Last week Red Robin agreed to pay $2.95 million to settle claims from a class of kitchen managers who claimed to be incorrectly exempted from overtime pay, despite routinely performing the work of non-exempt employees.
The nearly 500 workers asked a New York federal court to approve a settlement agreement with Red Robin International Inc. that would end three years of litigation accusing the burger chain of failing to pay overtime wages to managers and assistant managers in the kitchen, according to a memorandum.
Red Robin has denied the allegations and has at all times disputed the claims. However, the parties agreed to resolve the suit after three mediation sessions and a brief pause due to Red Robin's financial uncertainty during the early days of the COVID-19 pandemic, according to Tuesday's memorandum. Both parties accepted a mediator's proposal on March 28 and a formal agreement was executed on May 31.
Eric Outlaw originally filed suit in August 2018 alleging that Red Robin violated the Federal Labor Standards Act and New York labor law by failing to pay assistant managers overtime when they worked more than 40 hours a week and for failing to maintain accurate and sufficient time records, according to the complaint.
The assistant managers alleged Red Robin failed to provide them with a labor budget to cover the cost of hiring enough non-exempt employees needed to complete a day's work. The managers claim this resulted in them picking up the slack and working more than 40 hours a week without being fairly compensated.
The $2.95 million settlement resolves claims for 498 current and former assistant managers, as well as for 45 New York class members not a part of the original FLSA collective who will get $150,000 from the gross settlement. Class counsel also seeks nearly $1 million in attorney fees.
The class is made up of Red Robin managers and assistant managers who worked at the restaurant between August 2012 and March 2020 and who haven't already participated in a previous settlement from 2016.