Noodles & Co. Will Pay $3 Million to Settle Overtime Claims

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By Kevin McGowan

Noodles & Company will pay $3 million to settle the overtime pay claims of a nationwide class of assistant general managers who said they were wrongly classified as exempt employees under the Fair Labor Standards Act ( Castillo v. Noodles & Co. , N.D. Ill., No. 16-3036, settlement approved 12/23/16 ).

A federal district court in Chicago Dec. 23 approved the agreement between the restaurant chain and four named plaintiffs to create a settlement fund for assistant general managers who worked for Noodles & Company at any time from Nov. 23, 2013, through Nov. 23, 2016.

Only eligible workers who “opt in” to the FLSA collective action will receive monetary awards.

Wrongly Called ‘Exempt.’

Overtime pay lawsuits by employees called store managers, assistant store managers or similar titles aren’t unusual against retailers, including restaurants, department stores and convenience stores.

Such employees, who often work more than 40 hours a week but aren’t paid overtime for their extra hours, claim they are wrongly classified as exempt from the FLSA.

Their employers argue the salaried workers are managers properly placed within the FLSA’s “white-collar” exemption. But the employees contend their job duties don’t differ much from those of hourly workers and they exercise little or no managerial discretion.

Notable recent cases include Bob Evans Farms Inc.'s $16.5 million settlement of its restaurant assistant managers’ overtime pay claims and Panda Express Inc.'s $3 million settlement of its store managers’ claims.

Outside the restaurant industry, Kmart Corp. reached a $3.8 million settlement of assistant store managers’ overtime pay claims while Dick’s Sporting Goods Inc. settled for $10 million the overtime claims of its assistant store managers.

The Labor Department in fiscal 2016 obtained approximately $39.8 million in monetary relief for 44,707 food service workers alleging unpaid overtime or other FLSA violations, according to department statistics.

Lawyers Will Receive $1 Million

Judge Andrea Wood, in the Noodles & Company case, upheld $1 million in attorneys’ fees for the workers’ lawyers, to be paid from the settlement fund. The lawyers also will recover $32,621 for their litigation costs.

Four named plaintiffs will receive $10,000 each for their parts in litigating the case.

Noodles & Company doesn’t admit any FLSA violations by agreeing to the settlement.

An attorney for the workers declined to comment Dec. 28. The company and its attorneys weren’t immediately available for comment.

Outten & Golden LLP, Shavitz Law Group PA and Rowdy Meeks Legal Group LLC represented the workers. Jackson Lewis PC represented Noodles & Company.

To contact the reporter on this story: Kevin McGowan in Washington at kmcgowan@bna.com

To contact the editors responsible for this story: Peggy Aulino at maulino@bna.com; Terence Hyland at thyland@bna.com; Christopher Opfer at copfer@bna.com

Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.

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