United States District Court for the Western District of Pennsylvania
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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.