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Five Guys and California Plaintiff’s Fifth Agreement Nearing Settlement

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A fifth agreement has been hammered out between a former Five Guys California employee and the burger chain stemming from a class action lawsuit in California and proposed settlement back in October 2018.

Santa Clara, CAA class action lawsuit alleging the Five Guys violated California labor laws by denying its workers breaks and overtime pay has reached a fifth proposed settlement. The $1.2 million deal involves 2,206 non-exempt workers at the gourmet burger chain.

In a brief filed April 13, 2023, the Five Guys employees urged U.S. District Judge Jennifer Thurston to green light the settlement -- seven months after they received preliminary approval of the deal, reported Law360

Back in 2017, plaintiff Jeremy Lusk worked as an hourly, non-exempt, manager-in-training at a Five Guys establishment in California from August to November 2016. He filed a class action in the U.S. District Court for the Eastern District of California, accusing Five Guys of:
  • Failing to provide workers with paid meal breaks and rest breaks as it was too busy.
  • Failing to pay overtime: workers were required to perform work off the-clock as they would have to clock out but continue to perform work, such as counting out the cash register, which may take up to twenty minutes
  • Failing to reimburse workers for using their personal vehicles to perform their job duties, such as travelling to and from other restaurants owned by Defendants to pick up food and supplies
  • Failing to pay them for overtime work or properly represent their wages in mandatory wage statements.
  • Obtaining workers’ (Lusk and class members) employment applicants’ authorization to procure background check reports through the use of a disclosure form that did not comply with the Fair Credit Reporting Act (FCRA),the California Consumer Credit Reporting Agencies Act( CCRAA) or  Investigating Consumer Reporting Agency Act (ICRAA)requirements.

Too High, Too Low

This proposal is the fifth due to the judge’s questions on the four previous occasions, mainly because the California federal judge found that the description of the settlement agreement in the motion briefing was not the same as the actual proposed settlement terms.
  • December 2019: The first settlement proposal was rejected. U.S. Senior District Judge Anthony Ishii determined that the plaintiff wasn’t able to show that the proposed settlement agreement provided adequate relief or that enough discovery was conducted before entering the settlement agreement. And proposed attorneys’ fees tallied up to one-third of the settlement, which is way over the Ninth Circuit’s benchmark of 25 percent.
  • May 2020: The settlement was denied again. The court concluded that the first settlement presented to the court was “simply reused,” after it was rejected. According to the motion brief filed by Lusk, the class action settlement of $760,000 translated to each class member receiving an average of $344.51, and $300,000 awarded in attorneys’ fees. But the proposed settlement agreement terms indicated that the class payment would not equal more than $600,000 with $299.18 being paid to each Class Member. Additionally, the proposed settlement agreement stated that attorneys’ fees could equal $420,000, while the proposed class notice said the fees would be $400,000.
  • October 2020: new proposed terms would give each class member nearly $50 more than the terms the court previously rejected, and the attorney fees were reduced. But the terms submitted to court failed to reflect the increase and decrease, so it was back to the drawing board. “It appears to the Court that in Plaintiff’s second motion for preliminary approval, Plaintiff simply reused the copies of the proposed settlement agreement and the proposed class notice that Plaintiff presented to the Court in the first motion for preliminary approval — even though the Court explicitly rejected certain terms in the first proposed settlement agreement and first proposed class notice, such as the attorney’s fees award,” Judge Ishii said in his order, and reported by Top Class Actions.
  • September 2022: Judge Ishii that the workers gave sufficient answers in their fifth motion for preliminary approval.
  • May 2023: With the new agreement of $1.2 million, each claimant could receive up to $900, dependent on the final plaintiffs’ legal fees. (Setareh Law Group attorneys justify their fees because “they spent significant time brokering the settlement, reviewing "hundreds of pages of documents, as well as payroll and timekeeping data," as part of the negotiation process, according to Law360.)


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