Contract analysis

I. Purpose This memorandum sets forth the detailed scope of work for Dr. Catherine Lindstrom of Hargrove Analytics Inc., located at 515 S. Figueroa Street, Suite 1100, Los Angeles, California 90071, who has been retained pursuant to the Expert Retention Letter dated March 1, 2023 (Document 94 in this matter's document management system). This memorandum is intended to serve as the operative reference document governi

II. Background and Context A. Case Overview Fuentes v. Aurelius Media Americas Inc. is a putative class action filed by approximately 1,850 current and former non-exempt, hourly employees of AMA. The case encompasses employees who worked across seven California production facilities and fourteen distinct show units during the class period. Plaintiffs allege systematic wage-and-hour violations under the California Lab

1. Failure to Provide Compliant Meal Periods (Cal. Lab. Code §§ 226.7, 512) — Plaintiffs allege that AMA failed to provide timely, uninterrupted, and duty-free meal periods of not less than 30 minutes, as required by statute and Wage Order 12, and failed to pay the requisite one-hour premium for each noncompliant meal period.

2. Failure to Provide Compliant Rest Periods (Cal. Lab. Code § 226.7) — Plaintiffs allege that AMA failed to authorize and permit paid rest breaks of not less than 10 minutes per four hours of work (or major fraction thereof), and failed to pay the requisite one-hour premium for each missed or noncompliant rest period.

3. Failure to Pay Overtime (Cal. Lab. Code §§ 510, 1194) — Plaintiffs allege that AMA failed to compensate employees for all hours worked in excess of eight hours per day, forty hours per week, and for seventh-consecutive-day work, at the applicable overtime and double-time rates of pay.

4. Failure to Pay Minimum Wage (Cal. Lab. Code §§ 1197, 1197.1) — Plaintiffs allege that, as a result of the foregoing violations (particularly the failure to pay for off-the-clock work), AMA's effective hourly rate for certain shifts fell below the applicable state or local minimum wage.

5. Failure to Provide Accurate Wage Statements (Cal. Lab. Code § 226) — Plaintiffs allege that, as a derivative consequence of the unpaid wages and premiums described above, AMA's itemized wage statements failed to accurately reflect the total hours worked, gross wages earned, and all applicable deductions.

6. Waiting Time Penalties (Cal. Lab. Code §§ 201–203) — Plaintiffs allege that employees who separated from AMA during the class period were not timely paid all wages due at the time of separation, including unpaid meal and rest period premiums, entitling them to waiting time penalties of up to thirty days' wages.

7. Unfair Competition (Cal. Bus. & Prof. Code § 17200) — Plaintiffs assert an unfair competition claim predicated on the underlying wage-and-hour violations, seeking restitution and injunctive relief. In addition to the class claims, Plaintiffs have asserted representative claims under the Private Attorneys General Act ("PAGA") (Cal. Lab. Code §§ 2698–2699.8). The PAGA notice was filed with the Labor and Workforce De

III. Data Sets to Be Provided The following data sets will be compiled and provided to Dr. Lindstrom. Calderwood & Harkness will coordinate the collection and production of these materials and will endeavor to deliver a substantially complete initial data package by March 31, 2023. Dr. Lindstrom should review the materials as received and promptly identify any data gaps, quality issues, or additional data needs. A. N

1. Punch Records. All clock-in and clock-out records for AMA non-exempt employees at all seven California facilities for the period November 1, 2018 (or the earliest available date in TimeTrack Pro, which is January 1, 2019 — the system implementation date) through the present. This data set should include, at a minimum, the following fields for each punch event: employee ID, date, time of punch, punch type (clock-in

2. Auto-Deduction Records. All records reflecting the application of the automatic 30-minute meal period deduction to employee time records, including the following fields: date of deduction, employee ID, facility code, shift start time, shift end time, deduction amount (in minutes and as a dollar value, if recorded), and a flag or indicator showing whether the deduction was overridden by a Missed Meal Attestation su

