Case 2:16-cv-01402-NBF Document 69 Filed 04/16/18 Page 1 of 37
UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA
CHELSEA KOENIG, on behalf of herself and all others similarly situated, Civil Action No. 16-1402 Plaintiff, Hon. Nora Barry Fischer
v.
PRIMANTI CORPORATION D/B/A PRIMANTI BROS.; DAVID HEAD; ANDREW TAUB; DEMETRIOS PATRINOS; JAMES CHU; NICHOLAS NICHOLAS; and DOE DEFENDANTS 1-10,
Defendants.
DECLARATION OF GERALD D. WELLS, III IN SUPPORT OF PLAINTIFF’S MOTION FOR FINAL APPROVAL OF CLASS AND COLLECTIVE ACTION SETTLEMENT
I, Gerald D. Wells, III, declare as follows:
1. I am a founding member of the law firm of Connolly Wells & Gray, LLP (the
“Firm”). I am personally involved in all aspects of the prosecution of this matter.
2. The Firm was founded in October of 2013. Prior to this, I was with the law firm of Faruqi & Faruqi, LLP (“F&F”). I became a partner at F&F in January 2012. While at F&F, I was either chair or co-chair of the firm’s employment practices group.
3. I have been involved in all aspects of this Litigation from the initial investigation through its resolution.
4. I make this Declaration in support of Plaintiff’s Unopposed Motion for Final
Approval of Class and Collective Action Settlement and Certification of Settlement Class Case 2:16-cv-01402-NBF Document 69 Filed 04/16/18 Page 2 of 37
(“Plaintiff’s Motion”), which seeks final approval of the Settlement Agreement.1 The matters set forth herein are stated within my personal knowledge.
5. I am submitting this Declaration to put before the Court certain documents and facts supporting final approval of the Settlement and demonstrating that the requirements of Rule
23 and 29 U.S.C. § 216 are satisfied here for purposes of certifying the Settlement Class.
6. Specifically, I make this Declaration in support of Plaintiff’s unopposed Motion
(a) for final approval of the Settlement, (b) approval of Service Payment for the Named Plaintiff, and (c) approval of Class Counsel’s request for an award of attorney’s fees and reimbursement of expenses.
7. Attached hereto as Exhibit 1 is a true and correct copy of the Settlement
Agreement, minus all exhibits as such documents were previously submitted.
8. Attached hereto as Exhibit 2 is a true and correct copy of the Declaration of
Claims Administrator Concerning Mailing of the Notice of Class and Collective Action
Settlement and the Claim Form, Consent to Join and Release (“Admin. Decl.”), and exhibits thereto, detailing the work performed by the Claims Administrator, Strategic Claims Services
(“Strategic Claims”).
9. Attached hereto as Exhibit 3 is a true and correct copy of the Declaration of
Chelsea Koenig, the named plaintiff and class representative in this Action.
I. SUMMARY OF THE LITIGATION
A. Background Regarding the Parties In This Litigation
10. The proposed Settlement Class is defined as:
1 All capitalized words not otherwise defined in this declaration have the same meaning given them in the Settlement Agreement.
2 Case 2:16-cv-01402-NBF Document 69 Filed 04/16/18 Page 3 of 37
FLSA Class: All Tipped Employees who affirmatively opt-into this Action pursuant to Section 216(b) of the FLSA by submitting a Claim Form to the Claims Administrator prior to the Bar Date.
PA Class: All former and current Tipped Employees of Defendants who worked in the Commonwealth of Pennsylvania at any time during the Class Period at one or more restaurants operating under the brand “Primanti Bros.” who has not filed a Request for Exclusion prior to the Bar Date.
11. The applicable Class Period is the period of time between September 9, 2013 and
December 31, 2016.
12. Based on the records provided to the Claims Administrator by Defendant, there are 3,029 individuals who qualify as potential members of the Settlement Class. This includes
1,880 individuals who worked in Pennsylvania during the Class Period and 1,149 individuals who worked outside of Pennsylvania.
13. To date, 25 individuals have submitted a Request for Exclusion to the Claims
Administrator (resulting in an exclusion rate of 1.3%). Thus, the PA Class contains 1,855 individuals. In addition, the FLSA Class includes 206 Tipped Employees who worked outside of
Pennsylvania during the Class Period and submitted a Claim Form to the Claims Administrator.
Thus, there 2,061 individuals in the Settlement Class.
14. Thus, of the 3,029 Tipped Employees, 68% are participating in the Settlement as either PA Class or FLSA Class members (collectively, Settlement Class members). Further, 789 individuals have submitted a Claim Form and are therefore Participating Settlement Class
Members entitled to receive a portion of the Settlement’s proceeds. Consequently, of the original 3,029 Tipped Employees employed by Defendants, 26% are Participating Settlement
Class Members.
3 Case 2:16-cv-01402-NBF Document 69 Filed 04/16/18 Page 4 of 37
15. Importantly, to date, no individual has objected to any provision of the Settlement
Agreement, including the request for Service Payment to the Named Plaintiff and the fee request of Class Counsel.
16. As set forth in the Settlement Agreement, all Participating Settlement Class
Members will partake in the proceeds of the Settlement, with their individual share of the
Settlement Amount based on the number of hours they worked as a Tipped Employee during the
Class Period.
B. Facts and Procedural Background
17. Plaintiff Chelsea Koenig (“Plaintiff”) commenced this Action on September 9,
2016.
18. On September 30, 2016, Plaintiff filed an amended complaint (“Complaint”) identifying each defendant in the caption.
19. In her Complaint, Plaintiff alleges that Defendants violated: (1) the minimum wage requirements of the Fair Labor Standards Act of 1938, as amended 29 U.S.C. §§ 201 et seq. (“FLSA”); (2) the minimum wage requirements of the Pennsylvania Minimum Wage Act
(“PMWA”); (3) the Pennsylvania Wage Payment and Collection Law (“PWPCL”); and (4)
Pennsylvania common law.
20. In particular, Plaintiff alleges that Plaintiff alleges that Defendants violated applicable wage and hour laws by: (i) failing to satisfy the notice requirements of the tip credit provisions in federal and state law; (ii) failing to ensure Tipped Employees earned the mandated minimum wage when taking the tip credit; and (iii) requiring Tipped Employees to use their tips to reimburse Defendants for cash shortages and customer walk-outs.
4 Case 2:16-cv-01402-NBF Document 69 Filed 04/16/18 Page 5 of 37
21. On January 12, 2017, the Court held an initial case management conference,
wherein the Court ordered the Parties to attend an early mediation pursuant to the Western
District of Pennsylvania’s practices on or before March 31, 2017.
22. On March 6, 2017, the Parties engaged in the Court mandated ADR process
before a mediator, David B. White, Esq.
23. Prior to this mediation, Defendants provided Plaintiff’s counsel with certain key
information, including documents demonstrating a change in Defendants’ policy regarding how they provided tip credit notification (which was implemented in December 2016) as well as payroll data thereby permitting Plaintiff’s counsel to calculate the total damages suffered by
Defendants’ Tipped Employees.
24. While helpful, the mediation was ultimately unsuccessful. It did, however, lead to
further discussion amongst counsel regarding the possibility of settlement.
25. On April 6, 2017, the Court entered the Parties agreed upon discovery schedule
and calendared oral argument for Plaintiff’s motions for class/collective certification for October
11, 2017.
26. After entry of the discovery schedule, the Parties began discovery in earnest, with
Plaintiff propounded document requests, interrogatories, and requests for admission.
27. During this phase of discovery, the Parties exchanged thousands of pages of
documents.
28. In addition, Plaintiff deposed two Rule 30(b)(6) witnesses (one of which required
the individual to come back a second day to address certain issues), took the deposition of the
individual defendant, David Head, and deposed a former general manager at an individual
5 Case 2:16-cv-01402-NBF Document 69 Filed 04/16/18 Page 6 of 37
Primanti Bros. restaurant location. In total, there were 5 separate depositions taken by Plaintiff’s
counsel – over the course of four separate days -- in this matter.
29. Defendant also deposed Plaintiff during this phase of discovery and reviewed the
documents that Plaintiff had produced in response to Defendants’ written discovery demands.
30. Due to the need for additional time to conduct certain depositions, the Court extended the deadline for Plaintiff to file her motions for class and collective certification.
31. Plaintiff filed her motion for class certification of her Pennsylvania state claims on September 16, 2017. That same day, Plaintiff also filed her motion for conditional certification of her federal claims.
32. On September 28, 2017, the Parties requested, and the Court granted, a postponement of oral argument on Plaintiff’s motions so as to permit the Parties an opportunity to again attempt mediation.
33. Thus, while the Parties continued to fully brief the motions, they also calendared and prepared for a mediation session before the Hon. Diane M. Welsh (Ret.) of JAMS.
II. THE SETTLEMENT
34. The mediation with Judge Welsh occurred on November 27, 2017. At the conclusion of the mediation, Defendants requested additional time to consider Plaintiff’s settlement proposal which was contoured with the assistance of Judge Welsh. Even then, additional conversations were had amongst counsel regarding the precise contours of the proposed agreement.
35. Throughout the course of mediation and the follow up conversations, Defendants have vigorously denied the allegations in the Complaint.
6 Case 2:16-cv-01402-NBF Document 69 Filed 04/16/18 Page 7 of 37
36. Moreover, it was during the course of these conversations that the Parties
discussed the general downturn in the restaurant industry.
37. On December 4, 2017, the Parties advised the Court that they had reached a
settlement in principal. Thereafter, it took weeks of additional negotiations for the Parties to
reach an accord on the precise language of the term sheet, and only after that was reached did the
Parties begin working on a proposed settlement agreement.
38. Thus, the settlement negotiations that ultimately led to this proposed settlement
before this Court took place over the course of several weeks and with the help of an experienced
mediator.
39. In our view the Settlement represents an excellent result that will provide
significant benefits to the Settlement Class while removing the risk and delay associated with
further litigation.
A. The Terms of the Settlement
40. The Settlement Amount consisting of Two Million One Hundred Thousand
Dollars ($2,100,000.00), less Court approved attorneys’ fees, expenses and Service Payment for
the Plaintiff, shall be for the benefit of the Settlement Class members.
41. My co-counsel and I recommend the proposed Settlement as a superb result in light of the factual and legal risks of continued litigation. In recommending the Settlement as fair, reasonable and adequate, Class Counsel have considered, among other things, the events underlying Plaintiff’s claims and the possible defenses to those claims, and the information
gleaned by the extensive exchange of information conducted by the Parties in this case.
42. All of this information provided us with a thorough understanding of the strengths
and weaknesses of Plaintiff’s claims and the risks associated with further litigation.
7 Case 2:16-cv-01402-NBF Document 69 Filed 04/16/18 Page 8 of 37
43. Class Counsel also relied upon their collective experience litigating and resolving
other class actions and other cases alleging violations of the FLSA and PMWA, including
numerous cases involving the restaurant industry.
44. In short, my co-counsel and I believe that this Settlement is fair and reasonable in light of the fact that it provides a substantial monetary recovery when weighed against the very real risk that the Settlement Class could substantially less, or even nothing at all, had this case
proceeded.
45. Importantly, through the course of discovery (and in furtherance of the Parties
ongoing efforts to resolve the matter), it was brought to Plaintiff’s attention that after Plaintiff
filed the Complaint, Defendant took further proactive measures to ensure that all Tipped
Employees understood Defendant’s compensation structure, including the tip credit, by setting
forth the tip credit provisions in writing. This remediation effectively undermined Plaintiff’s
claims of ongoing damages.
46. The terms of the proposed Settlement are set forth in the Parties’ Settlement
Agreement. Importantly, there are no undisclosed side agreements between Plaintiff and
Defendant.
47. Based on the information provided by Defendant, it is Class Counsel’s estimation
that the Settlement Amount represents approximately a 19.4% recovery of damages suffered by
Tipped Employees during the Class Period due to Defendant’s alleged failure to conform to the
tip credit notification requirements of Section 203(m) of the FLSA.2 For the Participating
Settlement Class Members, the Settlement Amount represents a 54.3% recovery of these
damages suffered.
2 This estimation of recovery does not include liquidated damages which can, but are not required to, be awarded by a court in an FLSA action.
8 Case 2:16-cv-01402-NBF Document 69 Filed 04/16/18 Page 9 of 37
48. Class Counsel also relied upon their collective experience litigating and resolving other class actions and other cases alleging violations of the FLSA and PMWA.
49. In short, Class Counsel believes that this Settlement is fair and reasonable in light of the fact that it provides a substantial monetary recovery when weighed against the very real risk that the Settlement Class could recover nothing had the Court determined that Defendant had provided proper oral notification of the tip credit provisions or determined that such issues precluded class and/or collective certification.
50. Notably, Settlement Class members will receive a portion of the Settlement
Amount based upon the number of hours they worked for Defendants – and thus the amount of damages they incurred. Stated another way, the more hours in total that an employee worked for
Defendants, the greater their share of the Settlement Amount will be.
51. Importantly, Settlement Class members had the opportunity to challenge the number of hours that were reflected in Defendants’ payroll data. Thus, every effort was made to provide the maximum input from Settlement Class members.
52. The Settlement Amount shall also be used to pay attorneys’ fees, expenses and any Service Payment to the Plaintiff, as so determined by the Court. The remainder of the
Settlement Amount shall be distributed in accordance with the terms of the Settlement
Agreement (specifically, Section §4.7(B)).
B. Distribution of the Settlement Amount To Participating Settlement Class Members
53. The Settlement Agreement sets forth a methodology by which Settlement Class
Members shall receive a portion of the Settlement Amount.
9 Case 2:16-cv-01402-NBF Document 69 Filed 04/16/18 Page 10 of 37
54. Since the crux of Plaintiff’s claims involves Defendant’s alleged failure to comply
with the tip credit notification provisions of Section 203(m) of the Fair Labor Standards Act, the
formula for distributing the Settlement Amount to Participating Settlement Class Members seeks
to correct this alleged issue. Stated another way, the Settlement Agreement seeks to distribute
the Settlement Amount to Participating Settlement Class Members as if Defendant retroactively
complied with Section 203(m). Notably, throughout the course of this Litigation, Defendant has adamantly denied that it failed to comply with Section 203(m) or any other law.
55. Importantly, many of Plaintiff’s other claims asserted in the Complaint, including
Defendant’s alleged practice of deducting for the cost of walk-outs and/or cash shortages would
call for the same relief as set forth in the Settlement Agreement – the payment of the full
minimum wage owed. Stated another way, the relief provided for in the Settlement Agreement
addresses the crux of Plaintiff’s claims and provides for the same relief Plaintiff would be
seeking had this case proceeded to trial.
56. Having overseen numerous wage and hour settlements, Class Counsel believes
that the proposed allocation methodology is eminently appropriate as it treats all Settlement
Class Members fairly.
57. Importantly, the estimated payments that the Claims Administrator notified
Settlement Class Member that they may receive will likely rise in value. This is because (i) not
all Tipped Employees elected to become Participating Settlement Class Members and (ii) the
fees Class Counsel are seeking is less than the maximum amount permitted under the Settlement
Agreement.
58. Between the PA Class and the FLSA Class, there are a total of 2,031 individuals
in the Settlement Class.
10 Case 2:16-cv-01402-NBF Document 69 Filed 04/16/18 Page 11 of 37
59. Of this amount, 789 individuals have elected to become Participating Settlement
Class Members.
60. Presently, the Claims Administrator has advised Class Counsel that the median
award to Participating Settlement Class Members is $893.44 and the highest award is $9,393.13.
Presently, the average award to Participating Settlement Class Members is $1,700.26.
61. Of the 1,855 PA Class members, 583 have filed claims which equates to a claims
rate of 31.4% for the PA Class alone.
62. The average award compares favorably with other class action settlements
approved in this Circuit.
C. Notice Plan
63. In conformity with this Court’s Preliminary Approval Order, the Parties
effectuated dissemination of the Notice Packet, including distribution of the Class Notice and
establishment of the settlement website (which was a separate page to the Claims
Administrator’s principal website).
64. The dissemination of the Class Notice is set forth in detail in the Admin. Decl., attached hereto as Exhibit 2.
65. As set forth in Admin. Decl., the Class Notice was mailed to the 3,029 Tipped
Employees whose records were provided by Defendants.
66. Because the Class Notice effectively describes the means by which Defendants’ allegedly violated the FLSA, the dissemination of this notice ensured that each recipient was made aware of their rights as an employee in a tipped position irrespective of whether they elected to participate in the Settlement.
11 Case 2:16-cv-01402-NBF Document 69 Filed 04/16/18 Page 12 of 37
67. The Parties distributed the Class Notice through direct mail and the establishment of a dedicated settlement website. In addition, the Claims Administrator also sent a notice to those Tipped Employees for which Defendants had a valid email address.
68. In addition, the Claims Administrator also mailed a reminder postcard to Tipped
Employees who had not yet submitted a Claim Form.
69. Consequently, the Settlement Class was fully apprised of their rights and obligations under the Settlement, as well as all appropriate dates and deadlines.
70. In Class Counsel’s view, the notice plan utilized in this Litigation meets or
exceeds the standards for due process and Rule 23.
71. The Class Notice advises all recipients that Settlement Class Members who do not
believe that the Settlement and/or request for an award of attorneys’ fees and reimbursement of
expenses are fair, reasonable and adequate, have the right to object to either of the foregoing.
Further, the Class Notice describes the releases contained in the Settlement Agreement.
72. To date, not a single objection has been filed by any Settlement Class Member to
any aspect of the proposed Settlement, including the fee request or Service Payment to Plaintiff.
D. Potential Cy Pres Distribution Recipients
73. Pursuant to Section 4.13 of the Settlement Agreement, any Settlement Checks that
are not negotiated within the allotted timeframe shall become subject to the Cy Pres
Distribution. The Court shall determine which recipient(s) shall receive said funds from the
Claims Administrator.
74. The Settlement Agreement requires the Parties to propose three potential cy pres
recipients for the Court’s consideration. After having conferred on the issue, the Parties have
agreed to propose the following entities for the Court’s consideration: (i) Pennsylvania Legal
12 Case 2:16-cv-01402-NBF Document 69 Filed 04/16/18 Page 13 of 37
Aid Network; (ii) Neighborhood Legal Services (Allegheny County/Pittsburgh Service Office); and (iii) Food Bank of Western Pennsylvania.
75. Should the Court deem it necessary, Class Counsel shall submit further information regarding any or all of these potential recipients.
III. THE PROPOSED SETTLEMENT IS FAIR REASONABLE AND ADEQUATE
76. Class Counsel believes that the proposed Settlement is fair, reasonable, and adequate as it provides for $ 2,100,000.00 (less fees and expenses) to be distributed to
Participating Settlement Class Members. In addition, the proposed Settlement at this time avoids costly and time-consuming litigation and the risks associated therewith.
77. Before agreeing to the proposed Settlement, Class Counsel assessed its merits using various factors typically used by counsel in this type of case including the factors used by courts in the Third Circuit to assess proposed class action settlements. Class Counsel believes that the proposed Settlement is fair, reasonable, and adequate when the applicable factors are considered. Those factors include: (1) the complexity, expense, and likely duration of the litigation; (2) the reaction of the class to the settlement; (3) the stage of the proceedings and the amount of discovery completed; (4) the risks of establishing liability; (5) the risks of establishing damages; (6) the risks of maintaining the class action through the trial; (7) the ability of the defendants to withstand a greater judgment; (8) the range of reasonableness of the settlement fund in light of the best possible recovery; and (9) the range of reasonableness of the settlement fund to a possible recovery in light of all the attendant risks of litigation.
A. Complexity, Expense, And Likely Duration Of The Litigation
78. The complexity, expense, and likely duration of the litigation justify approval of the Settlement. This Litigation has gone on for nearly a year and a half, with both Parties
13 Case 2:16-cv-01402-NBF Document 69 Filed 04/16/18 Page 14 of 37
engaging in substantial work. For example, multiple depositions were taken by Plaintiff’s counsel and the Parties fully briefed motions for class and collective certification.
