Teracom Settles $900K Class Action Over Labor Violations

Case Background

Franco Rangel, a former hourly employee, filed a class action against TERRACOM SERVICES, LLC. He worked for the company in California and alleged systemic labor law violations. TERRACOM, based in Arizona, operated within California using hourly non-exempt employees. The lawsuit, filed in the San Bernardino County Superior Court, covers employees from January 30, 2019, onward. Rangel sought to represent all similarly affected workers across various job sites in the state.

Cause

Rangel claimed that TERRACOM failed to follow California labor laws. He said the company did not pay proper overtime or minimum wages to hourly workers. It also allegedly denied meal and rest breaks or failed to compensate for missed breaks. According to the complaint, the company issued inaccurate wage statements, violating statutory requirements. Further, TERRACOM reportedly failed to reimburse employees for necessary job-related expenses, breaching California Labor Code §2802. The suit also raised concerns about broader unfair business practices under California’s Business and Professions Code §17200.

Injury

Rangel and other employees allegedly suffered financial harm. They worked long hours without fair pay. Missed meal and rest periods added to the strain. Inaccurate wage statements confused employees about their actual earnings and deductions. The lack of expense reimbursements meant workers bore business costs themselves. These ongoing violations created economic and emotional stress for many.

Damages

The complaint sought damages, penalties, and full restitution. Rangel asked for recovery of unpaid wages and compensation for missed breaks. He also demanded reimbursement for unreimbursed expenses and interest on delayed payments. In addition, he pursued civil penalties under the Private Attorneys General Act (PAGA) and attorney’s fees. The complaint requested injunctive relief to stop ongoing violations and prevent future harm.

Key Arguments and Proceedings

Legal Representation

Plaintiff(s): Franco Rangel
Counsel for Plaintiff: Boyamian Law, Inc. | M. Stephen Rinka
Defendant(s): Teracom Services, LLC
Counsel for Defendants: Littler Mendelson

Claims

The lawsuit outlined nine causes of action:

Failure to pay overtime wages
Failure to pay minimum wages
Failure to provide meal periods
Failure to authorize and permit rest periods
Failure to furnish accurate itemized wage statements
Violation of Labor Code §203 (wages due at termination)
Violation of Labor Code §2802 (expense reimbursement)
Unfair business practices (Cal. Bus. & Prof. Code §17200)
Civil penalties under PAGA

Rangel requested a jury trial to resolve these claims.

Defense

ERACOM SERVICES, LLC issued a sweeping denial of all material allegations in Franco Rangel’s class action complaint. The company asserted that neither Rangel nor any potential class member suffered losses due to its actions. It challenged the scope of the proposed class and contended that the plaintiff could not meet the legal prerequisites for class certification. TERACOM argued that its policies complied with California labor laws and that any alleged violations were either inadvertent, made in good faith, or resulted from the plaintiff’s own conduct or choices.

The company advanced 74 affirmative defenses, ranging from procedural objections—such as failure to state a claim, statute of limitations, and lack of standing—to constitutional challenges, equitable defenses like waiver, estoppel, and unclean hands, and technical labor code defenses. It also contested the manageability of the case as a class or PAGA action, denied the existence of uniform unlawful policies, and maintained that it provided and authorized required breaks. Ultimately, TERACOM requested dismissal of the complaint, denial of class certification, and recovery of its legal costs.

Settlement

Class Action Settlement Summary

The court granted final approval of a $900,000 class action settlement between Plaintiff Franco Rangel and Defendant Teracom Services, LLC. The certified class includes all current and former non-exempt hourly employees—such as Field Technicians—who worked in California from January 30, 2019, to December 19, 2024.

The court found the notice procedure legally sufficient and compliant with due process. From the total settlement, the court approved:

$326,844.00 for Class Counsel’s attorneys’ fees and costs
$10,000.00 as an enhancement payment to class representative Franco Rangel
$5,950.00 to the Settlement Administrator
$25,000.00 in civil penalties under PAGA, with $18,750.00 going to the LWDA and $6,250.00 to Aggrieved Employees

The court concluded that the terms were fair, adequate, and reasonable for all class members.

Court Documents

Court documents are available for purchase upon request at Jurimatic@exlitem.com