In May 2022, real party in interest Jessica Garcia (Garcia) filed a third amended consolidated class action complaint against her former employer, petitioner The Merchant of Tennis, Inc. (Merchant), for failure to pay wages in violation of various provisions of the California Labor Code, and other employment-related violations under federal and state law. In May and June 2024, Merchant entered into approximately 954 individual settlement agreements (ISAs) with employees to give up their wage and hour claims against Merchant in exchange for cash payments. Merchant paid over $875,000 in cash payments to former and current employees.
Garcia moved for class certification in May 2024. She also filed a motion to invalidate the ISAs, insisting they were obtained by Merchant through coercion and fraud. The trial court did not grant the motion to invalidate the ISAs in total but agreed that the ISAs were voidable. It ordered the parties to meet and confer regarding a curative notice to be sent to all putative class members advising that they could revoke their ISAs and join the class action lawsuit. The parties could not agree on the language of the curative notice. A hearing was held on February 28, 2025, at which the trial court ruled on the curative notice to be sent to all putative class members who had signed ISAs. The trial court ruled that the curative notice did not need to include that if the parties chose to revoke their ISAs, they may have to pay back the settlement amount if Merchant prevailed. It did advise the class members that the amount of recovery, should they prevail, may be offset by the settlement payments. The trial court agreed to stay its order on the curative notice until March 31, 2025, in order for Merchant to seek review.
Merchant filed a petition for writ of mandate (Petition) asking this court to issue a peremptory writ of mandate directing the trial court to vacate its February 28, 2025, ruling; that the trial court be instructed to comply with California’s rescission statutes, Civil Code sections 1689 and 1691, as part of the curative notice; that the trial court be instructed the curative notice must inform putative class members that if they revoke their ISAs to join the class action lawsuit, they are required to immediately return the settlement payment. Merchant requested a further stay of the trial court’s order until the issue has been resolved by this Court, which we granted. We then issued an order to show cause why relief should not be granted.
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