79. Had this case continued, it would have required the Court to decide the pending motions to certification. Thereafter, the Parties would have been required to expend significant additional expense and further litigation including summary judgment briefing.
80. Indeed, in the absence of a Settlement, Plaintiff would have had to overcome the invariable motions for decertification (had the Court granted certification), Defendants’ own summary judgment motion, and potential appeals by either party (depending on the outcome of any of the aforementioned motions).
81. Notably, the undersigned was trial counsel, along with Carlson Lynch, in a case that just went to trial. See Verma v. 3001 Castor, Inc., No. 13-3034 (E.D. Pa.). That matter, which also involved allegations of FLSA, PMWA, and WPCL violations, took nearly five years from inception to jury verdict.
82. In short, significant additional work would have been required before this case was ready for trial. Indeed, even a trial would not have guaranteed resolution (as each party may have appealed any unfavorable Court ruling). All of these facts weigh in favor of the Settlement.
B. Reaction Of The Class To The Settlement
83. As noted above, the Class has responded favorably to the Settlement. To date, only 25 Requests for Exclusion were submitted to the Claims Administrator.3
84. Importantly, not a single objection has been lodged regarding any aspect of the proposed Settlement. As such, Class Counsel believes that the Settlement Class favors this
Settlement and the terms contained therein.
3 Class Counsel has inquired and the majority of these individuals appear to have worked at different locations across Pennsylvania.
14 Case 2:16-cv-01402-NBF Document 69 Filed 04/16/18 Page 15 of 37
85. Further, Plaintiff Koenig fully supports the Settlement.
C. Stage Of The Proceedings And The Amount Of Discovery Completed
86. The stage of the proceedings and the amount of discovery completed justifies
approval of the Settlement. The Parties have engaged in significant written discovery. Further,
Plaintiff took – over the course of four separate days – five depositions, including two Rule
30(b)(6) witnesses (one of which required the individual to come back a second day to address
certain issues), the deposition of the individual defendant, David Head, and the deposition of a
former general manager at an individual Primanti Bros. restaurant location.
87. In addition, Defendant deposed Plaintiff.
88. In addition, the Parties engaged in the Court’s mandatory ADR process before a
well-regarded third party.
89. Finally, the Parties engaged in formal mediation through the use of JAMS and mediated the matter before a former Magistrate Judge who was familiar with both class actions and claims asserting wage and hour violations.
90. Hence, Class Counsel has developed a comprehensive understanding of the merits of the case through our work on the case. In our view, when we agreed to the proposed
Settlement, we had obtained sufficient information about the strengths and weaknesses of the claims and defenses to make a reasoned judgment about the desirability of settling the case on the terms proposed.
91. In Class Counsel’s view, the stage of the litigation and amount of discovery weigh in favor of approving the Settlement.
15 Case 2:16-cv-01402-NBF Document 69 Filed 04/16/18 Page 16 of 37
D. Risks Of Establishing Liability And Damages
92. The risks of establishing liability and damages also counsel approval of the
Settlement. Importantly, these issues are intertwined as Defendants have repeatedly asserted that any determination of liability (and thus whether there were any damages suffered) would be require an individual by individual inquiry thereby necessarily defeating class/collective certification.
93. Naturally, Plaintiff’s counsel takes exception to Defendants’ proposition.
Nonetheless, this demonstrates that the issue of liability (and thus damages and certification) would be hotly contested issues should this Litigation continue in the absence of the Settlement reached by the Parties.
94. Further, the issue of damages, especially with respect to the claim that Defendants required Tipped Employees to pay for cash shortages and walkouts, also would have resulted in contested damage models being proffered by both sides. This would have added additional risk that the Class could wind up receiving no compensation or, more likely, a significantly reduced amount if the Court sided with Defendant’s theory as to either damages or liability.
E. Risks Of Maintaining The Class Action Through Trial
95. The risks of maintaining the class action through the trial justify approval of the
Settlement as well. Based on my experience litigating class action cases, as well as the briefs filed by Defendants to date, it is clear that Defendants would have vigorously opposed any certification order by the Court – including appeals if necessary.
96. Indeed, given that Defendants’ defense was oral notification, Defendants would have invariably argued that inquiry into what each manager said is grounds for denial of class/collective certification.
16 Case 2:16-cv-01402-NBF Document 69 Filed 04/16/18 Page 17 of 37
97. This risk therefore supports settlement.
F. Ability of Defendant To Withstand A Greater Judgment
98. The general downturn in the restaurant industry was a significant topic of discussion regarding the Parties’ settlement negotiations.
99. It is my firm’s experience that there is a general downturn in the restaurant industry and that, accordingly, defendants in such cases simply have less available dollars to pay large settlements.4
100. Thus, it is Class Counsel’s considered opinion that had Plaintiff and the Class not settled now, there was the possibility that Defendants’ financial condition would have worsened and, consequently, Plaintiff and the Settlement Class could have potentially recovered significantly less or even nothing at all.
101. Thus, this factor also supports settlement at this juncture.
G. Range Of Reasonableness Of The Settlement Fund In Light Of The Best Possible Recovery And All Attendant Risks Of Litigation
102. The range of reasonableness of the settlement fund in light of the best possible recovery and all the attendant risks of litigation strongly favors approval of the Settlement. Here, the Settlement Amount ($2.1 million) provides for a recovery of 19.4% of the back wages owed to all Tipped Employees who worked for Defendants during the Class Period. More importantly, however, the proposed Settlement represents a 54.3% recovery of the back wages owed to
Participating Settlement Class Members.
103. Consequently, this settlement is in line with other tip credit cases. See, e.g.,
Graudins v. Kop Kilt, LLC, No. 14-cv-2589, 2017 U.S. Dist. LEXIS 25926 (E.D. Pa. Feb. 24,
4 Unlike other class actions, in wage and hour cases there is typically no insurance coverage available.
17 Case 2:16-cv-01402-NBF Document 69 Filed 04/16/18 Page 18 of 37
2017) (granting final approval for $300,000 settlement for class of employees at single restaurant
who alleged, inter alia, tip credit notification violation); Kotchmar v. Movie Tavern Partners, LP,
et al., No. 15-cv-04061 (E.D. Pa. 2016) (granting final approval of $750,000 settlement which
represented approximately 50% of alleged improper tip credit claimed).
104. Indeed, just last month, a sister Court in this District approved a settlement in an
analogous restaurant tip credit case where plaintiff recovered approximately 41% of the back wages owed. See Koenig v. Granite City Food & Brewery, LTD., No. 16-1396 (W.D. Pa.) (Dkt.
No. 125). Notably, in that case, the court had already certified a Rule 23 class and granted conditional certification of an FLSA collective but had nonetheless approved the settlement due to “ample evidence Defendant would be unable to pay a greater judgment” due to their financial downturn. Id., at n.4.
H. Additional Factors Substantiate The Appropriateness Of The Settlement
105. It is Class Counsel’s understanding that Defendants have complied with the
requirements of CAFA and, to date, not a single attorney general has filed any objection to any
portion of the settlement.
106. Additionally, Class Counsel is aware of no evidence of fraud or collusion behind
the Settlement.
107. Rather, this Settlement was the product of extensive negotiations between
experienced counsel through the use of an independent, third-party mediator.
108. Based on my experience in litigating analogous wage and hour class actions, the
proposed Settlement represents an excellent result that will provide significant benefits to the
Settlement Class.
18 Case 2:16-cv-01402-NBF Document 69 Filed 04/16/18 Page 19 of 37
109. Subsequent to the Parties’ mediation, the precise terms of the Settlement were negotiated over the course of many weeks of intense negotiations, with each issue being negotiated at length.
110. Thus, Class Counsel has clearly developed a comprehensive understanding of the merits of the case. In our view, when we agreed to the proposed Settlement, we had obtained sufficient information about the strengths and weaknesses of the claims and defenses to make a reasoned judgment about the desirability of settling the case the terms proposed.
111. Accordingly, Class Counsel recommends the proposed Settlement as an excellent result in light of the factual and legal risks of continued litigation. In recommending the
Settlement as fair, reasonable and adequate, Class Counsel have considered, among other things, the events underlying Plaintiff’s claims and the possible defenses to those claims, and the information gleaned by the extensive exchange of information conducted by the Parties in this case, including Defendant’s deteriorating financial condition.
112. All of this information provided us with a thorough understanding of the strengths and weaknesses of Plaintiff’s claims and the risks associated with further litigation.
113. Class Counsel also relied upon their collective experience litigating and resolving other class actions and other cases alleging violations of the FLSA and PMWA.
114. In short, Class Counsel believes that this Settlement is fair and reasonable in light of the fact that it provides a substantial monetary recovery when weighed against the very real risk that the Settlement Class could recover nothing.
19 Case 2:16-cv-01402-NBF Document 69 Filed 04/16/18 Page 20 of 37
IV. THE PROPOSED SETTLEMENT CLASS MEETS THE REQUIREMENTS OF RULE 23
A. The Proposed Settlement Satisfies Rule 23(a)
115. In Class Counsel’s view the proposed Class satisfies the requirements of Rule 23 for class certification. Federal Rule of Civil Procedure 23(a) requires that (1) the class is so numerous that joinder of all members is impracticable; (2) there are questions of law or fact common to the class; (3) the claims or defenses of the representative parties are typical of the
claims or defenses of the class; and (4) the representative parties will fairly and adequately
protect the interests of the class.
116. In Class Counsel’s view, the class is so numerous that joining all members is
impracticable. Class Counsel understands that, based on Defendants’ records supplied to the
Claims Administrator, there are 1855 PA Class Members. As a result, Class Counsel suggests
that the Litigation satisfies the numerosity requirement.
117. Second, there are questions of law or fact common to the PA Class, including,
whether Defendants violated applicable wage and hour laws by failing to (i) properly pay Tipped
Employees in accordance with notice requirements of the tip credit provisions in federal and
state law; (ii) ensure Tipped Employees earned the mandated minimum wage when taking the tip
credit; and (iii) requiring Tipped Employees to use their tips to reimburse Defendants for cash
shortages and/or customer walkouts in violation of applicable wage laws.
118. Third, Plaintiff’s claims are typical of the proposed PA Class because all claims
of Plaintiff and the PA Class arise from the same practices by Defendants – namely the failure to
pay the applicable minimum wage under the circumstances and failing to conform to the tip
credit notification requirements of Section 203(m). There are no unique facts or circumstances
that would render any claims atypical.
20 Case 2:16-cv-01402-NBF Document 69 Filed 04/16/18 Page 21 of 37
119. Fourth, in Class Counsel’s view, Plaintiff is an adequate representative because
her interests are not in conflict with the PA Class. Instead, Plaintiff and members of the PA
Class share the common goal of maximizing their recovery from Defendant. Moreover, Plaintiff
has amply demonstrated her commitment to the PA Class by, inter alia, responding to discovery
and sitting for her deposition.
120. Further, Class Counsel are adequate as we have served as class counsel in
numerous other class actions.
B. The Proposed Settlement Class Meets The Requirements of Rule 23(b)
121. Class Counsel also suggest that this Litigation meets the requirements of Rule
23(b)(3) for purposes of certifying the PA Class as a Settlement Class, which requires that the
questions of law or fact common to all members of the class predominate over questions
pertaining to individual members and that class action is superior to other available methods of
adjudication.
122. Here, the common nucleus of operative fact is that all PA Class members suffered
or were permitted to work under Defendants’ wage practices that allegedly did not comply with
Section 203(m) of the FLSA. Further, Defendants allegedly took a tip credit against all PA Class
members, despite not complying with the tip credit notification requirements under applicable
state and federal wage laws. In short, the claims of the Plaintiff and the PA Class all arise from the same work conditions that Defendants allegedly operated their Restaurants under.
123. Additionally, there is no better method available than class action for the adjudication of the claims of Plaintiff and members of the PA Class.
21 Case 2:16-cv-01402-NBF Document 69 Filed 04/16/18 Page 22 of 37
C. Rule 23(g) Is Satisfied
124. Finally, certifying a class requires the Court, under Rule 23(g), to examine the capabilities and resources of counsel for the class to determine whether they will provide adequate representation to the class. Here, Class Counsel have substantial experience handling class actions and other complex litigation.
125. As an initial matter, a sister court found Class Counsel to meet the requirements of Rule 23(g) when granting class certification in a directly analogous matter. See Koenig v.
Granite City Food & Brewery, Ltd., No. 16-1396, 2017 U.S. Dist. LEXIS 71809, *11 (W.D. Pa.
May 11, 2017) (finding the undersigned and his firm to be “qualified, experienced, and able to conduct this litigation”).
126. Further, in this Circuit alone, my firm has also served as class counsel in the following directly analogous actions: In re Chickie’s & Pete’s Wage and Hour Litigation, Master
File No. 12-cv-6820 (E.D. Pa.); Graudins v. Kop Kilt, LLC, No. 14-cv-2589, 2017 U.S. Dist.
LEXIS 25926 (E.D. Pa. Feb. 24, 2017); Kotchmar v. Movie Tavern Partners, LP, et al., No. 15- cv-04061 (E.D. Pa. 2016).
127. In addition, we were appointed in co-class counsel in the action styled Verma v.
3001 Castor, Inc., No. 13-3034, 2016 U.S. Dist. LEXIS 164026 (E.D. Pa. Nov. 29, 2016). In that case, we obtained a jury verdict of over $4.59 million dollars for violations of the PMWA and Pennsylvania common law of unjust enrichment.
128. Notably, the Verma matter was filed in May of 2013 and the jury, after a three- day trial, returned a verdict on March 22, 2018.
129. The Firm’s experience and expertise has been recognized by courts across the country. For example, CWG served as co-lead counsel in the action styled Gedek v. Perez, et al.
22 Case 2:16-cv-01402-NBF Document 69 Filed 04/16/18 Page 23 of 37
(In Re Kodak ERISA Litig.), No. 6:12-cv-06051 (W.D.N.Y.) (settlement of ERISA claims for
$9.7 million) and Bergman v. Kindred Healthcare Inc., et al., No. 10cv191 (N.D. Ill.) (settlement
of Illinois state class wage and hour claims for $700,000).
130. In short, Class Counsel (i) are eminently qualified to serve as class counsel in this
matter, (ii) have done substantial work to investigate potential claims in the Litigation, and (iii) have vigorously pursued the interests of the Settlement Class throughout the pendency of this matter. Thus, the requirements of Rule 23(g) are satisfied.
131. For these reasons, the Court should certify the PA Class for settlement purposes.
D. Final Certification of the FLSA Collective Class Is Warranted
132. Just as the PA Class have common issues of law and fact binding them together, so to do the individuals who opted-into the FLSA Class.
133. For a collective action to proceed, two requirements must be met. First, all members of the collective action must affirmatively consent to join. Here, 789 individuals have affirmatively consented to join this action.
134. Second, all members of the collective action must be “similarly situated.”
135. Here, Plaintiff believes that all FLSA Class members are similarly situated as each individual worked: (i) as a Tipped Employee; (ii) in one of Defendants’ Restaurants; (iii) under similar working conditions; and (iv) have essentially the same claim (Defendants’ failure to conform to the mandates of Section 203(m) of the FLSA).
136. Indeed, the members of the FLSA Class all have similar circumstances of employment as Tipped Employees for Defendants and were paid similar hourly wages.
23 Case 2:16-cv-01402-NBF Document 69 Filed 04/16/18 Page 24 of 37
137. Accordingly, it is Class Counsel’s opinion that the Participating Settlement Class
Members are “similarly situated” for purposes of final certification of the FLSA Class which
they comprise.
V. ATTORNEYS’ FEES, EXPENSES, AND SERVICE PAYMENT
138. It is black letter law that Class Counsel are entitled to compensation for the
benefit they conferred to the Settlement Class through the creation of a common fund.
139. Further, Class Counsel are also entitled to reimbursement of their out-of-pocket
expenses that were reasonably and necessarily incurred in furtherance of the prosecution of this
Litigation. Such expenses include for example: 1) expenses associated with filing the complaint
and effectuating service; 2) expenses associated with taking and defending depositions, and; 3)
expenses associated with the Parties’ mediation.
140. During the period from inception of this Litigation through April of 2018,
Plaintiff’s Counsel performed 527.64 hours of work in connection with this Litigation for the benefit of Plaintiff and the Settlement Class. Importantly, Plaintiff’s Counsel has not included any time attributable to the instant motions.
141. The total dollar value of Plaintiff’s Counsel’s time (the “lodestar”) is
$316,694.00. Below is a summary of the time and lodestar incurred by each firm.
142. Notably, this time does not include any time devoted by Plaintiff’s Counsel for preparing and filing the instant motions, the memorandum in support of Plaintiff’s motion for attorney’s fees, or the instant declaration.
143. Plaintiff’s Counsel’s lodestar also does not include any estimated time for handling anticipated future inquiries from Settlement Class Members.
24 Case 2:16-cv-01402-NBF Document 69 Filed 04/16/18 Page 25 of 37
144. To date, Class Counsel has received dozens of email and telephone inquires from
putative Settlement Class Members. Many of these inquires have sought clarification as to how
much they will receive if they elect to join and/or wishing to apprise counsel of their new
address.
145. Based on my experience in similar matters and the voluminous inquires received
to date, Class Counsel can reasonably expect to receive numerous inquiries from Settlement
Class Members both shortly after the Final Approval Hearing and subsequent to the distribution of the Settlement Payments.
146. This significant time is not accounted for in Class Counsel’s fee petition.
A. Connolly Wells & Gray, LLP
147. Connolly Wells & Gray, LLP (“CWG”) is the firm I co-founded with Robert J.
Gray and Stephen E. Connolly after I left F&F at the end of August 2013.
148. CWG incurred a total lodestar of $283,944.00, which is based on 473.24 hours of work by its attorneys. The rates listed below are on the current hourly rates regularly charged by each of the attorneys who assisted in the prosecution of the Litigation. The hourly rates for the attorneys are the same as the regular current rates charged for their services.
Name Position Hours Hourly Rate Total Lodestar Billed Gerald D. Wells, III Partner 322.52 $600.00 193,512.00
Robert J. Gray Partner 139.47 $600.00 83,682.00
Stephen E. Connolly Partner 11.25 $600.00 6,750.00
Total 473.24 283,944.00
25 Case 2:16-cv-01402-NBF Document 69 Filed 04/16/18 Page 26 of 37
149. The hourly rates above reflect an increase in CWG’s hourly rate which was effective as of January 1, 2018. This hourly rate was approved by the Court in Koenig v.
Granite City Food & Brewery, LTD., No. 16-1396 (W.D. Pa.).
150. CWG’s previous hourly rate of $550 per hour has been approved by numerous courts across the country.5 CWG’s new hourly rate was the first rate increase since the founding of the Firm.
151. Moreover, the new hourly rate is the same hourly rate that my previous firm,
F&F, billed me at in 2013.
152. CWG does not bill for paralegal time, choosing instead to absorb such cost as overhead.6
153. Most of the limited time Stephen Connolly spent on this matter was limited to editing and finalizing the various motions (and responses thereto).
154. Robert Gray performed substantial work in this matter and was involved from its initial investigation through mailing of the settlement notices to class members. Mr. Gray investigated the initial claims against Defendants, including Defendants’ corporate structure, and was responsible for revising the initial complaint, drafting the amended complaint, and drafting
Plaintiff’s mediation statements. As a former accountant, Mr. Gray was also responsible for preparing various damage analyses prior to the two mediations and during the course of settlement negotiations and reviewing Defendant’s financial condition. In addition, Mr. Gray
5 Even utilizing CWG’s previous hourly rate, the Firm’s lodestar is $260,282.00 ($550 x 473.24 hours). This clearly substantiates Class Counsel’s fee request. 6 CWG’s administrative assistant/paralegal has incurred approximately 27 hours in furtherance of this Action.