3. Missed Meal Attestation Records. All records reflecting the use of the Missed Meal Attestation feature by AMA employees, including the following fields: date of attestation, time of attestation submission, employee ID, facility code, reason code (if any), and a flag or indicator showing whether a meal period premium was subsequently paid as a result of the attestation. This data set will serve as the primary basis

4. System Configuration Logs. Historical system configuration logs showing when the Auto-Deduction Feature was initially configured, the threshold settings applied (six hours versus five hours), and when and where the Missed Meal Attestation feature was activated or deactivated at each facility. These logs should include dates of any changes to the configuration, the identity of the individual who made the change (if

5. Payroll Summary Reports. Aggregate payroll data for AMA's California non-exempt employees, broken down by pay period and by facility, including the following data fields: total gross wages, total overtime wages (at 1.5× and 2× rates, separately if available), total meal period premiums paid, total rest period premiums paid, total regular hours, and total overtime hours. These summary reports will provide a high-le

1. Employee Roster. A complete list of all non-exempt, hourly employees employed at any of AMA's seven California facilities at any time during the class period (November 1, 2018 through the present), including the following data fields for each employee: full legal name, employee ID number, date of hire, date of separation (if applicable), job title(s) held during the class period, hourly rate(s) of pay, facility as

2. Hourly Rate History. Historical hourly wage rates for each non-exempt employee, by pay period, throughout the class period. This data is essential to enable accurate calculation of meal period and rest period premiums, which are computed at one hour of pay at the employee's "regular rate of pay" as defined under California law. To the extent employees received raises, shifted between job classifications, or were s

3. Overtime Records. Detailed records of overtime hours worked by each non-exempt employee, by pay period, throughout the class period. These records should distinguish between regular overtime (hours in excess of eight per day or forty per week, paid at 1.5× the regular rate), double-time (hours in excess of twelve per day, or hours worked on the seventh consecutive day in a workweek after the first eight hours, pai

4. Meal Period Premium Payment Records. Complete records of all meal period premiums actually paid by AMA to non-exempt employees during the class period. This includes premiums triggered by the Missed Meal Attestation feature as well as premiums paid through manual, supervisor-initiated payroll corrections. This data is critical to ensure that Dr. Lindstrom's alternative damages model properly credits AMA for premiu

5. Rest Period Premium Payment Records. All records of rest period premiums paid to non-exempt employees during the class period. Although AMA's records of rest period compliance may be limited (rest periods are not typically tracked in the same manner as meal periods, as employers are required to authorize and permit rest periods but not to ensure they are taken), any records of premiums paid will be relevant to Dr.

6. Production Schedules / Call Sheets. A representative sample of daily production schedules (commonly referred to as "call sheets" in the motion picture industry) for each of AMA's fourteen show units. The sample should cover at least four representative weeks per show unit per year of the class period, selected to capture variation across different production phases and seasons. Call sheets are the primary document

7. Employee Separation Data. Dates and reasons for separation for all non-exempt employees who separated from AMA during the class period. Separation reasons should be categorized as voluntary resignation, involuntary termination (with or without cause), end of show/season (a common separation event in the entertainment industry, where employment is frequently tied to the duration of a particular production), layoff,

1. Named plaintiffs' interrogatory responses regarding their individual damages calculations and work experiences, including any supplemental responses served during the course of discovery. These responses will provide insight into the factual bases for Plaintiffs' claims and may reveal the specific assumptions underlying their damages theories.

2. Any damages-related documents produced by Plaintiffs in response to AMA's discovery requests, including any spreadsheets, calculations, or summaries prepared by or on behalf of Plaintiffs in quantifying their claimed damages. D. Expert Materials The following expert materials will be provided to Dr. Lindstrom as they become available:

1. Dr. Howard Rennick's Expert Report. Dr. Rennick's expert report is anticipated to be served on or about April 28, 2023. This report will be the primary target of Dr. Lindstrom's rebuttal analysis and should be reviewed promptly upon receipt.

