Contract analysis

I. EXECUTIVE SUMMARY On November 1, 2022, Marisol Fuentes, a former production coordinator in the Unscripted Programming Division of Aurelius Media Americas Inc. ("AMA" or the "Company"), filed a putative class action complaint in the Superior Court of the State of California, County of Los Angeles, styled Fuentes v. Aurelius Media Americas Inc., Case No. 22STCV38214 (the "Complaint" or the "Action"). The Complaint a

II. CLIENT BACKGROUND A. Aurelius Global Media Group PLC (AGMG) Aurelius Global Media Group PLC ("AGMG" or the "Parent") is a United Kingdom-headquartered public media, entertainment, and e-commerce conglomerate. AGMG is listed on the London Stock Exchange under the ticker symbol AGMG and is registered with Companies House under Company No. 08412667. AGMG's principal offices are located at 34 Kingsway, London WC2B 6E

III. COMPLAINT OVERVIEW — SEVEN CAUSES OF ACTION The Complaint asserts seven causes of action against AMA. Each cause of action is summarized below, together with our preliminary assessment of the factual and legal basis for the claims. A. First Cause of Action: Failure to Provide Compliant Meal Periods (Cal. Lab. Code §§ 226.7, 512) The First Cause of Action alleges that AMA systematically failed to provide its non-

IV. NAMED PLAINTIFF PROFILE A. Marisol Fuentes (Lead Named Plaintiff) The lead named plaintiff, Marisol Fuentes, was employed by AMA as a Production Coordinator in the Unscripted Programming Division from March 14, 2019 through August 5, 2022. At the time of her separation, Ms. Fuentes earned an hourly rate of $28.50 per hour and was classified as a non-exempt, hourly employee. Ms. Fuentes resides at 4227 Los Feliz B

V. PUTATIVE CLASS DEFINITION AND SIZE A. Class Definition The Complaint defines the putative class as follows: All current and former non-exempt, hourly employees of Aurelius Media Americas Inc. who worked in the State of California at any time from November 1, 2018 through the date of preliminary approval of the class settlement (the "Class Period"). This is a broad class definition that encompasses all non-exempt,

VI. AMA CALIFORNIA PRODUCTION FACILITIES AMA operates seven production facilities in the State of California. During the Class Period, 14 distinct show units operated across these facilities under IWC Wage Order 12. There is significant variation in production schedules, shift lengths, and operational profiles across the facilities, reflecting the diverse nature of AMA's California operations — which range from studi

VII. PRELIMINARY EXPOSURE ANALYSIS A. Plaintiffs' Claimed Exposure Based on the Complaint and the PAGA notice, Plaintiffs' counsel has asserted aggregate claimed damages of approximately $38.6 million. The following table sets forth a breakdown of Plaintiffs' claimed exposure by category: Plaintiffs' total claimed exposure, after elimination of certain overlapping categories, is approximately $38.6 million. On a per-

VIII. TIMEKEEPING SYSTEM — NOVAPAY SOLUTIONS TIMETRACK PRO The Complaint's central factual allegation concerns AMA's electronic timekeeping system, which is identified as the NovaPay Solutions "TimeTrack Pro" platform. Because the timekeeping system and its configuration are at the heart of the claims — particularly the meal period and wage statement claims — we set forth below a detailed overview of the system, its

IX. KEY VULNERABILITIES Based on our preliminary review of the Complaint, AMA's internal records, and the TimeTrack Pro data, we have identified the following key vulnerabilities in AMA's position. A. Auto-Deduction System (HIGH RISK) The auto-deduction system is the most significant vulnerability in AMA's defense. California case law has increasingly disfavored auto-deduction policies that operate without a reliable

X. KEY DEFENSES Notwithstanding the vulnerabilities identified above, AMA has several strong defenses available. Our recommended strategy is to press these defenses aggressively in the early stages of the litigation to build leverage for a favorable resolution, whether through a certification denial, a narrowed class, or a mediated settlement. A. Compliance with *Brinker* The foundational defense to the meal and rest

XI. PAGA COMPONENT — SEPARATE ANALYSIS Given the significance of the PAGA component to AMA's overall exposure and the unique procedural and strategic considerations that attend PAGA claims, we provide a separate analysis of the PAGA issues below. PAGA Notice. The PAGA notice was filed with the LWDA on September 15, 2022. We have confirmed the filing through the LWDA's public online database. AMA confirms that it rece

XII. INSURANCE COVERAGE SUMMARY A. Employment Practices Liability Policy AMA's primary insurance response for the class action claims is the Employment Practices Liability ("EPL") policy issued by Pemberton Mutual Assurance Co., Policy No. PMA-EPL-2022-00837. The EPL policy provides coverage for claims arising out of employment-related wrongful acts, including wage-and-hour class actions, subject to a self-insured re

XIII. RECOMMENDED INITIAL STEPS Based on our preliminary assessment, we recommend the following initial steps to position AMA for an effective defense of this Action:

1. Litigation Hold. AMA should immediately implement a comprehensive litigation hold. A draft litigation hold notice has been prepared separately and is under review by AMA's legal department. The litigation hold should identify and notify all custodians who may possess documents, electronically stored information ("ESI"), or other materials relevant to the claims asserted in the Complaint. AMA should coordinate with

2. NovaPay Data Acquisition. AMA should obtain and review all TimeTrack Pro data for the entire Class Period (November 1, 2018 through the present) from NovaPay Solutions. This data should be obtained through a third-party subpoena or, if NovaPay cooperates voluntarily, through a direct data production request. The data acquisition should include, at a minimum: (a) all employee punch records (clock-in and clock-out t