26 Case 2:16-cv-01402-NBF Document 69 Filed 04/16/18 Page 27 of 37
also attended the final mediation session with Magistrate Judge Welsh. Lastly, Mr. Gray
coordinated with the claims administrator for the mailing of the settlement notices.
155. I was the principal attorney responsible for this matter. Consequently, all Court appearances and the bulk of the interaction with defense counsel were matters that I handled.
Further, I also took or defended the depositions in this matter and was principally responsible for briefing class and conditional certification. Finally, I also was the point person for the negotiating and finalizing the Settlement now before the Court, having attended both mediations
and drafted the bulk of the settlement papers, including the term sheet.
B. The Kehoe Law Firm, P.C.
156. The Kehoe Law Firm, P.C. has served as co-counsel since the inception of this
Litigation, as they were the law firm initially retained by Plaintiff.
157. The Kehoe Law Firm, P.C. incurred a total lodestar of $30,550 which is based on
47 hours of work by its attorneys. The rates listed below are the current hourly rates regularly
charged by the attorneys who assisted in the prosecution of the Litigation. The hourly rates for
the attorneys are the same as the regular current rates charged for their services in non-contingent
matters and/or which have been accepted by the courts in other complex class actions.
Name Position Hours Hourly Total Lodestar Billed Rate Michael K. Yarnoff Partner 47 $650.00 $30,550
158. Mr. Yarnoff incurred the bulk of his time acting as the principal point person for
client contact, including assisting in preparing discovery responses, preparing for and attending
the deposition, and attending the second mediation.
27 Case 2:16-cv-01402-NBF Document 69 Filed 04/16/18 Page 28 of 37
C. Carlson Lynch Sweet Kilpela & Carpenter, LLP
159. Carlson Lynch Sweet Kilpela & Carpenter, LLP has served as local counsel since the inception of this Litigation.
160. Carlson Lynch Sweet Kilpela & Carpenter, LLP incurred a total lodestar of
$2,200.00 which is based on 7.4 hours of work by its attorneys. The rates listed below are the current hourly rates regularly charged by each of the attorneys who assisted in the prosecution of the Litigation. The hourly rates for the attorneys are the same as the regular current rates charged for their services in non-contingent matters and/or which have been accepted by the courts in other complex class actions.
Name Position Hours Billed Hourly Rate Total Lodestar
Jamisen Etzel Senior Associate 7.4 $300.00 $2,200.00
161. The majority of Carlson Lynch Sweet Kilpela & Carpenter, LLP’s time was incurred serving as local counsel, as well as recommending and opining on certain individuals to serve as the ADR mediator.
162. For all of Plaintiff’s Counsel, no upward adjustment in billing rates were made, notwithstanding the contingency and risk of the matters involved, the opposition encountered, the preclusion of other employment, the delay in payment, or other factors present in this
Litigation which would justify a higher rate of compensation.
163. The time and services provided by Class Counsel for which fees are sought in the petition are reflected in the records of each of the firms. All of the services performed by Class
Counsel in connection with this Litigation were reasonable and necessary in the prosecution of this case. No time is included in the fee petition for work in connection with the fee petition and expense application or accompanying documents, including this declaration.
28 Case 2:16-cv-01402-NBF Document 69 Filed 04/16/18 Page 29 of 37
164. Class Counsel allocated work in this case to maximize efficiency, assigning tasks both amongst the firms and within each of their respective firms with the goal of minimizing duplication of effort. In addition, every effort was made to assign work within and amongst the firms to minimize fees in the case. To this end, attorneys did not do work that could be completed by paralegals.
165. Throughout the litigation, Class Counsel balanced resources – again, within each of their firms and amongst the firms themselves – to ensure that the matter was litigated in the most efficient manner and that the firms avoided duplication of work. Had such efforts not been made, the number of hours devoted to the prosecution of the Litigation would have been significantly higher.
166. Class Counsel’s lodestar figures do not include charges for expense items. Each firm accounts for expense items separately and such charges are not duplicated in any of the firm’s billing rates.
167. Finally, as noted above, Plaintiff’s Counsel’s total time expended, over 527 hours, does not include any time Plaintiff’s Counsel will expend overseeing the Settlement’s administration, including the distribution of the Settlement’s proceeds. In short, Plaintiff’s
Counsel anticipates expending significant additional time stewarding this matter to its conclusion.
C. The Gunter Factors Support Class Counsel’s Fee Request
168. As set forth above, Plaintiff’s Counsel have incurred a total lodestar of
$316,694.00. The overwhelming majority of this lodestar was incurred by Class Counsel, as
CWG’s lodestar alone is $283,944.00
29 Case 2:16-cv-01402-NBF Document 69 Filed 04/16/18 Page 30 of 37
169. Pursuant to the Settlement Agreement, and as set forth in the Class Notice, Class
Counsel are permitted to seek a fee award of up to one-third of the Settlement Amount. No
Settlement Class Member has objected to this term of the Settlement Agreement.
170. One-third of the Settlement Amount results in a fee award of $700,000.00.
However, Class Counsel is only seeking 30% of the Settlement Amount, or $630,000.00.
171. Plaintiff’s Counsel’s fee request of 30% results in a lodestar multiplier of slightly
less than 2 (1.989 to be precise).7 As noted above, this lodestar does not include Plaintiff’s
Counsel’s time in preparing and filing Plaintiff’s Counsel’s motion in support of its fee request.
172. Courts within this Circuit have recognized that a multiplier, including ones higher
than the one sought here, are clearly within the range of reasonableness and evidence of the
propriety of the fee request. See, e.g., Jackson v. Wells Fargo Bank, N.A., 136 F. Supp. 3d 687,
716-717 (W.D. Pa. 2015) (noting that a lodestar multiplier of 2.83 fell “within the acceptable
range identified” by the Third Circuit and was “further supported by the excellent result achieved
for the class and the efficiency with which class counsel resolved the matter”).
173. In Gunter v. Ridgewood Energy Corp., 223 F.3d 190, 195 n.1 (3d Cir. 2000), the
Third Circuit provided a set of seven factors a district court should use to determine a reasonable
percentage to award class action counsel. They are:
(a) the size of the fund created and the number of beneficiaries;
(b) the presence or absence of substantial objections by members of the class
to the settlement terms and/or fees requested by counsel;
(c) the skill and efficiency of the attorneys involved;
(d) the complexity and duration of the litigation;
7 Using just CGW’s lodestar, the multiplier is a modest 2.219. This multiplier is also well within the range of reasonableness and, thus, counsels in favor of approval of the fee request.
30 Case 2:16-cv-01402-NBF Document 69 Filed 04/16/18 Page 31 of 37
(e) the risk of nonpayment;
(f) the amount of time devoted to the case by plaintiff's counsel; and
(g) fee awards in similar cases
174. A review of these factors either demonstrates they are neutral, inapplicable or
confirms the propriety of Class Counsel’s fee request.
175. Here, Class Counsel were able to obtain a Settlement consisting of a cash
payment of $2,100,000.00 for the benefit of 789 Participating Settlement Class Members.
Accordingly, the first Guenter factor weighs in favor of granting Plaintiff’s fee request.
176. Plaintiff’s fee request was detailed in the Class Notice, which included
information for Settlement Class Members who wish to object to this request. Not a single
Settlement Class Member has objected to either the Settlement in toto, or specifically to Class
Counsel’s fee request. As such, the second Gunter factor also weighs in favor of granting
Plaintiff’s fee request.
177. The third Gunter factor – the skill and efficiency of the attorneys involved – also
favors approval of the requested fee award. Here, Class Counsel are well-recognized,
experienced class action litigators.
178. Indeed, Class Counsel have had their rates and fee request routinely approved by
courts in this Circuit. See, e.g., Koenig v. Granite City Food & Brewery, LTD., No. 16-1396
(W.D. Pa. March 28, 2018) (Dkt. No. 125); Nguyen v. Outerwall, Inc., No. 16-cv-611 (E.D. Pa.
Dec. 22, 2017); Graudins v. Kop Kilt, LLC, No. 14-cv-2589, 2017 U.S. Dist. LEXIS 25926 (E.D.
Pa. Feb. 24, 2017); Kotchmar v. Movie Tavern Partners, LP, et al., No. 15-cv-04061 (E.D. Pa.
Jun. 24, 2016).
31 Case 2:16-cv-01402-NBF Document 69 Filed 04/16/18 Page 32 of 37
179. The complexity of the questions at issue in the Action required deft litigators,
skilled at prosecuting complex class actions to bring this Litigation to successful resolution.
180. Moreover, had the Litigation not settled, Class Counsel was prepared to devote substantial additional time and effort to pressing the Settlement Class Members’ claims.
181. In light of the experience and skill counsel for Defendant and their willingness to mount a vigorous defense the significant settlement reached is all the more noteworthy.
Consequently, the fourth Gunter factor also counsel in favor of granting Plaintiff’s fee request.
182. Complex class actions such as the instant matter are customarily taken on a contingent fee basis. Accordingly, there is no guaranteed or customary fee when counsel prosecutes these claims. Moreover, as noted above, Plaintiff’s Counsel expended over 527 hours litigating Plaintiff’s and the Settlement Class members claims. Clearly, this was time that could not be spent on other matters. Consequently, the fifth Gunter factor also counsels in favor of granting Plaintiff’s fee request.
183. As noted above, Class Counsel spent a substantial amount of time investigating and prosecuting the issues in this Litigation. Indeed, after the Parties’ formal mediation, it took significant additional negotiations between counsel, including numerous conference calls and the exchange and revisions of numerous draft settlement documents, before the Settlement could be agreed to by all Parties.
184. Moreover, the hours expended by Class Counsel in prosecuting the Litigation does not account for the significant work Class Counsel expended preparing the papers sub judicia and will expend overseeing the administration of Settlement, including the distribution of the Settlement Amount. Accordingly, the sixth Gunter factor weighs in favor of granting
Plaintiff’s fee request.
32 Case 2:16-cv-01402-NBF Document 69 Filed 04/16/18 Page 33 of 37
185. Finally, the seventh Gunter factor also supports Class Counsel’s fee request.
Class Counsel’s fee request is at or below fees awarded in other wage and hour matters. See,
e.g., Koenig v. Granite City Food & Brewery, LTD., No. 16-1396 (W.D. Pa.) (Dkt. No. 125,
n.9)(approving fee request “because a 33% fee from the Settlement Fund is consistent with other
class action settlements”); McGee v. Ann's Choice, Inc., No. 12-cv-2664, 2014 U.S. Dist. LEXIS
75840, *16 (E.D. Pa. June 4, 2014)(in FLSA action, finding “Class counsel's request of one-third
here is well within” the range awarded in similar cases); Creed v. Benco Dental Supply Co., No.
12-CV-01571, 2013 U.S. Dist. LEXIS 132911, *17 (M.D. Pa. Sept. 17, 2013)(awarding
attorneys’ fees of one-third of settlement, finding such an award “consistent with similar
settlements throughout the Third Circuit.”).
186. Additional factors also support Plaintiff’s fee request. As an initial matter, no
other group can take any credit for any portion of the results achieved for the Settlement Class.
There was no governmental investigation into Defendants’ pay practices for which Class
Counsel could piggy-back off of, nor were there any other related suits against Defendants.
187. In addition, had a private contingent fee agreement been negotiated between the
Settlement Class and Class Counsel, that amount would have been higher than 30%. Indeed,
firms that typically represent individuals who refer my firm clients have advised me that they
typically have fee agreements with their clients well in excess of 30%.
D. Expenses
188. Plaintiff’s Counsel incurred a total of $15,361.84 in unreimbursed expenses in
connection with the prosecution of this Litigation. These expenses were incurred through filing
fees, conducting and defending numerous depositions, travel expenses, mediators’ fees resulting
from two separate mediations, and copying costs incurred by outside vendors.
33 Case 2:16-cv-01402-NBF Document 69 Filed 04/16/18 Page 34 of 37
189. As Class Counsel, CWG incurred the bulk of the expenses related to this Action.
A summary of the expenses are set forth in table below.
Expense Category Amount
Deposition Transcripts $5,169.30
Mediation Fees $5,965.00
Travel – Hotel8 $2,033.41
Travel – Incidentals $769.27
Printing/Courier $465.36
Court Fees $155.00
Total $14,557.34
190. Travel incidentals include such items as parking, gas, food, and taxis.
191. As is apparent from the above chart, the bulk of expenses incurred by Class
Counsel are associated with the two separate mediation fees (totaling a combined $5,965.00) and the deposition transcripts ($5,169.30).
192. The Kehoe Law Firm, P.C. incurred unreimbursed expenses in the amount of
$404.50. These expenses were incurred as a result of traveling for the Named Plaintiff’s deposition and attending the mediation.
193. Carlson Lynch Sweet Kilpela & Carpenter, LLP incurred unreimbursed expenses in the amount of $400.00. This expense of $400.00 represented the filing fee for the initial complaint.
8 The bulk of these expenses were incurred as a result of the numerous depositions conducted in this matter. CWG has also included the expense of the hotel accommodation for the Final Approval Hearing. No other fees or expenses relating to the Final Approval Hearing were added to this expense request as the hotel charge was the only expense incurred with certainty.
34 Case 2:16-cv-01402-NBF Document 69 Filed 04/16/18 Page 35 of 37
194. The expenses incurred by Class Counsel are reflected on the books and records of
each of the firms.
195. Notably, although certain of the expenses were incurred at or near the inception of
the Litigation, no firm has sought an upward adjustment, or mark-up, of the actual expense
incurred.
196. The expenses incurred were reasonable and necessary to prosecute this class
action.
197. Finally, pursuant to the Settlement Agreement, and as set forth in the Class
Notice, Class Counsel are permitted to seek reimbursement for these expenses in addition to any
fee awarded by the Court.
E. Service Payment Award to Plaintiff
198. As set forth in greater detail in the accompanying memorandum, Plaintiff also
respectfully request that the Court grant an award of $5,000.00 to the named plaintiff, Chelsea
Koenig, as a Service Payment in recognition of her time and efforts expended in order to help
achieve this Settlement.
199. Federal courts often exercise their discretion under Rule 23(d) and (e) to approve
enhancement awards to plaintiffs who instituted and prosecuted an action on the theory that there
would be no class-wide benefit absent their suit. The trial court has discretion to recognize the
benefit of the plaintiff’s actions with such an award.
200. Here, the Plaintiff provided assistance that enabled Class Counsel to successfully
prosecute the Litigation and reach the Settlement, including: (1) submitting to interviews with
Class Counsel; (2) providing Class Counsel with documents and information; (3) responding to
Defendant’s written discovery requests; (4) sitting for a deposition; and (5) making herself
35 Case 2:16-cv-01402-NBF Document 69 Filed 04/16/18 Page 36 of 37
available during each of the two separate mediations. Her efforts were a substantial benefit to the Settlement Class.
201. Further, Plaintiff stepped forward at critical junctures of the litigation process and assisted Class Counsel in understanding the inner-workings of Defendant’s compensation scheme. In addition, Plaintiff also assisted Class Counsel in understanding documents that were produced by Defendant.
202. In short, Plaintiff actively participated in the prosecution of this case and devoted a substantial amount of time and energy in assisting in the successful prosecution of this
Litigation.
203. Accordingly, I believe the requested Service Payment is eminently appropriate.
Indeed, it is at or below awards in similar actions. See, e.g., Koenig v. Granite City Food &
Brewery, LTD., No. 16-1396 (W.D. Pa.) (Dkt. No. 125) (awarding $7,500 to named plaintiff in an analogous wage and hour class action where plaintiff was deposed and attended mediation);
Barel v. Bank of Am., 255 F.R.D. 393, 404 (E.D. Pa. 2009) (awarding $10,000 to named plaintiff in FCRA class action).
204. Moreover, to date, no Settlement Class Member has objected to this request.
205. Indeed, each of these requests – Plaintiff’s request for attorney’s fees, costs and
Service Payment - was detailed in the Class Notice, which included information for Settlement
Class Members who wished to object to any or all of these requests.
206. As stated above, no Settlement Class Member objected to any aspect of the
Settlement, including Class Counsel’s requests for an award of attorneys’ fees, reimbursement of expenses, and Service Payment to Plaintiff.
207. Accordingly, I believe a Service Payment award to Plaintiff is eminently
36 Case 2:16-cv-01402-NBF Document 69 Filed 04/16/18 Page 37 of 37
appropriate.
208. Finally, Defendant does not oppose the motion for final approval of the
Settlement, certification of the Settlement Class, Class Counsel’s fee and expense request, or the
requested Service Payment award to the named Plaintiff.
VI. CONCLUSION
209. Plaintiff and Class Counsel respectfully submit that the Settlement is an excellent
result for the Settlement Class in this case. Class Counsel recommend the Settlement as fair,
reasonable, and adequate, and they request that this Court: (1) approve the Settlement
Agreement, (2) certify the proposed class and appoint Class Counsel (3) approve Class Counsel’s
requested fee award and reimbursement of expenses, and (4) award the Service Payment to
Plaintiff.
I declare under penalty of perjury that the foregoing is true and correct. This Declaration was executed on April 16, 2018, in King of Prussia, Pennsylvania.
Gerald D. Wells, III Gerald D. Wells, III
37 Case 2:16-cv-01402-NBF Document 69-1 Filed 04/16/18 Page 1 of 29
EXHIBIT 1
Case 2:16-cv-01402-NBF Document 69-1 Filed 04/16/18 Page 2 of 29
UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA
CHELSEA KOENIG, on behalf of herself and all others similarly situated, Civil Action No. 16-1402 Plaintiff, Hon. Nora Barry Fischer
v.
PRIMANTI CORPORATION, et al.,
Defendants.
JOINT STIPULATION OF SETTLEMENT AND RELEASE AGREEMENT
This Joint Stipulation of Settlement and Release Agreement (the “Settlement Agreement”)1, is entered into by and between Plaintiff Chelsea Koenig (“Plaintiff” or “Koenig”), on behalf of herself and all other individuals she seeks to represent, and Defendants Primanti Corporation, PLN Food Service, Inc., Southside Food & Beverage Service, Inc., 2 South Market Place, Inc., Cranberry Food Associates, Inc., Greensburg Food Associates, Inc., Leesburg Food Service, Inc., Harmar Food Associates, Inc., Monroeville Food Associates, Inc., Moon Township Food Associates, Inc., North Versailles Food Service, Inc., Mt. Lebanon Food Associates, Inc., Clairton Boulevard Food Service, Inc., Steubenville Pike Food Associates, Inc., Primanti Bros. Maryland – Hagertown, LLC, Primanti Bros. West Virginia, LLC and Primanti Bros. West Virginia – Wheeling, LLC, (collectively, “Primanti Bros.”), David Head, Andrew Taub, Demetrios Patrinos, James Chu and Nicholas Nicholas (who, together with Primanti Bros., are collectively referred to as “Defendants”).
