECEIVE

YOUR SHARE OF THE SETTLEMENT.

IF YOU DO NOT WANT TO PARTICIPATE IN THE SETTLEMENT, YOU

MUST RETURN AN OPT-OUT FORM TO THE SETTLEMENT

ADMINISTRATOR POSTMARKED AND/OR RECEIVED BY THE

SETTLEMENT ADMINISTRATOR NO LATER THAN _______________. AN

OPT-OUT FORM IS ENCLOSED WITH THIS NOTICE.

5. How much will I receive from the settlement?

InterContinental’s business records indicate that you worked ___ weeks as a non-exempt employee during the

period from November 26, 2010 through _______________. [If you work or worked as an Extra Banquet

employee, your workweeks were calculated by taking the total number of hours you worked during the Class

Period, determining the number of shifts you worked, and then calculating the number of workweeks, assuming 5

shifts makes up a workweek. Because Extra Banquet workers generally work on a sporadic basis, this was

determined to be the most reasonable method for calculating workweeks.] If you do not opt out of this Settlement,

you will automatically be mailed a check for your pro-rata share of the settlement payment, which will be based

on your total workweeks stated in this Notice. The amount you will receive is estimated to be $_____. Please

keep in mind this is only an estimate and may be increased or decreased as a result of final calculations performed

during the claims administration process.

If you disagree with your workweeks stated in the prior paragraph, please contact the Settlement Administrator

and provide the total number of weeks you believe you worked as a nonexempt employee for InterContinental

between November 26, 2010 and _____________. You will need to submit supporting documentation of your

claimed workweeks by mailing them to the Settlement Administrator (Simpluris, Inc., 3176 Pullman Street, Suite

123, Costa Mesa, CA 92626), or via fax at (714) 824-8591, or via email at [email protected].

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If you disagree with your stated work weeks, the Settlement Administrator will review your claim and all

supporting documentation that you provide and then will notify you of the final determination via written

correspondence within 14 calendar days of their receipt of your supporting documentation.

6. How will attorneys for the case be paid?

Class Counsel will apply for fees of $273,000, which is 28% of the Total Settlement Amount, and up to $20,000

for litigation costs. Class Counsel will further apply for a class representative service payment to Plaintiff

Namaraj Khatri in the amount of $10,000 to recognize his services as a class representative and for assuming the

risk of paying the litigation costs incurred by Class Counsel and InterContinental in the event of an unsuccessful

outcome in this case at trial or on appeal. Additionally, the Court-appointed Settlement Administrator’s costs

associated with mailing and processing Class Members’ claims will be deducted from the settlement fund.

7. Why did InterContinental agree to settle this case?

InterContinental has agreed to the settlement as a compromise because it wishes to finally, fully and completely

resolve the dispute. InterContinental recognizes the uncertainty and risk inherent in any litigation, and the

substantial expense and time necessary to defend the litigation. By agreeing to the terms of the settlement,

InterContinental does not admit any of the allegations in the case, and does not admit that it has violated any law

or that any Class Member has suffered any damage. As such, InterContinental is not giving up its right to defend

itself against any of the allegations involved in the lawsuit if this settlement fails for any reason.

8. Why did I get this notice?

You received this notice because InterContinental’s business records indicate that you worked, or continue to

work for InterContinental as a non-exempt employee in California between November 26, 2010 and

_____________ and were required to wear a uniform and undergo security bag checks.

9. Who are the parties in this class action?

Mr. Namaraj Khatri is the Plaintiff/Class Representative. InterContinental Hotels Group Resources, Inc., IHC of

San Francisco, Inc. and IHG Management (Maryland) LLC are the Defendants.

10. Who are the attorneys representing the parties?

Attorneys for Plaintiff/Class Representative

Ronald H. Bae (SBN 186826) [email protected] Olivia D. Scharrer (SBN 291470) [email protected] AEQUITAS LEGAL GROUP A Professional Law Corporation 1156 E. Green Street, Suite 200 Pasadena, California 91106 Telephone: (213) 674-6080 Facsimile: (213) 674-6081

Attorneys for Defendants

Eric E. Hill (SBN 173247) [email protected]

SEYFARTH SHAW LLP

560 Mission Street, 31st Floor

San Francisco, CA 94105

Telephone: (415) 397-2823 Facsimile: (415) 397-8549

11. Is there a trial date set for this class action?

Currently, there is no trial date. If the settlement is not approved by the Court, the parties may proceed to trial.

Case 3:15-cv-00036-TEH Document 47-1 Filed 02/17/17 Page 49 of 52

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Page 5 of 6

12. What are my rights in this matter?

If you wish to participate in the settlement and receive compensation, you do not need to submit a claim form.

You will be mailed a payment automatically (unless you timely opt out) if the settlement becomes final.

