Daily Labor Report®

Panera Bread Franchisee, Managers Secure $4.6 Million Wage Deal

June 1, 2020, 4:31 PM

A $4.6 million deal between Covelli Enterprises Inc.—the nation’s top Panera Bread franchisee—and more than 900 assistant managers who alleged Fair Labor Standards Act and Ohio overtime violations won final approval from a federal judge, after some modifications.

Judge James S. Gwin cut about $100,000 from class counsel’s attorney fee award, approving them to receive roughly $1.43 million instead of the $1.54 million requested, according to the approval order entered May 29 in the U.S. District Court for the Northern District of Ohio.

Class counsel had requested one-third of the $4.6 million total fund, which allocates $900,000 to the Ohio class members and $3.75 million to FLSA collective members.

But the Ohio class likely won’t receive all $900,000 because the settlement allows their unclaimed funds to revert back to Covelli, and only 47% of the 497 members submitted claims, Gwin noted. Taking that into account, the “actual class and collective benefit” is roughly $4.1 million.

As such, class counsel should only receive 30% of the “appropriate” settlement value, which is around $4.3 million, Gwin said. This is the “midpoint” between the available and actual funds.

Additionally, Gwin only approved about $53,000 for litigation expense reimbursement, instead of the $100,000 requested. He also reduced the collective and class representative service awards from $30,000 to $17,000.

The lawsuit, filed in January 2018, accused Covelli of misclassifying Panera assistant managers as exempt from FLSA and Ohio overtime rules. Covelli, which owns and operates more than 300 Panera locations in eight states, later reclassified these employees as non-exempt.

A final fairness hearing took place in February. No class member has objected to or opted out of the deal.

Outten & Golden LLP, Shavitz Law Group PA, Merriman Legando Williams & Klang LLC, Karon LLC, and Wolf Haldenstein Adler Freeman & Herz LLP represent the class and collective. Ice Miller LLP represents Covelli.

The case is Kis v. Covelli Enters., 2020 BL 200598, N.D. Ohio, No. 4:18-cv-54, 5/29/20.

To contact the reporter on this story: Kathleen Dailey at kdailey@bloomberglaw.com

To contact the editor responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com

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