RECITALS
WHEREAS, Plaintiff commenced litigation captioned Koenig v. Primanti Bros., et. al., Civil Action No. 16-1402 in the United States District Court for the Western District of Pennsylvania (the “Action”) asserting various wage and hour claims against Defendants under Pennsylvania state law and the Fair Labor Standards Act (“FLSA”);
WHEREAS, Defendants have vigorously contested Plaintiff’s claims from the outset, including Plaintiff’s assertions that the Action may be maintainable as a class and/or collective action;
WHEREAS, the Parties have engaged in significant discovery practice, including the taking and defending of multiple depositions;
1 Italicized words are defined herein.
Case 2:16-cv-01402-NBF Document 69-1 Filed 04/16/18 Page 3 of 29
WHEREAS, Defendants continue to deny all liability with respect to any and all claims alleged in the Action and have vigorously opposed Plaintiff’s motions for class and collective action certification;
WHEREAS, the Parties participated in an all-day mediation before the Hon. Diane M. Welsh (Ret.), who is experienced in mediating wage and hour claims and other complex class actions;
WHEREAS, Plaintiff’s decision to settle was influenced in material respect by the general economic downturn in the restaurant industry;
WHEREAS, the Parties reached an agreement in principle for a settlement in this Action only with the assistance of Judge Welsh and, even then, required further additional conversations amongst the Parties; and
WHEREAS, the Parties desire to promptly and fully resolve and settle with finality the Action without further litigation;
NOW, THEREFORE, the Parties, in consideration of the promises, covenants, and agreements herein described, and for other good and valuable consideration, acknowledged by each of them to be satisfactory and adequate, and intending to be legally bound, do hereby mutually agree as follows:
1. BACKGROUND
Plaintiff Chelsea Koenig worked as a bartender at a restaurant operated by Defendants doing business as Primanti Bros. in Mt. Lebanon, Pennsylvania. Ms. Koenig received part of her compensation in tips, and Defendant utilized a “tip credit” to satisfy its federal and state minimum wage obligations in paying Plaintiff and other Tipped Employees. Ms. Koenig claims Defendant (i) failed to satisfy the notice requirements of the tip credit provisions in federal and state law; (ii) failed to ensure Tipped Employees earned the mandated minimum wage when taking the tip credit; (iii) required Tipped Employees to use their tips to reimburse Defendant for cash shortages and customer walk-outs; and (iv) required Tipped Employees to pay for other ordinary business expenses of Defendant. Defendant vigorously denies each allegation and maintains that each and every Primanti employee, including Ms. Koenig, was properly paid at all times.
On September 9, 2016, on the basis of those alleged facts, Plaintiff sued Defendant in the United States District Court for the Western District of Pennsylvania, Case No. No. 2:16-cv- 1402-NBF. On her own behalf, and on behalf of a putative class and putative collective, Ms. Koenig asserted claims under the Fair Labor Standards Act (“FLSA”), the Pennsylvania Minimum Wage Act (“PMWA”), the Pennsylvania Wage Payment and Collection Law (“PWPCL”), and Pennsylvania common law. Plaintiff sought recovery of alleged unpaid wages, alleged unpaid or misappropriated gratuities, liquidated damages, and attorneys’ fees and costs, as well as injunctive relief.
- 2 -
Case 2:16-cv-01402-NBF Document 69-1 Filed 04/16/18 Page 4 of 29
Thereafter, on September 30, 2016, Plaintiff filed an amended complaint wherein she identified each of the individual entities that operated a Primanti Bros. restaurant in the pleading’s caption. Thereafter, on December 12, 2016, Defendants filed their Answer to the Amended Complaint. In December 2016, Defendants also modified their procedures for notifying employees for whom they either claimed or intended to claim a “tip credit” pursuant to Section 203(m) of the FLSA.
On January 12, 2017, the Court held an initial case management conference, wherein the Court ordered the Parties to attend an early mediation pursuant to the Western District of Pennsylvania’s practices on or before March 31, 2017. On March 6, 2017, the Parties engaged in the Court mandated ADR process before a mediator, David B. White, Esq. While helpful, the mediation was ultimately unsuccessful. Accordingly, the Court entered the Parties agreed upon discovery schedule on April 6, 2017, and calendared oral argument for Plaintiff’s motions for class/collective certification for October 11, 2017.
Upon entry of the scheduling order, the Parties began discovery in earnest. The Parties exchanged thousands of pages of documents. Plaintiff deposed two Rule 30(b)(6) witnesses (one of which required the individual to come back a second day to address certain issues), took the deposition of the individual defendant, David Head, and deposed a former general manager at an individual Primanti Bros. restaurant location. Defendant also deposed Plaintiff during this phase of discovery.
After the Court extended the deadline to file motions for class/collective certification, so as to accommodate certain depositions, Plaintiff filed her motion for class certification of her Pennsylvania state claims on September 16, 2017. That same day, Plaintiff also filed her motion for conditional certification of her federal claims. On September 28, 2017, the Parties requested and the Court granted a postponement of oral argument on Plaintiff’s motions so as to permit the Parties an opportunity to again attempt mediation. Thus, while the Parties continued to fully brief the motions, they also calendared and prepared for a mediation session before the Hon. Diane M. Welsh (Ret.) of JAMS.
The mediation occurred on November 27, 2017. On December 4, 2017, the Parties advised the Court that they had reached a settlement in principal.
Based upon their independent analysis, and recognizing the risks of continued litigation, counsel for Plaintiff believes that the settlement with Defendants for the consideration of and on the terms set forth in this Settlement Agreement is fair, reasonable, and is in the best interest of Plaintiff and Settlement Class members, in light of all known facts and circumstances, including the risk of delay and defenses asserted by Defendants. Although Defendants deny liability, they likewise agree that settlement is in the Parties’ best interests. For those reasons, and because an effective release is contingent on Court approval, the Parties submit their Settlement Agreement to this Court for its review.
- 3 -
Case 2:16-cv-01402-NBF Document 69-1 Filed 04/16/18 Page 5 of 29
2. DEFINITIONS
2.1 Action. The legal action captioned Koenig v. Primanti Corporation, et al., Civil Action No. 2:16-cv-1402-NBF, in the United States District Court for the Western District of Pennsylvania.
2.2 Bar Date. The date by which a Settlement Class member must submit any of the following to the Claims Administrator: (i) an objection; (ii) a Request for Exclusion from the PA Class; and/or (iii) a declaration contesting the validity of the Claims Administrator’s calculations regarding that individual Settlement Class member’s Estimated Settlement Payment.
2.3 CAFA. The Class Action Fairness Act.
2.4 Claim Form. The form substantially in the form attached hereto as Exhibit D that shall be mailed with the Notice Packet for Tipped Employees to complete before becoming Participating Settlement Class Members. Where appropriate, the Claim Form shall include the form or language to substitute for Department of Treasury Internal Revenue Service Form W-9, Request for Taxpayer Identification Number and Certification.
2.5 Claims Administrator. A claims-administration firm capable of providing appropriate and timely administrative assistance in administering the settlement of this Action as set forth in this Settlement Agreement. The Claims Administrator shall be selected by Plaintiff with the approval of Defendants, whose consent shall not be unreasonably withheld.
2.6 Class Counsel. Connolly Wells & Gray, LLP.
2.7 Class Notice. The notice substantially in the form of Exhibit A to be directed to Settlement Class members. The purpose of the Class Notice is to inform members of the Settlement Class about the resolution of the Action and the material terms of this Settlement Agreement.
2.8 Class Period. September 9, 2013 through December 31, 2016.
2.9 Complaint. The Amended Complaint filed in this Action on or around September 30, 2016.
2.10 Corporate Defendants. Primanti Corporation, PLN Food Service, Inc., Southside Food & Beverage Service, Inc., 2 South Market Place, Inc., Cranberry Food Associates, Inc., Greensburg Food Associates, Inc., Leesburg Food Service, Inc., Harmar Food Associates, Inc., Monroeville Food Associates, Inc., Moon Township Food Associates, Inc., North Versailles Food Service, Inc., Mt. Lebanon Food Associates, Inc., Clairton Boulevard Food Service, Inc., Steubenville Pike Food Associates, Inc., Primanti Bros. Maryland –
- 4 -
Case 2:16-cv-01402-NBF Document 69-1 Filed 04/16/18 Page 6 of 29
Hagertown, LLC, Primanti Bros. West Virginia, LLC and Primanti Bros. West Virginia – Wheeling, LLC.
2.11 Court. The United States District Court for the Western District of Pennsylvania.
2.12 Cy Pres Distribution. Any and all funds that, pursuant to the terms of this Settlement, require distribution to a cy pres recipient(s) pursuant to Section __ of this Settlement Agreement.
2.13 Defendants. Primanti Corporation, PLN Food Service, Inc., Southside Food & Beverage Service, Inc., 2 South Market Place, Inc., Cranberry Food Associates, Inc., Greensburg Food Associates, Inc., Leesburg Food Service, Inc., Harmar Food Associates, Inc., Monroeville Food Associates, Inc., Moon Township Food Associates, Inc., North Versailles Food Service, Inc., Mt. Lebanon Food Associates, Inc., Clairton Boulevard Food Service, Inc., Steubenville Pike Food Associates, Inc., Primanti Bros. Maryland – Hagertown, LLC, Primanti Bros. West Virginia, LLC and Primanti Bros. West Virginia – Wheeling, LLC, David Head, Andrew Taub, Demetrios Patrinos, James Chu and Nicholas Nicholas.
2.14 Defendants’ Counsel. Drinker Biddle & Reath, LLP.
2.15 Effective Date. The first day after the Settlement becomes Final.
2.16 Estimated Settlement Payment. “Estimated Settlement Payment” will have the meaning set forth in Section 4.7.
2.17 Expiration Period. 180 days after the mailing of the Settlement Payment to the Participating Settlement Class Members.
2.18 Final. With respect to any judicial ruling or order, an order that is final for purposes of 28 U.S.C. § 1291, and (a) for which the time has expired to file an appeal, motion for reconsideration or clarification, motion for re-argument, motion for rehearing, petition for a writ of certiorari or other writ (“Review Proceeding”) with respect to such judicial ruling or order with no such Review Proceeding having been filed; or (b) if a Review Proceeding has been filed with respect to such judicial ruling or order, (i) the judicial ruling or order has been affirmed without material modification and with no further right of review, or (ii) such Review Proceeding has been denied or dismissed with no further right of review.
2.19 Final Approval Hearing. The hearing scheduled by the Court to decide whether to approve the Settlement as fair, reasonable, and adequate pursuant to Fed. R. Civ. P. 23. Such a hearing will only constitute a Final Approval Hearing if it is scheduled between 90 and 100 days after entry of the Preliminary Approval Order, so as to provide adequate time for any notice required by CAFA.
- 5 -
Case 2:16-cv-01402-NBF Document 69-1 Filed 04/16/18 Page 7 of 29
2.20 Final Approval Order. The document substantially in the form attached hereto as Exhibit C, which will be submitted to the Court by the Parties to seek (1) approval of this Settlement Agreement on the terms provided herein (or as the same may be modified by subsequent mutual agreement of the Parties subject to approval of the Court), adjudging such terms to be adequate, fair and reasonable, and in the best interests of Plaintiff and Settlement Class members; (2) certification of the Settlement Class for settlement purposes only; (3) approval of Class Counsel’s application for an award of their fees, costs and expenses; (4) approval of Class Counsel’s application for a Service Payment to Plaintiff; and (5) dismissal of the Action with prejudice.
2.21 Final Effective Date. The date on which the Settlement becomes Final and all Settlement Conditions have either been satisfied or waived in accordance with this Settlement Agreement.
2.22 FLSA Class. All Tipped Employees who affirmatively opt-into this Action pursuant to Section 216(b) of the FLSA by submitting a Claim Form to the Claims Administrator prior to the Bar Date.
2.23 Individual Defendants. David Head, Andrew Taub, Demetrios Patrinos, James Chu and Nicholas Nicholas.
2.24 Litigation. The legal action captioned Koenig v. Primanti Corporation, et al., Civil Action No. 2:16-cv-1402-NBF, in the United States District Court for the Western District of Pennsylvania. The terms Litigation and Action shall be used interchangeably herein.
2.25 Notice Packet. The (i) Class Notice mailed to Settlement Class members in accordance with the Settlement Agreement and (ii) Estimated Settlement Payment for the individual Settlement Class member to whom the Class Notice was mailed and (iii) the required deductions, if any, set forth within Defendant’s payroll records (e.g., garnishments, tax liens, child support).
2.26 Notice Period. The period of time from the date the Claims Administrator mails the Notice Packet through the Bar Date.
2.27 PA Class. All former and current Tipped Employees of Defendants who worked in the Commonwealth of Pennsylvania at any time during the Class Period at one or more restaurants operating under the brand “Primanti Bros.” who has not filed a Request for Exclusion prior to the Bar Date.
2.28 Participating Settlement Class Members. Every member of the Settlement Class who submits a valid and timely Claim Form in accordance with the terms of this Settlement Agreement. In accordance with the terms of this Settlement Agreement, only Participating Settlement Class Members will release their FLSA claims and only
- 6 -
Case 2:16-cv-01402-NBF Document 69-1 Filed 04/16/18 Page 8 of 29
Participating Settlement Class Members will receive any money in connection with this Settlement.
2.29 Parties. Plaintiff and Defendants and, in the singular, “Parties” refers to any of them, as the context makes apparent.
2.30 Plaintiff. The named plaintiff in this Action, Chelsea Koenig.
2.31 Plaintiff’s Counsel. Connolly Wells & Gray, LLP, Carlson Lynch Sweet Kilpela & Carpenter, LLP, and the Kehoe Law Firm, P.C.
2.32 Preliminary Approval Order. The document substantially in the form attached hereto as Exhibit B, which will be submitted to the Court by the Parties to seek (a) preliminarily approval of this Settlement Agreement; (b) dissemination of Class Notice; (c) approval of the proposed form of Class Notice; (d) certification a Fed. R. Civ. P. 23(b)(3) settlement only class; (e) appointment of Chelsea Koenig as class representative and the law firm Connolly Wells & Gray, LLP as Class Counsel; and (f) a finding that the proposed manner of serving the Class Notice to the members of the Settlement Class is the best notice practicable under the circumstances.
2.33 Released Persons. Defendants and their past, present, and future members, parents, affiliates, subsidiaries, divisions, predecessors, successors, partners, joint venturers, affiliated organizations, shareholders, insurers, reinsurers and assigns, and each of Primanti Bros. Corporation’s past, present and future officers, directors, trustees, agents, employees, attorneys, contractors, representatives, divisions, units, branches and any other persons or entities acting on Defendants’ behalf.
2.34 Releasing Persons. Every member of the Settlement Class and his or her respective heirs, beneficiaries, devisees, legatees, executors, administrators, trustees, conservators, guardians, estates, personal representatives, successors-in-interests, and assigns.
2.35 Request for Exclusion. The document substantially in the form attached hereto as Exhibit E wherein a Tipped Employee who worked for Defendants during the Class Period and would otherwise be a member of the PA Class requests to be excluded from the terms of this Settlement. It is stipulated and agreed by the Parties that any individual who files a Request for Exclusion by the Bar Date shall not receive any benefit under this Settlement Agreement nor be bound by the Settlement Agreement’s terms and conditions.
2.36 Restaurants. The restaurant establishments operated by Defendants and doing business as “Primanti Bros.” Excluded from this definition is any establishment doing business as “Primanti Bros.” in the State of Florida and any sport stadium in the City of Pittsburgh, Pennsylvania.
2.37 Review Proceeding. “Review Proceeding” will have the meaning set forth in Section 2.15.
- 7 -
Case 2:16-cv-01402-NBF Document 69-1 Filed 04/16/18 Page 9 of 29
2.38 Service Payment. The amount to be approved by the Court for payment to Plaintiff Chelsea Koenig in recognition for her efforts in assisting in the prosecution of this Action on behalf of the Settlement Class. The Parties stipulate and agree that Plaintiff shall not seek a Service Payment in excess of $5,000.00 in this Action.
2.39 Settlement. The resolution of the Action pursuant to the agreement of the Parties on the terms and conditions as set forth in this Settlement Agreement.
2.40 Settlement Amount. The $2,100,000.00 payment that Defendants will pay to settle the Action as described in this Settlement Agreement, inclusive of Class Counsel’s fees and costs, the Service Payment, and the Claims Administrator’s fees and expenses. The Settlement Amount may remain in Defendant’s general funds until required to be provided to the Claims Administrator for distribution pursuant to Section 4. Except as set forth in this Settlement Agreement, Defendants may not be called upon or required to contribute additional monies above the Settlement Amount under any circumstances whatsoever. Under no circumstances whatsoever shall any portion of the Settlement Amount revert to Defendants.
2.41 Settlement Agreement. This Settlement Agreement, including any modifications or amendments adopted pursuant to Section 8.4.
2.42 Settlement Check. Checks issued to Participating Settlement Class Members in the amount of their individual Settlement Payment. Each Settlement Check shall contain release language on its back in conformity with Section 4.11.
2.43 Settlement Class. Plaintiff and members of the PA Class and FLSA Class.
2.44 Settlement Conditions. Each of conditions and obligations set forth in Section 3 of this Settlement Agreement that must either be satisfied or waived in writing by the Party entitled to the benefit of the condition or obligation.
2.45 Settlement Payment. The payment to which a Participating Settlement Class Member will receive pursuant to the Settlement Agreement.
2.46 Tipped Employee. Any individual employed by Defendants during the Class Period at one or more of Defendants’ Restaurants where Defendants did not pay that individual the full minimum wage as they claimed or attempted to claim a “tip credit” for that employee pursuant to Section 203(m) of the FLSA. Such employees include bartenders, servers, and/or food runners.
3. SETTLEMENT CONDITIONS
The Parties stipulate and agree that each of the Settlement Conditions set forth in this Section is a material term. Except as otherwise provided in this Settlement Agreement, the Parties will use reasonable efforts to cause each of the following Settlement Conditions to occur and will support
- 8 -
Case 2:16-cv-01402-NBF Document 69-1 Filed 04/16/18 Page 10 of 29
approval of the Settlement before the Court.
3.1 Preliminary Approval of Settlement Agreement by the Court. On or before December 22, 2017, the Parties will submit this Settlement Agreement (including all exhibits) to the Court for preliminary approval and will jointly request entry of a Preliminary Approval Order substantially in the form attached hereto as Exhibit B.
3.2 Certification of Settlement Class. The Court shall grant certification of the FLSA Class and the PA Class, with an ending date of December 31, 2016. For settlement purposes only, and to effectuate this Settlement Agreement, Defendant will not object to certification set forth herein.
3.3 Certification by the Claims Administrator of the Total Hours. Pursuant to Section 4.6, the Claims Administrator shall either (i) certify that no adjustment to the Settlement Amount is necessary or (ii) confirm that an adjustment is necessary due to a deviation in the Total Hours. Such a certification shall occur at least ten (10) days before the Final Approval Hearing. Said certification can be accomplished through notifying Class Counsel and Defendants’ Counsel.
3.4 Entry of Final Approval Order by the Court. The Parties will jointly request that the Court schedule a Final Approval Hearing within 100 calendar days after entry of the Preliminary Approval Order. At the Final Approval Hearing, the Parties will jointly move for entry of a Final Approval Order, substantially in the form attached hereto as Exhibit C.
3.5 Defendants Paying the Settlement Amount. Within five business days of entry of the Final Approval Order, Defendants will deposit the Settlement Amount into an interest- bearing escrow account established and maintained by the Claims Administrator.
3.6 Final Approval Order Becoming Final. If the Court denies approval of any material term of the Settlement, whether initially, or if a Review Proceeding has been instituted, then after the conclusion of any Review Proceeding, any Party may terminate the Settlement Agreement under Section 7. If the Court does not enter the Final Approval Order or if the Final Approval Order does not become Final then any Party may terminate this Settlement Agreement pursuant to Section 7.
4. TERMS OF SETTLEMENT
4.1 Settlement Amount. Defendant will pay the Settlement Amount, which includes Class Counsel’s fees and costs as awarded by the Court, any Service Payment, and the Claims Administrator’s fees and expenses under the Settlement Agreement. Also being paid from the Settlement Amount will be all Participating Settlement Class Members’ claims. In return for the Settlement Amount, Defendant will obtain (among other things) the releases described in Section 5.
- 9 -
Case 2:16-cv-01402-NBF Document 69-1 Filed 04/16/18 Page 11 of 29
4.2 Class Certification. In connection with preliminary and final approval of the proposed Settlement, Plaintiff will, through Class Counsel, seek orders (preliminary and final, respectively) certifying the PA Class pursuant to Fed. R. Civ. P. 23(b)(3). The Plaintiff will also seek certification of the FLSA Class.
