Modesto’s Pacific Southwest Container agrees to $2.3M settlement in wage-theft lawsuit

Pacific Southwest Container in Modesto, Calif., on Wednesday, March 7, 2018.
Pacific Southwest Container in Modesto, Calif., on Wednesday, March 7, 2018. aalfaro@modbee.com

Pacific Southwest Container — the Modesto-based company that provides packaging to such industries as snack foods, high-tech and wine, while employing more than 1,000 people — has agreed to settle a wage-theft lawsuit filed against it for $2.3 million.

Stanislaus Superior Court Judge Marie Sovey Silveira issued an order in July granting preliminary approval of the class-action settlement, writing that it “appears to be fair, adequate and reasonable ... and falls within the range of reasonableness that could ultimately be granted final approval by the Court.”

A final approval and settlement fairness hearing is scheduled for Nov. 19 before Silveira.

The lawsuit was filed in January 2018 and named Pacific Southwest Container employee Erasmo Sanchez as the plaintiff, but the lawsuit said other employees also were affected. Court documents identify 1,489 current and former hourly employees, including temporary workers, who are subject to the potential settlement.

The settlement covers Jan. 23, 2014, through July 16, 2019, and calls for the 1,489 workers to receive $1.45 million. That is 63 percent of the $2.3 million and works out to an average of $973 per employee. But because that’s an average, the actual amounts would vary among employees, based on such factors as how long someone has worked for Pacific Southwest Container.

The workers’ attorneys could receive as much as 33 percent of the $2.3 million, or $766,667, according to court filings. The balance of the settlement would cover other costs.

There are several steps that need to be completed before the final hearing on Nov. 19, including notifying the workers affected by the proposed settlement and giving them the chance to opt out and to speak in favor of or against the settlement at the Nov. 19 hearing.

Sanchez is represented by the Southern California law firms of David Yeremian & Associates and United Employees Law Group, while Pacific Southwest Container is represented by the Fresno office of Littler Mendelson. Attorneys for both sides did not respond to multiple requests seeking comment.

A Pacific Southwest Container official would not speak at length about the proposed settlement. “It’s pending litigation,” said Blake Steward, senior vice president for human resources. “We consider it pending litigation, and we don’t comment on pending litigation.”

The allegations in the lawsuit against Pacific Southwest Container include that it underpaid employees by “rounding down” the time they actually worked on their time cards; that while employees clocked out for required breaks, they actually worked through their breaks to stay on schedule; and that the company miscalculated employees’ overtime, resulting in them receiving less money than what was owed them.

Pacific Southwest Container denies the allegations, according to court records, and said it “has properly, timely and fully paid all earned wages, (and) it did not require employees to work without pay.”

Lawyers for the workers claim in court filings that Pacific Southwest Container’s total liability in this lawsuit is $9.6 million and the proposed settlement represents about a quarter of that.

The lawyers for the workers also wrote that the settlement is in everyone’s best interests. “Given the high level of risk present for both sides, and the substantial uncertainty and expense of protracted litigation, the parties elected to mediate Plaintiff’s claims and explore settlement, which they achieved,” the lawyers wrote.

Pacific Southwest Container started in Modesto in 1973, according to its website, and has four locations, three in Modesto and one in Visalia. It employs more than 1,000 people, again according to its website, and its customers includes the wine, snack foods, agriculture, retail and high tech industries.

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Kevin Valine covers local government, homelessness and general assignment for The Modesto Bee. He is a graduate of San Jose State University and grew up in San Jose.