# MEMORANDUM

**TO:** Settlement Administrator  
**FROM:** Neutral Settlement Counsel  
**RE:** Audit of Proposed Class Notice (Question 58)  
**DATE:** October 26, 2023  

## I. Immediate Action Required: Halt Distribution

**Distribution Status:** The administrator has uploaded the file but has not yet transmitted, emailed, or mailed any notice to class members.

**Directive:** **Do not transmit the current draft.** Per Governing Rule 7, a material error discovered before transmission requires distribution to be stopped and the notice corrected. Because no notices have been distributed to class members, a renewed decision period is **not required**. The corrected notice may proceed for initial distribution using the existing deadlines (October 2 / November 13).

## II. Quantification of Material Errors

The proposed notice contains three categories of material errors: arithmetic/deduction omissions, miscalculated award estimates derived from those errors, and an overly broad release description.

| Item | Agreement Provision | Proposed Notice | Error Discrepancy |
| :--- | :--- | :--- | :--- |
| **Gross Fund** | $5,400,000 | $5,400,000 | None |
| **Proposed Deductions** | Fees: $1.35M<br>Costs: $0.11M<br>Admin: $0.14M<br>Awards: $0.03M<br>**Agency Payment: $0.27M** | Fees: $1.35M<br>Costs: $0.11M<br>Admin: $0.14M<br>Awards: $0.03M<br>*(Agency Payment Omitted)* | **Missing $270,000 deduction.** |
| **Net Class Fund** | $3,500,000 | $3,770,000 | **Overstated by $270,000.** |
| **Value Per Point** | Net $3.5M / 10k pts = **$350** | Net $3.77M / 10k pts = **$377** | **Incorrect by $27 per point.** |
| **Maya Ortiz Estimate** | 6 points × $350 = **$2,100** | 6 points × $377 = **$2,262** | **Overstated by $162.** |
| **Release Scope** | Wage-statement & off-clock only.<br>Period: Jan 1, 2022 – June 30, 2025.<br>Excludes discrimination, etc. | "All claims... through date court approves." | **Materially misleading.** Broader than agreement; indefinite time period; fails to identify exclusions required for informed exclusion decisions (Rule 4). |

## III. Corrected Notice Language

Per Governing Rule 8, accurate language has been preserved. Only defective paragraphs are replaced below.

### [Insert Replacement: Settlement Amount and Deductions]
**Settlement amount and deductions.** Defendant will pay $5,400,000. After proposed attorney fees of $1,350,000, litigation costs of $110,000, administration expenses of $140,000, service awards of $30,000, and a payment to the Workplace Standards Agency of $270,000, approximately $3,500,000 will remain for class members. All deductions require court approval.

### [Insert Replacement: How your payment is calculated]
**How your payment is calculated.** The administrator identified 10,000 points. Each point is currently worth approximately $350. Maya Ortiz has six points, so her estimated payment is $2,100 before required withholding. Estimates may change.

### [Insert Replacement: Release]
**Release.** Unless you exclude yourself, you will release Defendant and related persons from claims for wage-statement violations and off-clock work based on the factual allegations in the complaint accruing from January 1, 2022 through June 30, 2025. This release does not cover discrimination, harassment, retaliation, workers' compensation, vested benefits, or claims arising after June 30, 2025.

### [Retain Without Change: Taxes]
*(The existing tax paragraph accurately reflects the agreement's 50/50 estimate and includes the required disclaimer per Rule 6.)*
> **Taxes.** The parties currently estimate that one-half of each award will be treated as wages and one-half as statutory amounts. This is not tax advice.

### [Retain Without Change: Your Choices]
*(The existing procedure paragraph accurately reflects the exclusion, objection, and hearing dates found in the agreement.)*
> **Your choices.** You may do nothing, exclude yourself by October 2, or object by October 2. The court will hold the fairness hearing on November 13 at the location stated below.

## IV. Summary of Corrections

1.  **Deductions:** Added the mandatory $270,000 payment to the Workplace Standards Agency to match the settlement agreement.
2.  **Net Fund:** Recalculated from $3,770,000 to $3,500,000 based on correct deductions (Rule 1 & 2).
3.  **Point Value:** Adjusted from $377 to $350 per point (Rule 2).
4.  **Maya Ortiz Award:** Adjusted from $2,262 to $2,100 based on correct point value (Rule 2 & 3).
5.  **Release Scope:** Narrowed language from "all claims" to specific wage-statement and off-clock claims; fixed the accrual period to June 30, 2025; added list of excluded claims to satisfy informed exclusion requirements (Rule 4).

**End of Memorandum**