4.3 Preliminary Approval. The Parties will use reasonable efforts to enable the Plaintiff to file a motion (“Preliminary Approval Motion”) with the Court for the issuance of a Preliminary Approval Order, substantially in the form attached hereto as Exhibit B, which, among other things, will (a) preliminarily approve this Settlement Agreement; (b) direct the time and manner of the Notice Packet to be served upon the Settlement Class; (c) find that the proposed form of Class Notice fairly and adequately (i) describes the terms and effect of this Settlement Agreement, (ii) provides notice to the Settlement Class of the time and place of the Final Approval Hearing and (iii) describes how the recipients of the Class Notice may object to the Settlement; and (d) find that the proposed manner of serving the Class Notice to the members of the Settlement Class is the best notice practicable under the circumstances.
4.4 Cooperation. The Parties will, in good faith, take reasonable steps to (a) secure expeditious entry of the Preliminary Approval Order by the Court; (b) seek a date for the Final Approval Hearing within 100 calendar days after entry of the Preliminary Approval Order; and (c) and seek entry of the Final Approval Order.
4.5 Retention of Claims Administrator. The Claims Administrator will be responsible for the claims-administration process and distribution to Class Members as provided herein. Defendant will cooperate with the Claims Administrator and assist it in any reasonable way possible in administering this Settlement Agreement. Claims Administrator fees are to be paid out of the Settlement Amount. The Claims Administrator will provide Class Counsel and Defense Counsel with a final bill of its fees no later than ten (10) days before the Final Approval Hearing.
4.6 Class Information. Within fourteen (14) calendar days after the Court enters a Preliminary Approval Order, Defendants will provide the Claims Administrator with a list, in electronic form, containing the following information for Plaintiff and for each Tipped Employee: name, last known address, last known telephone number(s), last known email address(es), Social Security Number, hourly rate of pay paid by Defendants (the “cash wage” paid pursuant to Section 203(m)), number of hours recorded in Defendants’ timekeeping system, the dates employed by Defendants at any time during the Class Period. At the same time, Defendants will also provide Class Counsel with a list, in electronic form, containing following information for each Tipped Employee during the Class Period: name, last known address, and dates employed by Defendants. The Parties stipulate and agree that they will each cooperate and use their best efforts to provide the Claims Administrator any information the Claims Administrator requests in order to facilitate its duties and obligations set forth in this Settlement Agreement.
- 10 -
Case 2:16-cv-01402-NBF Document 69-1 Filed 04/16/18 Page 12 of 29
(A) Total Hours. Defendants have represented that during the Class Period, they claimed a “tip credit” for 2,318,501.74 hours worked by the Tipped Employees. Should during the course of administering this Settlement, it be determined that the amount of actual hours Defendants claimed a “tip credit” for deviates by three percent (3%) or more from Defendants’ representation, the Settlement Amount shall be adjusted on a “dollar for dollar” basis.
4.7 Calculation of Settlement Payments for Plaintiff and Settlement Class Members.
(A) Estimated Settlement Payment. The Notice Packet will contain an Estimated Settlement Payment for the individual member of the Settlement Class to whom it was mailed. The Claims Administrator will calculate the Estimated Settlement Payment in four steps:
(1) The Claims Administrator will deduct from the Settlement Amount (i) the anticipated amount of attorneys' fees to be requested (1/3 of the Settlement Amount), plus estimated expenses of Plaintiff’s Counsel, (ii) the maximum Service Payment sought for the Plaintiff, and (iii) the estimated fees and expenses of the Claims Administrator. The resulting number will be referred to as the “Estimated Net Settlement Amount.”
(2) For each Tipped Employee, the Claims Administrator will total the amount of tip credit taken by Defendants for all hours worked as a Tipped Employee during the Class Period. For example, if an individual was paid $2.83 per hour, resulting in Defendants taking a tip credit of $4.42 per hour, and that employee worked 100 hours during the Class Period, that individual Tipped Employee would be owed $442.00. This number will be referred to as the “Estimated Individual Recovery Amount.”
(3) The Estimated Individual Recovery Amounts for all Tipped Employees will then be added together by the Claims Administrator to determine the “Class Members’ Total Recovery Amount.” The Estimated Net Settlement Amount will then be divided by the Class Members’ Total Recovery Amount.
(4) The Claims Administrator will then multiply the resulting fractional amount by a Class Member’s Individual Recovery Amount to determine that Tipped Employee’s “Estimated Settlement Payment.”
(5) Upon receipt of the Notice Packet, any Tipped Employee who wishes to challenge either (i) the calculation of his or her Estimated Settlement Payment or (ii) the required deductions set forth within Defendants’ payroll records (e.g., garnishments, tax liens, child support) must submit a written, signed declaration to the Claims Administrator for receipt by the
- 11 -
Case 2:16-cv-01402-NBF Document 69-1 Filed 04/16/18 Page 13 of 29
Claims Administrator on or before the Bar Date. The Claims Administrator will resolve the challenge and make a final and binding determination without hearing or right of appeal.
(B) Settlement Payment. Only Participating Settlement Class Members will receive money in connection with this Settlement. Once the Settlement becomes Final, the Claims Administrator will calculate Settlement Payments for Participating Settlement Class Members in five steps:
(1) The Claims Administrator will deduct from the Settlement Amount the following amounts as awarded or permitted by the Court: (i) Class Counsel’s attorneys’ fees and expenses, (ii) the Service Payment, if any, to the Plaintiff, and (iii) the fees and expenses of the Claims Administrator. The resulting number will be referred to as the “Net Settlement Amount.”
(2) For each Participating Settlement Class Member, the Claims Administrator will total the amount of tip credit taken by Defendants for all hours worked as a Tipped Employee during the Class Period. The Claims Administrator will then add the total amounts owed for all hours worked for each Participating Settlement Class Member as a Tipped Employee. This number will be referred to as the “Participating Individual Recovery Amount.”
(3) The Participating Individual Recovery Amount for all Participating Settlement Class Members will then be added together by the Claims Administrator to determine the “Participating Settlement Class Members’ Total Recovery Amount.”
(4) The Net Settlement Amount will be divided by the Participating Settlement Class Members’ Total Recovery Amount.
(5) The resulting fractional amount will then be multiplied by a Participating Individual Recovery Amount to determine that Participating Settlement Class Member’s Settlement Payment.
(6) To avoid a windfall to any individual Participating Settlement Class Member, no Participating Settlement Class Member’s individual settlement payment will be higher than ten times that individual’s Estimated Settlement Payment. Should any Participating Settlement Class Member’s settlement payment be higher than ten times his or her Estimated Settlement Payment, such amount will be reduced accordingly and with such reduction subject redistribution to the other Participating Settlement Class Members. If all Claimants are subject to the above cap, then any reduction shall be subject to a Court-approved Cy Pres Distribution.
- 12 -
Case 2:16-cv-01402-NBF Document 69-1 Filed 04/16/18 Page 14 of 29
(C) For purposes of performing the calculations set forth above, the Claims Administrator will rely on the hours recorded in Defendants’ timekeeping system when determining the hours worked for Tipped Employees.
(D) Plaintiff, Class Counsel, Defendant, and Defendant’s Counsel will have no responsibility for, or liability arising from, the Claims Administrator’s calculations of the distribution of the Settlement Amount including, without limitation, the calculation of an individual Participating Settlement Class Member’s Settlement Payment.
(E) Plaintiff is a member of the Settlement Class by operation of this Settlement Agreement. Plaintiff’s Settlement Payment will be calculated in accordance with the formula set forth above.
(F) Ten days before the Final Approval Hearing, the Claims Administrator will certify jointly to Class Counsel and Defendants’ Counsel a list of all Participating Settlement Class Members, indicating for each member of the Settlement Class the total Settlement Payment due to that individual pursuant to this Settlement Agreement. The Claims Administrator will also indicate whether any challenges to a Participating Settlement Class Member’s Settlement Payment has been received and, if so, the status of that challenge.
4.8 Class Notice.
(A) The Claims Administrator will disseminate the Class Notice by the following means: mail and email. The Claims Administrator will mail the Notice Packet via First Class Mail to each Tipped Employee within fourteen (14) calendar days after the Class Administrator receives the class list and the data required to perform the preliminary calculations. The Claims Administrator will (among other things) provide estimated settlement payment amounts in the Class Notice, inform Tipped Employees that only individuals submitting a timely Claim Form to the Claims Administrator will receive any money under this Settlement, and include a prepaid, business reply envelope with the mailing (to facilitate return of Claim Forms).
(B) Before mailing, the Claims Administrator will attempt to confirm the accuracy of the addresses of each member of the Settlement Class through the United States Post Office’s National Change of Address (“NCOA”) database. If a Notice Packet is returned as undeliverable, the Claims Administrator will perform one skip trace and resend by First Class United States Mail the Court-approved Class Notice once only to those members of the Settlement Class for whom it obtains more recent addresses.
(C) Within three days after the Claims Administrator effectuates mailing of the Notice Packet, the Claims Administrator will also email a pdf copy of the Class Notice to
- 13 -
Case 2:16-cv-01402-NBF Document 69-1 Filed 04/16/18 Page 15 of 29
any Tipped Employee for which Defendants provided that Tipped Employee’s last known email address. The email shall also include a statement that the full Notice Packet has been mailed to the individual’s last known address.
(D) Fifteen (15) days before the Bar Date, the Claims Administrator shall mail a reminder post card to any Tipped Employee who has not yet submitted a Claim Form.
(E) The Claims Administrator will mail a Court-approved Class Notice to any Tipped Employee who contacts the Claims Administrator during the time period between the initial mailing of the Class Notice and the Bar Date and requests that a Class Notice be re-mailed. During the Notice Period, no other communications will be sent by either Party to Tipped Employees. Class Counsel may nevertheless communicate with Plaintiff and respond to inquiries they receive from Tipped Employees during the Notice Period. Defendant may nevertheless communicate with its current employees in response to inquiries regarding any matter, excluding the Action, the Settlement, or this Settlement Agreement. For any inquiry regarding the Action, the Settlement, and/or the Settlement Agreement, Defendants shall advise that Tipped Employee to contact Class Counsel.
(F) Upon mailing of the Notice Packet, the Claims Administrator shall establish a settlement website (or a link on their existing website) to assist in providing Tipped Employees with information regarding the Settlement. Such website may include (i) the Complaint; (ii) the Settlement Agreement; (iii) a copy of the Class Notice; (iv) any orders entered by the Court regarding the Settlement; and (v) a list of frequently asked questions and their corresponding answers that is mutually agreed upon by the Parties. Such website will be taken down within ten (10) days of the Settlement becoming Final.
(G) The Claims Administrator will provide to Defendant’s Counsel and Class Counsel at least once every two weeks, a report concerning any objections raised by Settlement Class members. Further, fourteen (14) days before the Final Approval Hearing, the Claims Administrator will provide Defendant’s Counsel and Class Counsel with a cumulative report detailing any objections received from Settlement Class members.
4.9 Objections. Only Settlement Class members may object to the Settlement. To object to the Settlement, the individual must send a written objection to the Claims Administrator no later than the Bar Date. The objection must set forth, in clear and concise terms, the legal and factual arguments supporting the objection. Members of the Settlement Class who wish to object and be represented by counsel will do so at their own expense. No Settlement Class member will have any claim to any part of the Settlement Amount based, in whole or in part, on their retention of outside counsel. Should the Claims Administrator receive any objection, it will promptly notify Defendant’s Counsel and
- 14 -
Case 2:16-cv-01402-NBF Document 69-1 Filed 04/16/18 Page 16 of 29
Class Counsel and will provide each with the contact information for the objecting Settlement Class member.
4.10 Opt-Out/Request for Exclusion.
(A) For a PA Class Member to exclude himself or herself from the Settlement (“opting-out”), he or she must write and submit a Request for Exclusion. The Parties stipulate and agree that the following shall also constitute a valid Request for Exclusion: if a PA Class Member writes the Claims Administrator a letter that states: “I request to be excluded from the settlement in Koenig v. Primanti Corporation, et al., Case No. 2:16-CV-01402 (W.D. Pa.). I affirm that I was employed by Defendants as a Tipped Employee on one or more days between September 9, 2013 and December 31, 2016.” The PA Class Member who wishes to opt-out must also include his or her full name, address, and telephone number. PA Class Members may not exclude themselves by telephone, fax, or email.
(B) All Requests for Exclusion must be submitted by the Bar Date.
(C) The date of submission is deemed to be the earlier of (i) the date the form is deposited in the U.S. Mail, postage pre-paid, as evidenced by the postmark; or (ii) the date the form is received by the Claims Administrator.
(D) Any PA Class Member who submits a timely and valid Request for Exclusion will not (i) be bound by any orders or judgments entered in this Litigation; (ii) be entitled to benefits or relief under this Settlement Agreement; (iii) gain any rights by virtue of this Settlement Agreement; or (iv) be entitled to object to the Settlement or appeal from any order of this Court.
(E) Upon receipt of a Request for Exclusion, the Claims Administrator will notify Class Counsel and Defendants’ Counsel and will provide Class Counsel with such individual’s last known telephone number.
(F) If a fully completed and properly executed Request for Exclusion is not received by the Claims Administrator from a PA Class Member by the Bar Date, then that PA Class Member will be deemed to have forever waived his or her right to opt- out of the Settlement Class.
(G) If a PA Class Member submits both a timely Claim Form and a timely Request for Exclusion, the Claims Administrator will promptly notify and send copies of the Claim Form and the Request for Exclusion to both Class Counsel and Defendants’ Counsel and will provide Class Counsel with such individual’s last known telephone number. The Claims Administrator will attempt to contact that individual to ascertain her or her intent. If those efforts are unsuccessful, whichever document was mailed later will govern, and if both documents were
- 15 -
Case 2:16-cv-01402-NBF Document 69-1 Filed 04/16/18 Page 17 of 29
mailed simultaneously, or the sequence of mailings cannot be determined, then the Claim Form will govern.
4.11 Final Approval.
(A) Plaintiff will file a motion seeking final approval of the Settlement (“Final Approval Motion”) with the Court no later than 30 calendar days before the Final Approval Hearing is scheduled. In the Final Approval Motion, Plaintiff will request that the Court determine, at or after the Final Approval Hearing (a) whether to enter a Final Approval Order, substantially in the form attached as Exhibit C, granting final approval of the Settlement, dismissing the Action with prejudice and entering judgment pursuant to Federal Rule of Civil Procedure 54(b); (b) whether the distribution of the Settlement Amount set forth in this Settlement Agreement should be approved or modified; (c) the amount of legal fees and expenses to be awarded to Class Counsel as contemplated by Section 4.12 of this Settlement Agreement; and (d) the amount of Service Payment, if any, to be awarded to the Plaintiff.
(B) The Final Approval Motion will ask the Court to (a) approve this Settlement Agreement; (b) certify the Settlement Class; and (c) approve and enforce the Released Claims as set forth in Section 5 of this Agreement.
(C) At the Final Approval Hearing, Plaintiff and Defendants will request that the Court rule on any Objections to the Settlement by any Settlement Class members and find that the Settlement is fair, reasonable and adequate, and enter the Final Approval Order.
(D) The Parties agree to support entry of the Final Approval Order, including supporting the Settlement through any Review Proceeding. Defendants will not take any position with respect to Class Counsel’s fee and expense request or Plaintiff’s Service Payment, so long as disposition of those matters is substantially in accordance with the provisions of this Settlement Agreement. The Parties otherwise covenant and agree to reasonably cooperate with one another and to take all actions reasonably necessary to effectuate the Settlement Agreement and to obtain a Final Approval Order.
4.12 Distribution of Settlement Payments to Participating Settlement Class Members.
(A) Within five (5) business days after the Court enters a Final Approval Order, Defendants will provide the Claims Administrator with the Settlement Amount.
(B) Within fifteen (15) calendar days after the Final Effective Date, the Claims Administrator will mail the Settlement Payments to the Participating Settlement Class Members’ last known addresses.
- 16 -
Case 2:16-cv-01402-NBF Document 69-1 Filed 04/16/18 Page 18 of 29
(C) The Parties agree that each Settlement Payment to be issued to each Participating Settlement Class Member will be separated into two payments: (i) fifty percent (50%) will be allocated to the claims asserted in the Action for alleged unpaid wages and other alleged wage-related claims, and (ii) fifty percent (50%) will be allocated to the claims asserted in the Action for alleged liquidated damages, penalties, interest, and other relief. Each check sent to a Participating Settlement Class Member will clearly identify whether it is a check for (i) wages or (ii) liquidated damages/other relief.
(1) The parts allocated to claims for alleged unpaid wages and other alleged wage-related damages will be subject to all required employee paid payroll taxes and deductions (e.g., federal income taxes, state income taxes, employee’s share of FICA taxes, and other state-specific statutory deductions) and other required deductions set forth within Defendants’ payroll records (e.g., garnishments, tax liens, child support).
(2) The part allocated to alleged liquidated damages and other relief will be characterized as non-wage income to the recipient and shall not be subject to any withholdings. The Claims Administrator will report the wage parts to each Participating Settlement Class Member on an IRS Form W-2 and the non-wage part on an IRS Form 1099.
(3) The Claims Administrator will be responsible for issuing the settlement checks, less required withholdings and deductions, to each Participating Settlement Class Member and mailing the Settlement Checks, W-2s and 1099s to the Participating Settlement Class Members.
(D) The back of each check distributed to Participating Settlement Class Members will state that “the check must be cashed within one-hundred eighty days (180) days or it will become void.”
(1) For PA Class Members, the back of each check will also state “by endorsing this check, I acknowledge and agree that I am releasing Defendant from any and all federal claims that were or could have been asserted in the Action, including claims brought pursuant to the Fair Labor Standards Act.” The Claims Administrator will also send a cover letter containing the same information.
(2) For Participating Settlement Class Members who are not also PA Class Members the back of each check will also state “by endorsing this check, I acknowledge and agree that I am releasing Defendant from any and all federal and state claims that were or could have been asserted in the Action, including claims brought pursuant to all federal and/or state wage and hour laws.” The Claims Administrator will also send a cover letter containing the same information.
- 17 -
Case 2:16-cv-01402-NBF Document 69-1 Filed 04/16/18 Page 19 of 29
If any Settlement Check is not negotiated in the one-hundred eighty (180) day period, that Settlement Check will be voided, and the Claims Administrator will place a stop-payment on the check. Participating Settlement Class Members with such voided checks will have irrevocably waived any right in or claim to a Settlement Payment, but the Settlement Agreement and all releases relating to their Released Claims will nevertheless be binding upon them. Any unclaimed funds resulting from such voided Settlement Checks shall be part of the Cy Pres Distribution.
(E) Neither Defendant, Defendant’s Counsel, Class Counsel, Plaintiff, nor the Claims Administrator will have any liability for lost or stolen checks, for forged signatures on checks, or for unauthorized negotiation of any checks funded by any portion of the Settlement Amount.
(F) Without limiting the foregoing, if a Participating Settlement Class Member notifies the Claims Administrator that he or she believes that his or her Settlement Check has been lost or stolen, the Claims Administrator will immediately notify counsel for the Parties and stop payment on any such check.
(1) If the Settlement Check in question has not been negotiated before the stop payment order, the Claims Administrator will issue a replacement check, from which the fees, if any, associated with the stop payment order will first be deducted. The Participating Settlement Class Member will have an additional thirty (30) calendar days to negotiate the re-issued check from the date of re-mailing.
(2) If any Settlement Check is not negotiated in that period of time, that Settlement Check will be voided. The funds from said Settlement Check will be considered part of the Cy Pres Distribution.
(G) In addition to the Settlement Amount, Defendants will be responsible for any and all applicable employer tax contributions associated with wage payments, including but not limited to Defendants’ share of the FICA and FUTA taxes, with respect to the amounts treated as wages. The Claims Administrator will calculate the employer share of taxes and provide Defendants with the total employer tax contributions. Defendants will deposit with the Claims Administrator the calculated employer tax contributions before the mailing of the Settlement Payments to Participating Settlement Class Members.
(H) Neither Plaintiff, Defendants, Class Counsel, nor Defendants’ Counsel has provided nor will provide any Settlement Class member with any advice regarding the tax consequences of this Settlement Agreement.