2. Dr. Rajesh Makhija's Expert Report. Dr. Makhija, of Workforce Dynamics Consulting LLC, has been separately retained as AMA's expert on commonality and typicality issues. His expert report is anticipated by May 19, 2023. Dr. Makhija's report will be provided to Dr. Lindstrom for coordination purposes, to ensure that Dr. Lindstrom's damages analysis is consistent with Dr. Makhija's findings regarding variability acr

3. Deposition Transcripts. Transcripts of the depositions of the three named plaintiffs — Maria Fuentes (scheduled May 2, 2023), Brian Halloran (scheduled May 9, 2023), and Jessica Padilla (scheduled May 16, 2023) — and the depositions of AMA's designated Person Most Knowledgeable ("PMK") witnesses (Lorraine Okafor, Robert Arroyo, and Karen Fong) will be provided to Dr. Lindstrom as they become available. These trans

IV. Analytical Methodology A. Primary Task: Rebuttal of Plaintiffs' Damages Model Upon receipt of Dr. Rennick's expert report, Dr. Lindstrom should prepare a comprehensive, detailed critique of the damages model presented therein. Based on our anticipation of the methodological approach Dr. Rennick is likely to employ, we identify the following specific areas of focus for Dr. Lindstrom's rebuttal analysis. These area

1. Meal Period Auto-Deduction Assumption. The centerpiece of our anticipated rebuttal is the challenge to Dr. Rennick's expected assumption that every auto-deducted meal period in the TimeTrack Pro system constitutes a "missed" meal period for which a one-hour premium is owed. This assumption conflates the existence of an auto-deduction with evidence of a violation — a fundamental analytical error. The Auto-Deduction

2. Failure to Account for Premiums Already Paid. Dr. Lindstrom should verify whether Dr. Rennick's damages model properly credits AMA for meal period premiums already paid during the class period, both through the Missed Meal Attestation system (at the four facilities where it was active) and through manual supervisor-initiated payroll corrections. If Dr. Rennick does not credit these payments — either by failing to

3. Rest Period Violation Rate. If Dr. Rennick assumes a rest period violation rate in his damages model, we anticipate that the rate will be derived primarily or exclusively from the declarations and deposition testimony of the three named plaintiffs, rather than from any systematic empirical analysis of class-wide rest period practices. Dr. Lindstrom should critique the statistical and methodological inadequacy of e

4. Off-the-Clock Work Assumption. If Dr. Rennick assumes a uniform amount of off-the-clock work per shift — and we anticipate he will assume 30 to 45 minutes of unpaid pre-shift and post-shift work per shift, based on named plaintiff declarations — Dr. Lindstrom should critique the absence of any empirical support for this assumption beyond the self-interested testimony of the named plaintiffs. Dr. Lindstrom should f

5. Facility-Level Variation. Dr. Lindstrom should analyze whether Dr. Rennick's model accounts for — or, more likely, ignores — the significant differences across AMA's seven facilities and fourteen show units. If Dr. Rennick treats all facilities and show units as homogeneous for purposes of his damages calculation, Dr. Lindstrom should demonstrate that this approach is analytically unsound. Specifically, Dr. Lindst

6. Overtime Rate Calculation. If Dr. Rennick uses an inflated overtime rate in his damages model — for example, by assuming that all off-the-clock work falls in overtime hours (i.e., hours in excess of eight per day), such that the unpaid time is valued at 1.5× or 2× the regular rate — Dr. Lindstrom should present the correct blended rate calculation. The correct approach requires determining, shift by shift, whether

7. PAGA Penalty Calculation. If Dr. Rennick calculates PAGA penalties at the maximum statutory rate — $100 for the initial violation and $200 for each subsequent violation, per pay period, per employee — Dr. Lindstrom should present an alternative PAGA analysis that accounts for the court's broad discretion to reduce PAGA penalties. Under California Labor Code section 2699(e)(2), the court may, in its discretion, awa