If you do not wish to participate in the settlement, you must request exclusion by sending the Settlement

Administrator an Opt-Out Form post-marked no later than _________________. If you request exclusion, you

will receive no money from the settlement. The judgment will bind all Class Members who do not timely and

properly request exclusion.

If you are a current employee, your decision as to whether to participate in the settlement will not affect your

employment.

If you wish to make an objection to the settlement, you may file a written statement stating your objection and the

basis for your objection, along with any and all documents that support your objection, with the following

settlement administrator: Simpluris, Inc., 3176 Pullman, Suite 123, Costa Mesa, CA 92626, Tel (800) 779-2104,

Fax (714) 824-8591, Email: [email protected]. Even if you object to the settlement, you will still receive

your pro rata share of the Net Settlement Amount, if the court approves the settlement. The last day to

object is _______________.

13. What rights will I give up if I participate in this settlement?

The Class Members who participate in the settlement will fully and finally release and discharge the Released

Parties from all liability for the Released Claims which covers the time period from November 26, 2010 to

______________.

The Released Parties means InterContinental Hotels Group Resources, Inc., IHC of San Francisco, Inc., and IHG

Management (Maryland) LLC, and any of their former or present parents, subsidiaries, predecessors, or affiliates,

and their respective officers, directors, employees, partners, shareholders, attorneys, and agents, and any other

successors, assigns, or legal representatives.

The Released Claims means any and all claims that were asserted in the First Amended Complaint, or which

could have been asserted based on the facts alleged in the First Amended Complaint, including without limitation

to, any and all claims for alleged unpaid wages, itemized wage statement penalties, or waiting time penalties

under the California Labor Code or Business & Professions Code (including § 17200 et seq.); claims for

restitution and other equitable relief, liquidated damages, punitive damages, or penalties; and any other benefit

claimed on account of the allegations asserted or that could have been asserted in the First Amended Complaint.

14. What if I need additional information?

For a more detailed statement of the matters involved in the Action and the Class Settlement, you may refer to the

pleadings, the Joint Stipulation of Settlement of Class Action, and other papers filed in the Action, which may be

inspected at the Office of the Court Clerk, United States District Court, Northern District of California, San

Francisco Division, located at 450 Golden Gate Ave, San Francisco, CA 94102, during the Court's normal

business hours, or online at https://ecf.cand.uscourts.gov/cgi-bin/login.pl. All inquiries by Class Members about

the Class Settlement or the claims process should be directed to:

Simpluris, Inc.

3176 Pullman Street, Suite 123

Costa Mesa, CA 92626

(800) 779-2104

[email protected]

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Refer to the Khatri v. InterContinental Hotels Group Resources, Inc., et al. Class Action Settlement. It is your

responsibility to keep the claims administrator apprised of your current address at all times until receipt of your

settlement check.

PLEASE DO NOT CALL THE COURT FOR INFORMATION ABOUT THIS PROPOSED

SETTLEMENT OR THE CLAIMS PROCESS. ALSO, PLEASE DO NOT CONTACT INTERCONTINENTAL, OR ITS MANAGERS, ABOUT THIS SETTLEMENT OR THE

CLAIMS PROCESS.

Case 3:15-cv-00036-TEH Document 47-1 Filed 02/17/17 Page 51 of 52

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OPT-OUT FORM

KHATRI V. INTERCONTINENTAL HOTELS GROUP RESOURCES, INC., ET AL.

United States District Court, Northern District of California, San Francisco Division

Case No. 3:15-cv-00036 TEH

YOUR LEGAL RIGHTS & OPTIONS IN THIS SETTLEMENT

DO NOTHING AND

GET AUTOMATIC

PAYMENT

If you received this Notice of Class Action Settlement, you

will automatically receive your share of the settlement,

unless you exclude yourself. You do not need to submit a

claim form to receive this payment.

EXCLUDE

YOURSELF

Get no payment. This is the only option that allows you to

ever be part of any other wage and hour lawsuit against the

InterContinental San Francisco, InterContinental Mark

Hopkins, or InterContinental Los Angeles Century City

hotels that involves the claims made in this case. But you

will have to get your own attorney or represent yourself.

OBJECT If you so choose, you may object to this settlement.

I declare as follows:

I am or was a non-exempt, hourly paid employee who worked at the InterContinental San

Francisco, InterContinental Mark Hopkins, or InterContinental Los Angeles Century City hotel between

November 26, 2010 and ________________ (insert date of preliminary approval) and was required to

wear a uniform and to undergo security bag checks. I received and reviewed the Notice of Class Action

Settlement in this action, and I wish to be excluded from the class and not to participate in the proposed

settlement.

Dated: _____________________ ________________________________________

(Signature)

________________________________________

(Typed or Printed Name)

________________________________________

(Address)

________________________________________

(City, State, Zip Code)

________________________________________

(Telephone Number, Including Area Code)

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