4.13 Cy Pres Distribution. If any portion of the Settlement Amount becomes, by operation of this Settlement Agreement, subject to a Cy Pres Distribution, the Claims Administrator
- 18 -
Case 2:16-cv-01402-NBF Document 69-1 Filed 04/16/18 Page 20 of 29
shall distribute said funds to the recipient selected by the Court and set forth in the Final Approval Order. The Parties shall jointly propose three potential cy pres recipients from which the Court may, if it so chooses, select from. The Parties shall use their best efforts to agree upon organizations that provide, among other things, legal aide to low-income citizens of the Commonwealth of Pennsylvania.
4.14 Fees and Expenses Borne By Defendant. Defendants will bear sole responsibility for Defendants’ Counsel’s fees, expenses, and costs. Further, Defendants will bear sole responsibility for all fees and costs associated with dissemination of any notice required by CAFA. In addition, Defendants will bear sole responsibility for the payment of the employer’s portion of payroll taxes regarding the part of the Settlement Payments attributable to wages. Further, should this Settlement not become Final for any reason, Defendants will bear all responsibility for any fees or expenses incurred by the Claims Administrator. Should this Settlement become Final, under no circumstances whatsoever shall any portion of the Settlement Amount revert to Defendants.
4.15 Class Counsel’s Fees and Costs.
(A) Class Counsel may make an application to the Court for an award of Plaintiff’s Counsel’s fees in an amount not to exceed one-third of the Settlement Amount, plus reasonable expenses as awarded by the Court. Such application will be filed in connection with the Parties’ Final Approval Motion.
(B) If the Court rules that any amount requested by Class Counsel for attorneys’ fees, expenses or costs is excessive and reduces the same, only the reduced amount will be deemed to be Class Counsel’s fees and costs for purposes of this Settlement Agreement.
(C) Upon the Final Effective Date, the Claims Administrator will wire transfer the amount representing Class Counsel’s attorneys’ fees and expenses approved by the Court to Class Counsel. Class Counsel may, at their election, seek an order from the Court awarding disbursement of one-half of the attorneys’ fees and expenses approved by the Court any time after entry of the Final Approval Order should an appeal be filed in this Action. Defendants agree not to oppose such a motion.
(D) Before any payment of any amount designated as Class Counsel’s fees and costs, Class Counsel will provide the Claims Administrator with all information necessary to effectuate such payments (e.g., a fully executed IRS Form W-9). Class Counsel will be issued an IRS Form 1099 for their award of Class Counsel’s fees and costs. Class Counsel will be solely responsible for how the amount is to be allocated amongst the firms comprising Plaintiff’s Counsel and Defendants will have no responsibility whatsoever for this allocation.
- 19 -
Case 2:16-cv-01402-NBF Document 69-1 Filed 04/16/18 Page 21 of 29
(E) Should the Settlement not become Final, Class Counsel will, within five (5) days of receiving such request, promptly return all sums distributed as attorneys’ fees and expenses to Defendants.
(F) Payment of Class Counsel’s fees and costs as set forth in this Settlement Agreement and the Court’s Final Approval Order will constitute full and final satisfaction of any and all obligations by Defendants to pay any person, attorney or law firm (including but not limited to Class Counsel) for attorneys’ fees, expenses or costs incurred on behalf of the Settlement Class and will relieve the Released Persons of any other claims or liability to any person for any attorneys’ fees, expenses, and costs to which any person may claim to be entitled on behalf of the Settlement Class for this Action. Defendants will have no additional liability to Plaintiff’s Counsel for fees and costs, including without limitation, administrative costs, expert fees and costs, or attorneys’ fees and costs.
4.16 Service Payment.
(A) Class Counsel may also make an application to the Court for a one-time Service Payment award to Plaintiff, in recognition of the work and services Ms. Koenig contributed to the case including, but not limited to, meetings with Plaintiff’s Counsel, assumption of risks, serving as a class representative, and related activities (including responding to discovery, sitting for a deposition, and helping counsel prepare for the mediations). The Service Payment will not exceed five thousand dollars ($5,000.00). The final amount of the Service Payment will be determined by the Court.
(B) The Claims Administrator will make the Service Payment to Plaintiff in the amount approved by the Court within the same time period for distributing Settlement Payment amounts to the Participating Settlement Class Members.
(C) The Service Payment will be treated as non-wage income, and the Claims Administrator will issue a Form 1099 to Plaintiff reflecting the value of the payment.
5. RELEASE OF CLAIMS; ASSIGNMENT
5.1 Release of Claims.
(A) Effective as of the Final Effective Date, the Releasing Persons will be deemed to forever and fully release and discharge Defendants, and release and hold harmless the Released Persons, as follows (collectively "Released Claims"):
(i) PA Class Members release Released Persons from any and all Pennsylvania wage-related claims from September 9, 2013 through the date of entry of the Court’s Preliminary
- 20 -
Case 2:16-cv-01402-NBF Document 69-1 Filed 04/16/18 Page 22 of 29
Approval Order, including but not limited to any claims pursuant to the PMWA and PWPCL that such class member has, had, might have or might have had against any of the Released Persons that in any way related to any of the facts or claims that were alleged or that could have been alleged in the Action or by reason of the negotiations leading to this Settlement, even if presently unknown or un- asserted (the “PA Released Claims”).
(ii) PA Class Members that are also Participating Settlement Class, upon endorsement of their individual Settlement Check identified as their wage check, release Released Persons from any and all federal wage-related claims from September 9, 2013 through the date of entry of the Court’s Preliminary Approval Order, including but not limited to any claims pursuant to the FLSA that such individual has, had, might have or might have had against any of the Released Persons that in any way related to any of the facts or claims that were alleged or that could have been alleged in the Action or by reason of the negotiations leading to this Settlement, even if presently unknown or un-asserted (the "FLSA Released Claims").
(iii) Participating Settlement Class Members that are not also a PA Class Members upon endorsement of their individual Settlement Check identified as their wage check, release Released Persons from any and all wage-related claims from September 9, 2013 through the date of entry of the Court’s Preliminary Approval Order, including but not limited to any claims pursuant to the FLSA and any and all state wage-related claims of any kind, including but not limited to any claims pursuant to the state laws of Ohio, West Virginia, Indiana, Maryland, and/or Michigan that such individual has, had, might have or might have had against any of the Released Persons that in any way related to any of the facts or claims that were alleged or that could have been alleged in the Action or by reason of the negotiations leading to this Settlement, even if presently unknown or un-asserted (the "State Law Released Claims").
(B) The Releasing Persons further covenant and agree that, since they are settling disputed claims, they will not accept, recover or receive any back pay, liquidated damages, other damages, penalties, or any other form of relief based on any of the Released Claims asserted or settled in the Action which may arise out of, or in connection with any other individual, representative, class or any administrative - 21 -
Case 2:16-cv-01402-NBF Document 69-1 Filed 04/16/18 Page 23 of 29
remedies pursued by any individual(s) or any federal, state or local governmental agency against any of the Released Persons. Releasing Persons further acknowledge and agree that they are precluded from pursuing any Released Claim Releasing Persons has, had, might have or might have had against any of the Released Persons based on any act or omission that occurred during the Class Period.
5.2 All members of the Settlement Class will be bound by the terms and conditions of this Settlement Agreement, the Final Approval Order, the judgment, and the releases set forth herein.
5.3 Defendants’ Releases. Upon the Final Effective Date, Defendants will conclusively, absolutely, unconditionally, irrevocably, and forever release and discharge Plaintiff and Class Counsel (“Defendant’s Released Persons”) from any and all claims, counterclaims, crossclaims, complaints, charges, demands, actions, causes of action, judgments, debts, expenses, losses, liabilities, and obligations, including attorneys’ fees, expenses and costs, arising from or related to the prosecution and/or resolution of the Action (“Defendant’s Released Claims”).
5.4 Scope of Releases. The release and discharge set forth in Section 5 will not include the release or discharge of any rights or duties of the Parties arising out of this Settlement Agreement, including the express warranties and covenants contained herein.
5.5 No Assignment. Plaintiff represents and warrants that she has not assigned or transferred, or purported to assign or transfer, to any person or entity, any claim or any part thereof or interest therein, including, but not limited to, any interest in the Action, or any related action.
6. NON-ADMISSION OF LIABILITY.
6.1 By entering into this Settlement Agreement, Defendants in no way admits any violation of law or any liability whatsoever.
6.2 Likewise, by entering into this Settlement Agreement, Defendants in no way admit to the suitability of this case for class or collective action litigation other than for purposes of settlement. Settlement of the Action, negotiation and execution of this Settlement Agreement, and all acts performed or documents executed pursuant to or in furtherance of this Settlement Agreement or the Settlement (a) are not evidence of any wrongdoing or liability on the part of Defendants or of the truth of any of the factual allegations in the Complaint filed in the Action; (b) are not an admission or evidence of fault or omission on the part of Defendants in any civil, criminal, administrative or arbitral proceeding; and (c) are not an admission or evidence of the appropriateness of these or similar claims for class certification or administration or collective action treatment other than for purposes of administering this Settlement Agreement.
- 22 -
Case 2:16-cv-01402-NBF Document 69-1 Filed 04/16/18 Page 24 of 29
7. TERMINATION.
7.1 Grounds for Settlement Termination. Any Party may terminate the Settlement Agreement if the Court declines to enter the Final Approval Order or judgment in the form submitted by the Parties, or if a Court of Appeals reverses the entry of a Final Approval Order or judgment. Additionally, the following events are also grounds for termination:
(1) Either Party may terminate this Settlement Agreement should an adjustment to the Settlement Amount be necessary pursuant to Section 4.6 and no adjustment is made within five business days of the Claims Administrator advising Class Counsel and Defendants’ Counsel of the need for said adjustment.
(2) Plaintiff may terminate this Settlement Agreement should Defendants file for bankruptcy prior to the Final Effective Date.
(3) In the event that Defendants declare bankruptcy prior to disbursement of the Settlement Amount to the Participating Settlement Class Members and any bankruptcy trustee seizes any portion of the Settlement Amount, any releases granted by the Releasing Parties shall be void irrespective of whether Plaintiff has exercised her right to terminate.
(4) Defendants may terminate this Settlement Agreement if more than ten percent (10%) of the PA Class Members opt-out of this Settlement by filing timely Requests for Exclusion.
7.2 Procedures for Termination. To terminate this Settlement Agreement as specified above, the terminating Party will give written notice to the other Party no later than fourteen (14) calendar days after the terminating Party learns that the applicable ground for termination has been satisfied.
7.3 Effect of Termination.
(1) Should this Settlement Agreement be terminated pursuant to Section 7, this Settlement Agreement will not be offered, received, or construed as an admission of any kind as to liability, damages, whether any class or collective is certifiable, or in any other matter by any Party. Neither the Settlement Agreement, any motions filed, settlement proposals exchanged by the Parties, nor Orders entered pursuant to the Settlement Agreement, will constitute an admission, finding or evidence that any requirement for representative litigation or certification as a class or collective action has been satisfied in this Action or any other action, except for the limited settlement purposes pursuant to the terms of the Settlement Agreement.
- 23 -
Case 2:16-cv-01402-NBF Document 69-1 Filed 04/16/18 Page 25 of 29
(B) If this Settlement Agreement is canceled, rescinded, terminated, voided, or nullified, or the settlement of the Action is barred by operation of law, is invalidated, is not approved or otherwise is ordered not to be carried out by any Court,
(1) the Settlement Agreement will have no force or effect, and no Party will be bound by any of its terms with respect to the terminating Parties;
(2) Defendants will have no obligation to make any payments to Plaintiff, any Participating Settlement Class Member, or Class Counsel, except that Defendants will be responsible for paying the Claims Administrator for services rendered up to the date the Claims Administrator is notified that the Settlement has been terminated; and
(3) any settlement class certified by the Court will be deemed decertified should the Settlement Agreement be terminated and Defendants will retain the right to challenge the certification of any class proposed by Plaintiff.
8. MISCELLANEOUS.
8.1 Parties’ Authority
(A) The signatories hereby represent that they are fully authorized to enter into this Settlement Agreement and bind the Parties hereto to the terms and conditions hereof.
(B) The entity or individual signing this Settlement Agreement on behalf of Defendants represents and warrants that they have authority to sign on behalf of all Defendants and, accordingly bind all Defendants to this Settlement Agreement.
(C) The Class Notice will advise all members of the Settlement Class of the binding nature of the release, and that the release will have the same force and effect upon members of the Settlement Class as if the Settlement Agreement were executed by each member of the Settlement Class.
8.2 Advice of Counsel. In entering into this Settlement Agreement, each Party represents and warrants that it has relied upon the advice of its attorneys, that it has completely read the terms of this Settlement Agreement, and that the terms of this Settlement have been explained to it by its attorneys. Each Party further represents and warrants that it fully understands and voluntarily accepts the terms of the Settlement.
8.3 Admissibility. This Settlement Agreement will be inadmissible as evidence in any proceeding, except as necessary to approve, interpret, or enforce this Settlement Agreement.
- 24 -
Case 2:16-cv-01402-NBF Document 69-1 Filed 04/16/18 Page 26 of 29
8.4 Severability. If any court with original or appellate jurisdiction over this Action issues a Final determination that any part of this Settlement Agreement is not enforceable, the Parties may (but will not be required to) jointly agree in writing to modify this Settlement Agreement to conform with such determination.
8.5 Notices. Any notice, demand or other communication under this Settlement Agreement (other than the Class Notice or other notices given at the direction of the Court) will be in writing and will be deemed duly given upon receipt if it is addressed to each of the intended recipients as set forth below and personally delivered, sent by registered or certified mail (postage prepaid) or delivered by reputable express overnight courier, with a copy by email.
IF TO PLAINTIFF OR THE SETTLEMENT CLASS:
CONNOLLY WELLS & GRAY, LLP Gerald D. Wells, III Email: [email protected] 2200 Renaissance Blvd., Suite 275 King of Prussia, PA 19406 Telephone: (610) 822-3702
IF TO DEFENDANTS:
DRINKER BIDDLE & REATH, LLP Cheryl D. Orr Email: [email protected] 50 Fremont St., 20th Floor San Francisco, California 94105-2235
8.6 Cooperation between the Parties; Further Acts. The Parties will cooperate fully with each other and will use their best efforts to obtain the Court’s approval of this Settlement Agreement and all of its terms. Each of the Parties, upon the request of any other party, agrees to perform such further acts and to execute and deliver such other documents as are reasonably necessary to carry out the provisions of this Settlement Agreement.
8.7 Entire Agreement. This Settlement Agreement constitutes the entire agreement between the Parties with regard to the subject matter contained herein, and all prior and contemporaneous negotiations and understandings between the Parties will be deemed merged into this Settlement Agreement.
8.8 Binding Effect. This Settlement Agreement will be binding upon the Parties and, with respect to Settlement Class members, their spouses, children, representatives, heirs, administrators, executors, beneficiaries, conservators, attorneys and assigns.
- 25 -
Case 2:16-cv-01402-NBF Document 69-1 Filed 04/16/18 Page 27 of 29
8.9 Arm’s Length Transaction; Materiality of Terms. The Parties have negotiated all the terms and conditions of this Settlement Agreement at arm’s length. All terms and conditions of this Settlement Agreement in the exact form set forth in this Settlement Agreement are material to this Settlement Agreement and have been relied upon by the Parties in entering into this Settlement Agreement.
8.10 Captions. The captions or headings of the sections and paragraphs of this Settlement Agreement have been inserted for convenience of reference only and will have no effect upon the construction or interpretation of any part of this Settlement Agreement.
8.11 Construction. The determination of the terms and conditions of this Settlement Agreement has been by mutual agreement of the Parties. Each party participated jointly in the drafting of this Settlement Agreement, and therefore the terms and conditions of this Settlement Agreement are not intended to be, and will not be, construed against any party by virtue of draftsmanship.
8.12 Governing Law. This Settlement Agreement will in all respects be interpreted, enforced and governed by and under the laws of Pennsylvania, without regard to choice of law principles, except to the extent that the law of the United States governs any matter set forth herein, in which case such federal law will govern.
8.13 Continuing Jurisdiction. The Court will retain jurisdiction over the interpretation and implementation of this Settlement Agreement as well as any and all matters arising out of, or related to, the interpretation or implementation of this Settlement Agreement and of the settlement contemplated thereby. The Court will not have jurisdiction to modify the terms of the Settlement Agreement or to increase Defendants’ payment obligations hereunder without the Parties’ agreement.
8.14 Waivers, Modifications, Amendments to be in Writing. No waiver, modification or amendment of the terms of this Settlement Agreement, whether purportedly made before or after the Court’s approval of this Settlement Agreement, will be valid or binding unless in writing, signed by or on behalf of all Parties and then only to the extent set forth in such written waiver, modification or amendment, subject to any required Court approval. Any failure by any Party to insist upon the strict performance by the other party of any of the provisions of this Settlement Agreement will not be deemed a waiver of future performance of the same provisions or of any of the other provisions of this Settlement Agreement, and such party, notwithstanding such failure, will have the right thereafter to insist upon the specific performance of any and all of the provisions of this Settlement Agreement.
8.15 When Agreement Becomes Effective; Counterparts. This Settlement Agreement will become effective upon its execution. The Parties may execute this Settlement Agreement in counterparts, and execution in counterparts will have the same force and effect as if Plaintiff and Defendants had signed the same instrument.
- 26 -
Case 2:16-cv-01402-NBF Document 69-1 Filed 04/16/18 Page 28 of 29 Case 2:16-cv-01402-NBF Document 69-1 Filed 04/16/18 Page 29 of 29 Case 2:16-cv-01402-NBF Document 69-2 Filed 04/16/18 Page 1 of 69
EXHIBIT 2 Case 2:16-cv-01402-NBF Document 69-2 Filed 04/16/18 Page 2 of 69 Case 2:16-cv-01402-NBF Document 69-2 Filed 04/16/18 Page 3 of 69 Case 2:16-cv-01402-NBF Document 69-2 Filed 04/16/18 Page 4 of 69 Case 2:16-cv-01402-NBF Document 69-2 Filed 04/16/18 Page 5 of 69 Case 2:16-cv-01402-NBF Document 69-2 Filed 04/16/18 Page 6 of 69 Case 2:16-cv-01402-NBF Document 69-2 Filed 04/16/18 Page 7 of 69 Case 2:16-cv-01402-NBF Document 69-2 Filed 04/16/18 Page 8 of 69 Case 2:16-cv-01402-NBF Document 69-2 Filed 04/16/18 Page 9 of 69
NOTICE OF CLASS AND COLLECTIVE ACTION SETTLEMENT
YOU ARE NOT BEING SUED. A FEDERAL COURT AUTHORIZED THIS NOTICE. THIS IS NOT A SOLICITATION FROM A LAWYER.
CASE NAME AND DOCKET NUMBER: CHELSEA KOENIG V. PRIMANTI CORPORATION, ET AL., DOCKET NO.: 2:16-cv-01402-NBF
TO: ALL EMPLOYEES OF ANY PRIMANTI BROS. RESTAURANT IN PENNSYLVANIA, OHIO, WEST VIRGINIA, INDIANA, MARYLAND, AND/OR MICHIGAN PAID ON A TIPPED BASIS AT ANY TIME BETWEEN SEPTEMBER 9, 2013 AND DECEMBER 31, 2016 WHO WORKED AS A BARTENDER, SERVER, AND/OR FOOD RUNNER WHERE DEFENDANTS PAID SUCH INDIVIDUAL LESS THAN $7.25 PER HOUR
PLEASE READ THIS NOTICE CAREFULLY, AS IT MAY AFFECT YOUR LEGAL RIGHTS TO RECEIVE PAY RELATED TO AND/OR RESULTING FROM THE POLICIES AND/OR PRACTICES ARISING FROM YOUR EMPLOYMENT WITH PRIMANTI BROS.