1. Estimate Actual Meal Period Violation Rate. Using the Missed Meal Attestation data from the four facilities where the feature was activated, Dr. Lindstrom should extrapolate a defensible estimate of the actual rate at which employees missed compliant meal periods during the class period. We identify three potential methodological approaches, which should be presented as a range of estimates: • Direct Use of Attest

2. Calculate Meal Period Premiums. For each estimated meal period violation, Dr. Lindstrom should calculate the one-hour premium owed at the applicable employee's "regular rate of pay" as defined under California law. The regular rate calculation should use the historical hourly rate data obtained from AMA (as described in Section III.B.2 above) and should account for any changes in an employee's rate of pay during t

3. Calculate Wage Statement Penalties. To the extent that meal period violations are established — and to the extent that the resulting unpaid premiums rendered AMA's itemized wage statements inaccurate — Dr. Lindstrom should calculate the derivative wage statement penalties under California Labor Code section 226. The statutory penalty is $50 for the initial violation and $100 for each subsequent violation, assessed

4. Calculate Waiting Time Penalties. For employees who separated from AMA during the class period and who were owed unpaid meal period premiums at the time of their separation, Dr. Lindstrom should calculate waiting time penalties under California Labor Code sections 201 through 203. The maximum waiting time penalty is up to 30 days' wages, calculated at the employee's daily rate of pay at the time of separation. Dr.

5. Calculate PAGA Penalties. Dr. Lindstrom should calculate PAGA penalties at the statutory rate ($100 initial / $200 subsequent, per pay period, per employee) for each category of violation established by the damages model. However, consistent with the rebuttal analysis described in Section IV.A.7 above, the PAGA penalty calculation should be presented in a manner that facilitates and supports judicial discretion to

6. Exclude Non-Certified Claims (Contingency Analysis). The alternative damages model should be prepared in a modular format that allows individual categories of claims to be included or excluded depending on the outcome of the class certification ruling and any subsequent rulings on the scope of certified claims. Specifically, Dr. Lindstrom should prepare separate, independently calculable modules for each of the fo

V. Coordination with Defense Team A. Coordination with Dr. Rajesh Makhija (Workforce Dynamics Consulting LLC) Dr. Rajesh Makhija of Workforce Dynamics Consulting LLC has been separately retained as AMA's industrial/organizational psychology expert on issues of commonality, typicality, and predominance in connection with the class certification motion. Dr. Makhija's retention is governed by a separate Expert Retention

VI. Deliverables and Timeline The following table sets forth the deliverables expected of Dr. Lindstrom, together with the applicable due dates and relevant notes. All dates are subject to adjustment based on changes to the court's case management schedule, delays in data production, or other unforeseen circumstances. Any anticipated delay should be communicated to Devon Archer as promptly as possible.

VII. Budget and Administrative Matters A. Fee Estimate The following table summarizes the estimated fees for Dr. Lindstrom's engagement, broken down by personnel category: This estimate is based on the assumption that Dr. Lindstrom will receive a substantially complete initial data set from NovaPay Solutions and AMA by approximately March 31, 2023, and that the data will be in a reasonably clean, analyzable format th

VIII. Confidentiality and Privilege All materials provided to Dr. Lindstrom in connection with this engagement — including client documents, discovery materials, data sets, deposition transcripts, expert reports, and communications with counsel — are subject to the attorney-client privilege, the work product doctrine, and the Stipulated Protective Order entered by the Honorable Raymond Escobedo on February 15, 2023,

IX. Conclusion Dr. Lindstrom's engagement as AMA's economics and damages expert is a critical component of AMA's defense strategy in Fuentes v. Aurelius Media Americas Inc. Her work will be central to both the class certification phase — where the alternative damages model and the critique of Dr. Rennick's methodology will be essential to demonstrating that individualized damages issues predominate over common questi