A “Pick-Up-Stix campaign” is a legal strategy used by an employer or a company facing a class action lawsuit. Its main goal: to reach individual settlements with putative class members before class certification. By doing so, the company may try to avoid legal exposure and media coverage, minimize attorneys' fees, limit participation in the lawsuit, and maintain its standard operations.
The name “Pick-Up-Stix campaign" comes from the 2009 lawsuit, Chindarah v. Pick Up Stix, Inc., where employees of the restaurant chain, Pick Up Stix, alleged that their employer intentionally misclassified their job titles to avoid paying them overtime wages. In response, Pick Up Stix offered individual settlement payments to putative class members for less than what they were claiming was owed. Those who accepted the offer gave up their right to participate in the class action and pursue any future claims or lawsuits based on the same alleged violations. Despite challenges in court, the California Court of Appeal confirmed that employers may settle genuinely disputed wage claims with putative class members, even without the involvement of class counsel, provided appropriate steps are followed and the communications meet certain standards.
A company may choose this route when faced with a class action lawsuit, in an effort to control its exposure and disrupt the class certification process. By settling with individual members of a class (or potential class) over a good-faith dispute, companies can attempt to "shortcut" their way to a resolution.
Any California employee who is offered an individual settlement agreement should be fully informed before signing it. This is particularly true when the offer is part of a Pick-Up-Stix campaign designed to reduce participation in a pending class action. Employees may be drawn to this type of settlement because it offers a quick and "easy" means to receive a payment when a class action case is pending. However, when signing a “Pick-Up-Stix” settlement, an employee may also give up the right to participate in the pending class action and seek additional recovery for the released claims. As a result, employees are extremely limited in their ability to seek additional compensation after accepting the Pick-Up-Stix payment. Most importantly, an employee may be settling for far less than what they are actually owed under California wage-and-hour laws.
If you have been offered an individual settlement—whether in a class action lawsuit or as part of a separation from employment—contact our lawyers and learn about your rights under California law. Call 805-628-8220 today!
This article is for general informational purposes only and is not legal advice. Reading this article does not create an attorney-client relationship.