IF YOU WISH TO PARTICIPATE IN THE SETTLEMENT OF THIS CLASS AND COLLECTIVE ACTION AND RECEIVE MONEY, YOU MUST COMPLETE AND RETURN THE CLAIM FORM AND RELEASE POSTMARKED ON OR BEFORE APRIL 16, 2018.
IF YOU WISH TO COMMENT IN FAVOR OF THE SETTLEMENT OR OBJECT TO THE SETTLEMENT, OR IF YOU DECIDE NOT TO PARTICIPATE IN THE SETTLEMENT, YOU MUST FOLLOW THE DIRECTIONS PROVIDED IN THIS NOTICE. IF YOU WORKED IN PENNSYLVANIA AND WISH TO EXCLUDE YOURSELF FROM THE SETTLEMENT, YOU MUST PREPARE AND SUBMIT TO THE CLAIMS ADMINISTRATOR A REQUEST FOR EXCLUSION LETTER POSTMARKED ON OR BEFORE APRIL 16, 2018, OR ELSE YOU WILL BE BOUND BY THE SETTLEMENT.
1. Why is this notice being sent?
This notice is to inform you of a Class Action Settlement in the case Koenig v. Primanti Corp. et al., Case No. 16-cv-1402, pending in the United States District Court for the Western District of Pennsylvania (“Lawsuit”). All capitalized terms in this Class Notice are defined in the Settlement Agreement, which is available at www.strategicclaims.net/primanti. If terms are insufficiently identified, discussed or defined in this Notice or if any terms of this Notice conflict with the Settlement Agreement, the terms of the Settlement Agreement shall prevail.
The Plaintiff Chelsea Koenig (“Plaintiff”) in the Lawsuit filed suit against Defendants Primanti Corp. d/b/a Primanti Bros., David Head, Andrew Taub, Demetrios Patrinos, James Chu, Nicholas Nicholas, as well as certain other corporate entities doing business as “Primanti Bros.” (a complete list of the corporate entities is listed in the Settlement Agreement. All of the Individual Defendants and Corporate Defendants are collectively referred to as “Defendants” or “Primanti Bros.” In the Lawsuit, Plaintiff alleges violations of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. §§ 201, et seq ., the Pennsylvania Minimum Wage Act (“PMWA”), the Pennsylvania Wage Payment Collections Law (“WPCL”), and Pennsylvania common law. Pursuant to the Settlement Agreement, the Plaintiff represents two classes of individuals: (i) individuals who worked at any Primanti Bros. restaurant location in the Commonwealth of Pennsylvania, and do not opt-out of the Pennsylvania Class, and (ii) individuals who worked at any Primanti Bros. restaurant location in the following states: Ohio, West Virginia, Indiana, Maryland, and/or Michigan and elect to join this case through the process described herein. In addition, the individual must have worked for Primanti Bros. between September 9, 2013, through December 31, 2016, in one or more of the following positions: bartender, server, and/or food runner (collectively referred to herein as “Tipped Employees”). According to Defendants’ records, you were a Tipped Employee and worked one or more days at a Primanti Bros. restaurant location during the Class Period. The Plaintiff alleged that Defendants failed to properly pay Tipped Employees by, among other things, failing to satisfy the notice requirements of the tip credit provisions in federal and state law; and causing deductions from tips in violation of applicable federal and state law.
Defendants deny Plaintiff’s allegations in their entirety and assert that at all relevant times, they paid their Tipped Employees properly and that they provided proper notice of the tip credit. Defendant asserts that, had this case proceeded, they would have produced facts that demonstrated that Defendant properly paid its employees.
1 Case 2:16-cv-01402-NBF Document 69-2 Filed 04/16/18 Page 10 of 69
After extensive negotiations, the Parties (Plaintiff and Defendants) have reached a settlement of the Lawsuit (the “Settlement Agreement”). The Court has granted preliminary approval of the Settlement and has scheduled a hearing on April 23, 2018 at 9:00 a.m. in Courtroom 5B, United States District Court for the Western District of Pennsylvania, Joseph F. Weis, Jr. U.S. Courthouse, 700 Grant Street, Pittsburgh, PA 15219 to determine whether to grant final approval.
IF YOU ARE ONE OF THE INDIVIDUALS DESCRIBED IN THIS NOTICE WHO IS AFFECTED BY THE PROPOSED SETTLEMENT, YOU MAY GET MONEY FROM THIS SETTLEMENT. TO RECEIVE YOUR PORTION OF THE SETTLEMENT AMOUNT TO WHICH YOU MAY BE ENTITLED, YOU MUST COMPLETE AND SUBMIT THE ENCLOSED “CLAIM FORM” TO THE CLAIMS ADMINISTRATOR, KOENIG V. PRIMANTI CORPORATION , C/O STRATEGIC CLAIMS SERVICES, 600 N. JACKSON STREET, SUITE 205, MEDIA, PA 19063 (THE “CLAIMS ADMINISTRATOR”) BY APRIL 16, 2018. PLEASE SEE THE ATTACHED FORM FOR ADDITIONAL INFORMATION.
2. Who is affected by the proposed Settlement?
The Lawsuit was filed as a class and collective action. In a class action, one or more people called “class representatives” (here, Plaintiff Chelsea Koenig) sue on behalf of people who allegedly have similar claims. This group is called a “class” and the persons included are called “class members.” One court resolves the issues for all of the class members, except for those who previously excluded themselves from the class. Here, the Court has certified the litigation as a class action for settlement purposes. The Plaintiff is serving as the Class Representative for a settlement class of Tipped Employees who worked at Defendants’ Primanti Bros. locations in Pennsylvania (“Rule 23 Class”) during the applicable Class Period, September 9, 2013, through December 31, 2016. In addition, the Settlement Class also includes individuals who file a Claim Form and thus opt-in to join the FLSA Collective Action (“FLSA Class”).
3. What is this case about?
As set forth in the Complaint, Plaintiff alleges that Defendants failed to satisfy the notice requirements of the tip credit provisions in federal and state law and caused deductions from tips in violation of federal and state law (and thus should have paid Tipped Employees the full minimum wage for every hour worked – e.g., $7.25 per hour in Pennsylvania). Defendants have responded to the Lawsuit by denying all of Plaintiff’s claims.
The parties in this Litigation disagree as to the probable outcome of the Lawsuit with respect to all issues if it were not settled. While the Plaintiff was prepared to proceed with litigating the case described above, the Plaintiff recognizes that litigating is a risky proposition and that she may not have prevailed on any or all of her claims. Plaintiff was also cognizant of the fact that the restaurant industry in general has experienced a downturn since her Complaint was filed. Defendants expressly deny any wrongdoing or legal liability.
This Settlement is the result of good-faith, arms-length negotiations between the Plaintiff and Defendants, through their respective attorneys. Both sides agree that, in light of the risks and expense associated with continued litigation, this Settlement is fair and appropriate under the circumstances, and in the best interests of the Settlement Class.
4. What are my options?
You have four options with regard to this Settlement. You can: 1) participate in the Settlement in full by filing the enclosed Claim Form; 2) object to the Settlement; 3) exclude yourself from the Settlement by mailing a request to opt out; or 4) do nothing. Details about each option and how each option will affect your rights under the law are explained below.
5. What are the terms of the proposed Settlement?
While they deny any liability whatsoever, under the Settlement Agreement, Defendants will pay a total of Two Million One Thousand Dollars ($2,100,000.00) to settle this Litigation (“Settlement Amount”). The Settlement Amount will be used to cover all payments to Participating Settlement Class Members, fees and expenses incurred by the Claims Administrator in administering this Settlement, attorneys’ fees and expenses of Class Counsel (as awarded by the Court), and any Service Payment to Plaintiff (as awarded by
2 Case 2:16-cv-01402-NBF Document 69-2 Filed 04/16/18 Page 11 of 69 the Court).
The Settlement Amount will be divided among the Settlement Class Members. The Claims Administrator will calculate Settlement Payments for Participating Settlement Class Members in four steps. The methodology is briefly described below and is set forth in detail in the Settlement Agreement.
First, the Claims Administrator will deduct from the Settlement Amount the following amounts as awarded or permitted by the Court: (i) Class Counsel’s attorneys’ fees in an amount not greater than $700,000, plus reasonable expenses, (ii) the Service Payment, if any, to the Plaintiff, and (iii) the fees and expenses of the Claims Administrator. The Claims Administrator currently estimates their fees and expenses to be approximately $30,000. After all applicable deductions, the resulting number will be referred to as the “Net Settlement Amount.” For each Participating Settlement Class Member, the Claims Administrator will multiply (i) the total hours worked by that individual and (ii) the difference between the full minimum wage for the state in which the individual worked and the hourly rate actually paid by Defendants to that Participating Settlement Class Member. This number will be referred to as the “Participating Individual Recovery Amount.”
For example, here is how a Participating Individual Recovery Amount would be calculated if they worked for Defendants in 2016:
In Pennsylvania (minimum wage was $7.25 per hour): Hours worked x tip credit claimed by Defendants ($4.42 per hour) = Participating Individual Recovery Amount.
In Ohio (minimum wage was $8.10 per hour): Hours worked x tip credit claimed by Defendants ($4.05 per hour) = Participating Individual Recovery Amount.
In West Virginia (minimum wage was $8.75 per hour): Hours worked x tip credit claimed by Defendants ($6.13 per hour) = Participating Individual Recovery Amount.
In Indiana (minimum wage was $7.25 per hour): Hours worked x tip credit claimed by Defendants ($5.12 per hour) = Participating Individual Recovery Amount.
In Maryland (minimum wage was $8.75 effective 7/1/2016): Hours worked x tip credit claimed by Defendants ($5.12 per hour) = Participating Individual Recovery Amount.
In Michigan (minimum wage was $8.50 per hour): Hours worked x tip credit claimed by Defendants ($5.27 per hour) = Participating Individual Recovery Amount.
Please note that the minimum wage and the tip credit Defendants could claim varies between states due to the differences in the state laws of each of those states.
The Participating Individual Recovery Amount for all Participating Settlement Class Members will then be added together by the Claims Administrator to determine the “Participating Settlement Class Members’ Total Recovery Amount.” Then, the Claims Administrator will divide the Net Settlement Amount by the Participating Settlement Class Members’ Total Recovery Amount. Finally, the resulting fractional amount will be multiplied by the Participating Individual Recovery Amount to determine that Participating Settlement Class Member’s Settlement Payment.
Thus, based on preliminary calculations, the Participating Settlement Class Members’ Total Recovery Amount is $10,773,096.24. Assuming the Court approves all fees and expenses, a Participating Settlement Class Member could expect to receive approximately 12.4% of their total wages owed during the Class Period. Hence if a Participating Settlement Class Member was owed $1,000.00 in back wages, they would receive $124.00 under this proposed Settlement.
An estimate of the amount you will receive, should the Settlement be approved and all Tipped Employees elect to participate in this Settlement, is included with this Notice Packet. Please note that this number may go up if less than all Tipped Employees file a Claim Form. Your estimated recovery is based on the number of hours recorded in Defendants’ timekeeping system. If you believe the number of hours recorded is in error, you may notify the Claims Administrator and dispute this amount. Please provide the Claims Administrator with any and all documents that support your claim. In addition, if your Participating Settlement Class Member’s Settlement Payment is subject to any mandatory deductions ( e.g., garnishments, tax liens, child support), those will also be included in this Notice Packet. If you believe the deduction is not accurate, you can contact the Claims Administrator at (866) 274-4004.
As part of the Settlement Amount, and in addition to any amount recoverable as a Participating
3 Case 2:16-cv-01402-NBF Document 69-2 Filed 04/16/18 Page 12 of 69
Settlement Class Member, Defendants have agreed not to oppose Plaintiff Koenig’s request for a Court award of up to Five Thousand Dollars ($5,000.00) in recognition of the risk Plaintiff took in bringing this Lawsuit and efforts she expended in prosecuting and resolving the Litigation by, among other things, responding to discovery and sitting for her deposition. The actual amount, if any, of the Service Payment Plaintiff will receive will be decided by the Court after it considers risks Plaintiff incurred and the benefits she helped obtain for Settlement Class Members.
6. Who represents the Parties?
Plaintiff and Settlement Class Members : Defendants
Gerald D. Wells, III Cheryl D. Orr CONNOLLY WELLS & GRAY, LLP DRINKER BIDDLE & REATH, LLP 2200 Renaissance Boulevard 50 Fremont Street Suite 275 20th Floor King of Prussia, PA 19406 San Francisco, CA 94105 Phone: (610) 822-3700 Phone: (415) 591-7500 Facsimile: (610) 822-3800 Facsimile: (415) 591-7510 www.cwg-law.com www.dbr.com
7. How will the attorneys for the class be paid?
Class Counsel, as defined in the Settlement Agreement, will request an award of fees that does not exceed one-third of the Settlement Amount (Seven Hundred Thousand Dollars ($700,000.00)), plus reimbursement of out-of-pocket expenses. Currently, Class Counsel estimates their expenses to be approximately Eighteen Thousand Five Hundred Dollars ($18,500) as these fees resulted primarily from costs associated with deposition transcripts, travel for depositions and mediations, and the Plaintiff’s portion of the mediators’ fees. Any attorneys’ fees and costs awarded in conjunction with the Settlement shall be paid from the Settlement Amount. Any fees and costs awarded by the Court in connection with this Settlement shall include and constitute satisfaction of the entire amount of attorneys’ fees and costs awarded by the Court, and shall be distributed by the Claims Administrator after the Court makes a determination regarding the amount of any fees and costs to be awarded. Settlement Class Counsel’s Motion for Attorneys’ Fees and Costs will be a public document filed with the Court. Once filed, Settlement Class Counsel’s Motion will be available on the following website: www.strategicclaims.net/primanti. The actual amount awarded will be determined by the Court to ensure that the amount of attorneys’ fees and costs are reasonable.
8. How do I participate in the Settlement and what happens if I do participate?
To receive a distribution from the Settlement Amount, you must complete, sign and return the enclosed Claim Form by mailing it to the Claims Administrator, postmarked no later than April 16, 2018. If the Court approves the Settlement, you will receive a distribution amount calculated as described in Section 5. The Claim Form is enclosed with this Notice and may also be obtained by contacting the Claims Administrator at the address or phone number that appears in Question 9.
Should you choose to return your Claim Form and participate in the Settlement, and if the Court grants final approval of the Settlement, you will be deemed by the Court to have fully and irrevocably released and waived any and all state and federal wage claims you may have against Defendants for known and unknown acts during period September 9, 2013 through December 31, 2016. You will be unable to bring any claim against Defendants that is included in the Release of Claims listed on the Claim Form. The full release is contained in the Claim Form.
If you submit a valid Claim Form, you will receive your Settlement check for your distribution from the Settlement Amount after final approval and after the Settlement becomes effective.
Please be advised that if you submit a valid Claim Form and elect not to endorse your Settlement Check, that portion of your settlement proceeds will either be reallocated to individuals who elected to cash their Settlement Checks or to a Court appointed cy pres recipient(s). Whether funds are reallocated to other Participating Settlement Class Members or distributed to a cy pres recipient(s) depends on the total amount of unclaimed funds. A full explanation of how the Settlement Amount will be distributed is contained in the Settlement Agreement.
4 Case 2:16-cv-01402-NBF Document 69-2 Filed 04/16/18 Page 13 of 69
9. How quickly must I act to participate in the Settlement?
To join the Lawsuit and receive a distribution from the Settlement Amount, you must properly complete and timely submit the enclosed Claim Form to the Claims Administrator. THE CLAIM FORM MUST BE POSTMARKED OR RECEIVED BY THE CLAIMS ADMINISTRATOR AT THE ADDRESS SET FORTH BELOW ON OR BEFORE APRIL 16, 2018: Koenig v. Primanti Corporation c/o Strategic Claims Services 600 N. Jackson Street, Suite 205 Media, PA 19063 Tel: (866) 274-4004 Fax: (610) 565-7985 [email protected]
10. What if I choose to object to the Settlement?
You can object to the terms of the Settlement before final approval. However, if the Court approves the settlement, you may still be bound by the terms of the settlement. You may both object to the settlement and participate in it, but you must timely file a Claim Form to receive your distribution from the Settlement Amount.
To object, you must submit a written objection, along with any supporting documents or materials by April 16, 2018 to the Claims Administrator. Any Settlement Class member who does not object in the manner described above shall be deemed to have waived any objections, and shall forever be foreclosed from objecting to the fairness or adequacy of the proposed Settlement, the payment of attorneys’ fees, litigation costs, the Service Payment to the Plaintiff, the claims process, and any and all other aspects of the Settlement.
IF YOU INTEND TO OBJECT TO THE SETTLEMENT, BUT WISH TO RECEIVE YOUR FULL SHARE OF THE SETTLEMENT, YOU MUST STILL TIMELY FILE YOUR CLAIM FORM AS STATED ABOVE. IF THE COURT APPROVES THE SETTLEMENT DESPITE YOUR OR ANY OTHER OBJECTION AND YOU HAVE NOT SUBMITTED A CLAIM FORM, YOU WILL NOT RECEIVE ANY PROCEEDS AND YOU WILL STILL BE BOUND BY ANY APPLICABLE RELEASE SET FORTH IN THE SETTLEMENT AGREEMENT.
11. What if I choose to exclude myself from or “opt out” of the Settlement?
FOR TIPPED EMPLOYEES IN PENNSYLVANIA: If you were a Tipped Employee who worked for Defendants in Pennsylvania, you may exclude yourself from the Settlement by submitting the Request for Exclusion (enclosed as the red document in Pennsylvania Tipped Employees’ Notice Packet). Pennsylvania Class Members may also exercise this option by sending a letter by mail to the Claims Administrator that states: “I request to be excluded from the settlement in Koenig v. Primanti Corporation, et al, Case No. 16-cv-1402 (W.D. Pa.). I affirm that I was employed by Defendants as a Tipped Employee on one or more days between September 9, 2013, and December 31, 2016.” Any Pennsylvania Class Member who wishes to opt-out must also include his or her full name, address, and telephone number. Class Members may not exclude themselves by telephone, fax, or email. If a fully completed and properly executed Request for Exclusion is not received by the Claims Administrator from a Settlement Class Member and postmarked on or before April 16, 2018, you will be considered part of the Settlement Class. If you submit a Request for Exclusion but also submit a valid Claim Form, you will receive a Cure letter seeking clarification. Should clarification not be received, the later-mailed document will govern, and if it cannot be ascertained which document was later mailed, the Claim Form will govern and the individual will be bound by the terms of the release set forth on Claim Form. If you timely complete and submit a Request for Exclusion, you will not participate in these proceedings, or receive any money from the Settlement. If you opt out, you will not be subject to the Release of Claims set forth in the Settlement Agreement and Claim Form. Please note that unless you submit a Request for Exclusion, the release of claims contained in the Settlement Agreement will have the same force and effect upon the Settlement Class as if the Settlement Agreement were executed by each member of the Settlement Class. FOR TIPPED EMPLOYEES OUTSIDE OF PENNSYLVANIA: If you were a Tipped Employee who worked
5 Case 2:16-cv-01402-NBF Document 69-2 Filed 04/16/18 Page 14 of 69 for Defendants outside of Pennsylvania, you will not be bound by this Settlement unless you submit a Claim Form.
12. What if I do nothing?
If you were a Tipped Employee in Pennsylvania and do nothing, you will not receive any distribution from the Settlement Amount and you will still be bound by the Release of Claims set forth in the Settlement Agreement. In short, you will be precluded from asserting any wage claims against Defendants under Pennsylvania state law based on the facts asserted in the Complaint.
If you were a Tipped Employee who worked in Ohio, West Virginia, Indiana, Maryland, and/or Michigan and do nothing, you will not receive any distribution from the Settlement Amount and you will NOT be bound by the Release of Claims set forth in the Settlement Agreement. In short, you will receive no money but can, if you so choose, sue Defendants on your own at your own expense for any applicable state law violations, if your statute of limitations has not expired.
