St. Louis Record

Saturday, September 21, 2019

Judge reduces attorneys fees in Steak N' Shake managers class action case


By Takesha Thomas | May 20, 2019

ST. LOUIS – A federal judge has amended part of a nearly $3 million award involving a class action suit filed by managers of Steak N' Shake restaurants.

On May 10, Judge John A. Ross for the U.S. District Court for the Eastern District of Missouri Eastern Division granted the class action plaintiffs' request to alter judgment involving attorneys' fees and liquidation damages based on the Fair Labor Standards Act (FLSA). 

Sandra Drake and Randy Smith filed a 2014 complaint alleging that Steak N' Shake (SnS) failed to pay overtime wages to managers. In February, 275 class action members were awarded $2.8 million under the Missouri Minimum Wage Law and 11 FLSA class members were awarded $154,988.22.

Ross amended the hourly rate for attorneys representing the plaintiffs. The plaintiffs' attorneys sought to charge between $575 and $550 per hour for a total of $1.8 million. Steak N' Shake argued that, while it was undisputed the number of hours charged, the rate was unreasonably high. 

"The court agrees that the fees are somewhat too high for this district, given all of the factors, and should be adjusted," Ross wrote, ruling that the rate should be reduced to $500 for Brendan J. Donelon and $475 for Daniel Craig, both of Donelon PC in Kansas City.

Regarding liquidation damages under the FLSA, the plaintiffs argued that SnS willfully violated the law when it failed to pay overtime rates to managers. They argued that based on the FLSA, SnS should not only be held liable, but also be charged "an additional equal amount as liquidated damages,” the ruling states

SnS claims that it “acted in good faith and had reasonable grounds for believing that its managers were performing [exempt work]," the ruling states.

Ross, however, found that Steak N' Shake did not act in "good faith" when it failed to pay overtime to managers. 

"The evidence at trial showed that SnS's primary solution for understaffed stores was to use salaried managers working overtime and that SnS must have known that those managers were simply too busy performing production and service duties to meet the definitions for exempt employees. Thus, SnS’s failure to pay overtime was not a good faith mistake. Accordingly, the court will amend its judgment to award Plaintiffs liquidated damages under the FLSA in an amount equal to the jury’s $154,988.22 award," Ross wrote.

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