JUUL Labs PAGA and Unfair Competition Settlement
The parties have reached a settlement in the case of Hamilton v. Juul Labs, Inc., Case No. 3:20-cv-03710-EMC. Because the settlement includes claims for penalties under the Private Attorneys General Act (“PAGA”), the United States District Court for the Northern District of California must approve the settlement.
The settlement approval hearing is set for November 4, 2021.
What the Case Is About
California law establishes as a minimum employment standard an anti-gag rule for employees. Doe v. Google, 54 Cal.App.4th 948, 961 (2020).
In June 2020, Plaintiff Marcie Hamilton filed suit against Juul Labs, Inc. alleging, among other things, that Juul violated California’s anti-gag rule by adopting and enforcing agreements, policies, and practices (“Gag Rules”) that unlawfully prevent employees from disclosing information concerning potential illegal conduct, wages, working conditions, or from engaging in political activity. Hamilton has also alleged that Juul Labs has required, and continues to require, employees to sign agreements, including separation agreements, that unlawfully require the release of claims under California law and that unlawfully prohibit persons from assisting in litigation.
Juul Labs expressly denies Hamilton’s claims and asserts that it has complied with all applicable laws. The Court has not rendered any opinion as to the ultimate merits of this case.
Summary of the Settlement
The settlement requires Juul to notify employees of their anti-gag rule rights under California law. It also requires Juul to modify its Gag Rules so that employees are free to whistle blow, speak, and compete in accordance with California law. The settlement prohibits Juul Labs from acting contrary to these freedoms.
The settlement also requires Juul to pay a gross settlement payment of $2,219,981.08 for alleged PAGA violations. However, $956,140.91 of this settlement amount will be forgiven over two years provided Juul Labs complies with its obligation to act consistently with California’s anti-gag rule. After any court-approved deductions for fees, costs, and service payments, and in accordance with a plan of allocation, 75% of the settlement amount will paid to the Labor Workforce and Development Agency (LWDA), and 25% will be paid to those California-based former employees employed on or after August 14, 2018. As noted above, payments to current employees are suspended and will eventually be forgiven so long as Juul complies with its settlement obligations.
Finally, the settlement releases and resolves the PAGA claims alleged in the case. The settlement does not release any individual claims by individual employees.
Certain pleadings relevant to the case, and the parties’ settlement agreement, are set forth below. If you would like to see additional pleadings, you can find all of the documents filed in this case on PACER (Public Access to Electronic Case Records) by searching the case name (Hamilton v. Juul Labs) or case number (3:20-cv-3710). If you have any questions about the case or the settlement, please contact our firm by filling out the below form, emailing us at JuulSettlement@bakerlp.com or calling 415.433.1064. DO NOT CONTACT THE COURT.