All Tipped Employees are strongly encouraged to review this Notice and make a decision as to whether you wish to participate in the Settlement and receive a distribution from the Settlement Amount and to return the appropriate form within the allotted time period.
13. When and where will the Court decide whether to approve the settlement?
The Court will hold a Final Approval Hearing at 9:00 a.m. on April 23, 2018, at the United States District Court for the Western District of Pennsylvania, Joseph F. Weis, Jr. U.S. Courthouse, 700 Grant Street, Pittsburgh, PA 15219, in Courtroom 5B. At this hearing, the Court will consider whether the Settlement is fair, reasonable and adequate. If there are valid objections that comply with the requirements in Question 10 above, the Court also will consider them and will listen to people who have asked to speak at the hearing. The Court may also decide how much to pay to Class Counsel and Plaintiff. Please note that the Court may reschedule the Final Approval Hearing if it deems it necessary. Any such rescheduling will be posted on the settlement website at www.strategicclaims.net/primanti.
14. Do I have to attend the Final Approval Hearing?
No. Class Counsel will appear on behalf of the Settlement Class. But, you are welcome to come, or have your own lawyer appear at your own expense.
15. Who can answer questions regarding the Settlement?
This Notice only summarizes the Settlement terms for the Lawsuit. For more information about the settlement or if you have any questions regarding the settlement, you may contact your class counsel, Connolly Wells & Gray, LLP at:
Gerald D. Wells, III Connolly Wells & Gray, LLP 2200 Renaissance Boulevard, Suite 275 King of Prussia, PA 19406 Phone: (610) 822-3700 Email: [email protected]
Additional information about this proposed Settlement is available at www.strategicclaims.net/primanti a website maintained by the Claims Administrator.
Do not contact the Court directly about this matter. The Court cannot provide you with legal advice or any opinion regarding the Lawsuit or proposed settlement .
6 Case 2:16-cv-01402-NBF Document 69-2 Filed 04/16/18 Page 15 of 69
CLAIM FORM, CONSENT TO JOIN AND RELEASE
Koenig v. Primanti Corporation et al d/b/a Primanti Bros., et al. Civil Action No.: 16-1402
Koenig v. Primanti Corporation c/o Strategic Claims Services 600 N. Jackson Street, Suite 205 Media, PA 19063
Name/Address Changes (if any): Control No: 1 Name: ______Address: ______Phone: ( ______) ______- ______
COMPLETE AND SIGN THIS FORM ONLY IF YOU WISH TO PARTICIPATE IN THE SETTLEMENT AND RECEIVE YOUR SHARE OF THE SETTLEMENT FUND You must sign and return this Claim Form, POSTMARKED NO LATER THAN APRIL 16, 2018, to receive your share of the Settlement. Your share of the Settlement is based on the number of hours that you worked as a bartender, server, and/or food runner (collectively, a “Tipped Employee”) for Primanti Corporation et al d/b/a Primanti Bros., (collectively “Defendants”) during the Class Period. The Class Period extends from September 9, 2013 to December 31, 2016. Defendants’ records show that, within that period, you worked as a Tipped Employee during the following time period: to
Based on time records, Defendants calculate that you worked hours during the Class Period. IF YOU AGREE WITH THE NUMBER OF HOURS SET FORTH ABOVE AND YOU WISH TO MAKE A CLAIM, SIGN WHERE DESIGNATED IN THE MIDDLE OF PAGE 2 AND RETURN THIS FORM TO THE CLAIMS ADMINISTRATOR. IF YOU WISH TO MAKE A CLAIM, BUT YOU DO NOT AGREE WITH THE NUMBER OF HOURS SET FORTH ABOVE, THEN PLEASE COMPLETE THE DISPUTE FORM ON PAGE 2 AND RETURN TO THE CLAIMS ADMINISTRATOR.
RELEASE: By participating in this Settlement, you shall be deemed to fully, forever, irrevocably and unconditionally release, remise, and discharge Defendants, and each of their past, present, and future members, parents, affiliates, subsidiaries, divisions, predecessors, franchisors, successors, partners, joint venturers, affiliated organizations, shareholders, insurers, reinsurers and assigns, and each of Defendants’ past, present and future officers, directors, trustees, agents, employees, attorneys, contractors, representatives, divisions, units, branches and any other persons or entities acting on Defendants’ behalf (collectively referred to as the “Released Persons”), from any and all state wage-related claims of any kind, including but not limited to any claims pursuant to the PMWA and PWPCL that you have, had, might have or might have had against any of the Released Person based on any act or omission that occurred during the time period September 9, 2013 through December 31, 2016, in any way related to any of the facts or claims that were alleged or that could have been alleged in the Litigation relating to Defendants’ Restaurants or by reason of the negotiations leading to this Settlement, even if presently unknown or un-asserted. Case 2:16-cv-01402-NBF Document 69-2 Filed 04/16/18 Page 16 of 69
In addition, you shall be deemed to forever and fully release and discharge Defendants, and release and hold harmless the Released Persons, from any and all federal wage-related claims of any kind, including but not limited to any claims pursuant to the Fair Labor Standards Act, 29 U.S.C. § 201, et seq., that you have, had, might have or might have had against any of the Released Persons based on any act or omission that occurred during the time period September 9, 2013 through December 31, 2016 that in any way related to any of the facts or claims that were alleged or that could have been alleged in the Litigation relating to Defendants’ Restaurants or by reason of the negotiations leading to this Settlement, even if presently unknown or un-asserted. You are encouraged to review the entire Settlement Agreement, available at www.strategicclaims.net/pr imanti , in order to determine how the proposed Settlement Agreement affects you.
I, [______], certify by signing below that I wish to join the Lawsuit listed in the Notice and to participate in the proposed Settlement in this matter, including the portion of the Settlement relating to claims asserted under the FLSA. I hereby consent to become a party plaintiff in the Lawsuit, and I hereby authorize Class Counsel to file this Claim Form, Consent to Join and Release with the Court. I also certify that I agree to be bound by the Release contained in the Settlement Agreement and reproduced above, and that I agree to be bound by the Claims Administrator’s determination of my hours worked.
______Date Signature
DISPUTE FORM
IF YOU AGREED WITH THE NUMBER OF HOURS SET FORTH ON PAGE 1 THEN DO NOT COMPLETE THIS SECTION. IF YOU DISPUTE DEFENDANTS’ RECORDS, READ AND COMPLETE THIS SECTION
Between September 9, 2013, and December 31, 2016, I believe I worked as a Tipped Employee the following hours:
Dates: ______, ______to ______, ______month, day year month, day year # of hours
Dates: ______, ______to ______, ______month, day year month, day year # of hours
Dates: ______, ______to ______, ______month, day year month, day year # of hours
NOTE: In order to dispute the number of hours listed in this Claim Form, you must also submit a written, signed declaration attesting to the number of hours you worked. In addition, you can submit copies of your pay stubs and any other evidence you have supporting your assertion regarding the number of hours worked with this form. You hereby authorize the Claims Administrator to review both your records and Defendants’ records to determine the number of hours for which you qualify for payment. The determination by the Claims Administrator will be final, so you will not have another opportunity to dispute the number of hours. By participating in this Settlement, you agree to this dispute resolution procedure and agree that the Claims Administrator’s decision is final and binding, and you agree not to contest it.
2 Case 2:16-cv-01402-NBF Document 69-2 Filed 04/16/18 Page 17 of 69
UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA
CHELSEA KOENIG, on behalf of herself and all others similarly situated, Civil Action No. 16-1402 Plaintiff, Hon. Nora Barry Fischer
v.
PRIMANTI CORPORATION D/B/A PRIMANTI BROS.; DAVID HEAD; ANDREW TAUB; DEMETRIOS PATRINOS; JAMES CHU; NICHOLAS NICHOLAS; and DOE DEFENDANTS 1-10,
Defendants.
REQUEST FOR EXCLUSION FROM A CLASS ACTION SETTLEMENT
By completing and returning this form, I affirm that I do not want to join the class action lawsuit referenced above. Rather, I request to be excluded from the settlement in Koenig v.
Primanti Corporation, et al. , Case No. 2:16-CV-01402 (W.D. Pa.). I affirm that I was employed by Defendants as a Tipped Employee on one or more days between September 9, 2013, and
December 31, 2016. I understand that this class action lawsuit seeks unpaid minimum wages that may be owed to me under applicable Pennsylvania law. I understand by asking to be excluded from this class action settlement, I will not receive any benefit from this settlement . Finally, I understand that in order for this form to be considered valid, it must be submitted to the Claims Administrator on or before April 16, 2018 at Koenig v. Primanti , c/o
Strategic Claims Services, 600 N. Jackson Street, Suite 205, Media, PA 19063.
Date:______Printed Name
______Signature Case 2:16-cv-01402-NBF Document 69-2 Filed 04/16/18 Page 18 of 69 Case 2:16-cv-01402-NBF Document 69-2 Filed 04/16/18 Page 19 of 69 Case 2:16-cv-01402-NBF Document 69-2 Filed 04/16/18 Page 20 of 69 Case 2:16-cv-01402-NBF Document 69-2 Filed 04/16/18 Page 21 of 69 Case 2:16-cv-01402-NBF Document 69-2 Filed 04/16/18 Page 22 of 69 Case 2:16-cv-01402-NBF Document 69-2 Filed 04/16/18 Page 23 of 69 Case 2:16-cv-01402-NBF Document 69-2 Filed 04/16/18 Page 24 of 69 Case 2:16-cv-01402-NBF Document 69-2 Filed 04/16/18 Page 25 of 69 Case 2:16-cv-01402-NBF Document 69-2 Filed 04/16/18 Page 26 of 69 Case 2:16-cv-01402-NBF Document 69-2 Filed 04/16/18 Page 27 of 69 Case 2:16-cv-01402-NBF Document 69-2 Filed 04/16/18 Page 28 of 69 Case 2:16-cv-01402-NBF Document 69-2 Filed 04/16/18 Page 29 of 69 Case 2:16-cv-01402-NBF Document 69-2 Filed 04/16/18 Page 30 of 69 Case 2:16-cv-01402-NBF Document 69-2 Filed 04/16/18 Page 31 of 69 Case 2:16-cv-01402-NBF Document 69-2 Filed 04/16/18 Page 32 of 69 Case 2:16-cv-01402-NBF Document 69-2 Filed 04/16/18 Page 33 of 69 Case 2:16-cv-01402-NBF Document 69-2 Filed 04/16/18 Page 34 of 69 Case 2:16-cv-01402-NBF Document 69-2 Filed 04/16/18 Page 35 of 69 Case 2:16-cv-01402-NBF Document 69-2 Filed 04/16/18 Page 36 of 69 Case 2:16-cv-01402-NBF Document 69-2 Filed 04/16/18 Page 37 of 69 Case 2:16-cv-01402-NBF Document 69-2 Filed 04/16/18 Page 38 of 69 Case 2:16-cv-01402-NBF Document 69-2 Filed 04/16/18 Page 39 of 69 Case 2:16-cv-01402-NBF Document 69-2 Filed 04/16/18 Page 40 of 69 Case 2:16-cv-01402-NBF Document 69-2 Filed 04/16/18 Page 41 of 69 Case 2:16-cv-01402-NBF Document 69-2 Filed 04/16/18 Page 42 of 69 Case 2:16-cv-01402-NBF Document 69-2 Filed 04/16/18 Page 43 of 69 Case 2:16-cv-01402-NBF Document 69-2 Filed 04/16/18 Page 44 of 69 Case 2:16-cv-01402-NBF Document 69-2 Filed 04/16/18 Page 45 of 69 Case 2:16-cv-01402-NBF Document 69-2 Filed 04/16/18 Page 46 of 69 Case 2:16-cv-01402-NBF Document 69-2 Filed 04/16/18 Page 47 of 69 Case 2:16-cv-01402-NBF Document 69-2 Filed 04/16/18 Page 48 of 69 Case 2:16-cv-01402-NBF Document 69-2 Filed 04/16/18 Page 49 of 69 Case 2:16-cv-01402-NBF Document 69-2 Filed 04/16/18 Page 50 of 69 Case 2:16-cv-01402-NBF Document 69-2 Filed 04/16/18 Page 51 of 69 Case 2:16-cv-01402-NBF Document 69-2 Filed 04/16/18 Page 52 of 69 Case 2:16-cv-01402-NBF Document 69-2 Filed 04/16/18 Page 53 of 69 Case 2:16-cv-01402-NBF Document 69-2 Filed 04/16/18 Page 54 of 69 Case 2:16-cv-01402-NBF Document 69-2 Filed 04/16/18 Page 55 of 69 Case 2:16-cv-01402-NBF Document 69-2 Filed 04/16/18 Page 56 of 69 Case 2:16-cv-01402-NBF Document 69-2 Filed 04/16/18 Page 57 of 69 Case 2:16-cv-01402-NBF Document 69-2 Filed 04/16/18 Page 58 of 69 Case 2:16-cv-01402-NBF Document 69-2 Filed 04/16/18 Page 59 of 69 Case 2:16-cv-01402-NBF Document 69-2 Filed 04/16/18 Page 60 of 69 Case 2:16-cv-01402-NBF Document 69-2 Filed 04/16/18 Page 61 of 69 Case 2:16-cv-01402-NBF Document 69-2 Filed 04/16/18 Page 62 of 69 Case 2:16-cv-01402-NBF Document 69-2 Filed 04/16/18 Page 63 of 69 Case 2:16-cv-01402-NBF Document 69-2 Filed 04/16/18 Page 64 of 69 Case 2:16-cv-01402-NBF Document 69-2 Filed 04/16/18 Page 65 of 69 Case 2:16-cv-01402-NBF Document 69-2 Filed 04/16/18 Page 66 of 69 Case 2:16-cv-01402-NBF Document 69-2 Filed 04/16/18 Page 67 of 69 Case 2:16-cv-01402-NBF Document 69-2 Filed 04/16/18 Page 68 of 69 Case 2:16-cv-01402-NBF Document 69-2 Filed 04/16/18 Page 69 of 69 Case 2:16-cv-01402-NBF Document 69-3 Filed 04/16/18 Page 1 of 6
EXHIBIT 3 Case 2:16-cv-01402-NBF Document 69-3 Filed 04/16/18 Page 2 of 6
UNITED STATES DISTRICT COURT WESTERN DISTRICT OF PENNSYLVANIA
CHELSEA KOENIG, on behalf of herself and all others similarly situated, CIVIL ACTION NO.: 2:16-CV-1402 Hon. Nora Barry Fischer Plaintiff,
v.
PRIMANTI CORPORATION et al.,
Defendant(s).
DECLARATION OF CHELSEA KOENIG IN SUPPORT OF MOTION FOR FINAL APPROVAL OF SETTLEMENT
I, CHELSEA KOENIG, declare as follows:
1. I am an individual now residing in Arizona as a result of relocating for a new
employment position, and I am the named plaintiff and class representative in the above-
captioned class action. I submit this declaration in support of Plaintiff’s Motion for Final
Approval of Settlement. I have personal knowledge of the matters set forth herein and would
testify thereto if called as a witness.
2. I was employed as a “bartender” for Primanti Brothers (“Primanti Bros.”) at their Mt. Lebanon location in the Commonwealth of Pennsylvania.
3. As a named plaintiff in this lawsuit, I brought claims on behalf of myself and as a representative of a class of similarly situated individuals against Defendant seeking the recovery of the full minimum-wage amount due because of Defendant’s failure to comply with the tip credit notification requirements set forth under
Pennsylvania and federal law. I understand the basic theories behind these allegations Case 2:16-cv-01402-NBF Document 69-3 Filed 04/16/18 Page 3 of 6
(e.g., Defendant failing to inform me of the amount of “tip credit” claimed and their
failure to ensure my tips always met or exceeded the minimum wage).
4. I have a general understanding of how minimum wage compensation is
calculated and I have a basic understanding of the reasonable range of value for my
claim and the class in general.
5. I understand that there is a proposed settlement that potentially resolves all
claims of individuals who worked as servers, bartenders, and/or food runners for Defendant
in Pennsylvania, Indiana, Maryland, Michigan, Ohio and West Virginia during the Class
Period who were not made aware of the tip credit requirements by Defendant.
6. It is my understanding that since leaving Defendant’s employ, Primanti Bros.
began informing Tipped Employees of all of the tip credit provisions in writing sometime
around December 2016, effectively ending the principle claim asserted in this matter.
7. I have read, considered, and signed the Settlement Agreement between
Defendant and myself, and have discussed the terms and conditions of the Settlement
Agreement with my attorneys.
8. I understand that the Settlement Agreement resolves all claims against
Defendant that were alleged in the Complaint.
9. Based on the foregoing, as well as the number of hours I worked, my familiarity with issues in dispute and my general appreciation of the risks of litigation, and after conferring with my attorneys on several occasions, I believe that the settlement is fair, reasonable and adequate and in the best interests of the class.
10. I further support approval of this Settlement because I, and the other class members, will be able to realize the benefits of this settlement in the very near future. In
2 Case 2:16-cv-01402-NBF Document 69-3 Filed 04/16/18 Page 4 of 6
contrast, had this case not settled, I understand that it may have taken many more months, if not years, before I and other class members received a monetary benefit from this lawsuit, if at all.
11. Finally, while I am ultimately confident in the merits of my case, I understand that there are no guaranteed results in litigation. As such, I believe the benefits of this
Settlement outweigh the risks of continuing to litigate this matter.
12. I have assisted my counsel in the prosecution of this matter by being available and answering any questions they have relevant to my employment. Prior to the filing of this lawsuit, I had multiple telephone conferences with my attorneys and reviewed and approved the filing of the initial complaint.
13. During these meetings, I provided my attorneys with an understanding of my day-to-day duties and responsibilities while employed at Primanti Bros., as well as an understanding of the employment practices and compensation scheme of Defendant.
14. In addition, I also assisted counsel in reviewing certain documents Defendant
produced during this litigation. Through my assistance, I believe that my attorneys were better
able to understand how the documents Defendant provided were distributed to workers during
their employment with Primanti Bros.
15. I further responded to Defendant’s discovery requests with the assistance of my
counsel, including providing documents in response to Request for Production of Documents
and answers to Interrogatories.
16. I also prepared for and sat for my deposition. In scheduling and preparing for the deposition, I had multiple telephone conversations with my attorneys as well as meeting with my attorneys in person before the start of the deposition. The deposition itself lasted
3 Case 2:16-cv-01402-NBF Document 69-3 Filed 04/16/18 Page 5 of 6
several hours and required me to take off from work.
17. Finally, I made myself available by phone for two mediations in this matter. In preparing for these mediations, I had several telephone conversations with counsel to discuss settlement strategy. Each of the mediations lasted several hours and required me to make myself available on these days.
18. In sum, I have been actively involved in this case from the beginning to the end, including searching for documents, talking with my attorneys, reviewing documents my attorneys sent to me, reviewing documents produced in the course of this lawsuit, producing documents relevant to the litigation, answering Interrogatories posed to me by the Defendant, monitoring the course of this lawsuit, sitting for my deposition, being involved in the mediation process, and reviewing and approving settlement documents drafted by the Parties.
19. In total, I estimate that I spent approximately 25 hours doing the foregoing tasks and assisting my counsel in the prosecution of this case. I have received no compensation for the significant time spent fulfilling these responsibilities.
20. I support class counsel's fee request because this case was always litigated on a
contingent fee basis. I know that Defendant has aggressively challenged the claims asserted
in this case. I know that class counsel had to invest their own funds in prosecuting this case
because my attorneys advanced all the costs.
21. I also support class counsel’s fee request because, like me, they have conferred
a substantial benefit on the class. In addition to the monetary compensation, through this case,
my attorneys have educated my fellow co-workers about their legal rights.
4 Case 2:16-cv-01402-NBF Document 69-3 Filed 04/16/18 Page 6 of 6
5