On May 10, a U.S. District Judge issued a judgement stating Steak ‘n Shake is responsible for paying $7.7 million in a federal overtime case. The burger chain recently lost the case in St. Louis.
In the case, managers alleged they worked sometimes 50-70 hours a week without receiving overtime compensation. In February, a jury awarded St. Louis-area managers about $3 million for lost overtime pay.
In his judgement, U.S. District Judge John A. Ross doubled the $3 million a jury awarded to 286 Steak ‘n Shake managers, reported the San Antonio Express-News. In addition to the initial award, Ross granted an additional $4.6 million to cover attorney’s fees and liquidated damages for the managers.
“Under the Fair Labor Standards Act, Judge Ross noted that employers found liable for not properly paying overtime can be on the hook for double damages unless they show they had "good faith and reasonable grounds" to think they weren't flouting the statute,” according to Law360.
The Express-News also reported Ross ordered the burger chain to pay “the managers’ lawyers almost $1.6 million in attorneys’ fees and about $40,000 in costs.” Initially, Brendan Donelon and Daniel Craig, the managers’ counsel, requested $1.8 million in fees.
The initial suit was filed in September 2014 after two St. Louis-based managers alleged Steak ‘n Shake “wrongly classified them as exempt from overtime requirements,” resulting in shorted pay, reported Law360. Over the next three years, the lawsuit grew into a class action lawsuit that included 286 managers.
Steak ‘n Shake legal issues are far from over. The chain has entered mediation with a group of about 1,300 managers in a similar suit. This group of managers is a part of the brand’s St. Louis group, but are based mostly in Illinois. A federal judge in Illinois transferred the case to a Missouri court after Steak ‘n Shake requested it was too similar to the current litigation in Missouri. Rather than toss the case out, the judge moved it to Missouri.
Biglari Holdings, Steak ‘n Shake’s parent company, plans to appeal the verdict, according to a May 3 Securities and Exchange Commission filing.
The five times weekly e-newsletter that keeps you up-to-date on the latest industry news and additions to this website.