Do restaurant managers deserve overtime pay? In California, managers at Denny's think so, and believe they've been deprived. In California, Denny's restaurants has been accused and sued for wrongfully withholding millions of dollars of overtime wages from its managers and general managers.
Today, June 22, a state court ruled that the case may proceed as a class action. The ruling was made by judge Bruce Mitchell in the Los Angeles Superior Court. The suit will proceed on behalf of more than 1,500 managers and general managers at the 214 company-owned Denny's restaurants in California since September 1994.
"This is one of the largest wage and hour class action cases in the historyof the state," said William Hirsch of Lieff, Cabraser, Heimann & Bernstein, one of the two firms representing the plaintiffs. "Each of our clients has lost thousands of dollars for every year they worked at Denny's, and we intend to ensure that Denny's pays them what theyare owed, and to force Denny's to comply with the California law in thefuture. Anything else gives Denny's an unfair business advantage, and is wrong and unfair."
The complaint originated in September 1997 when three Denny's general managers claimed the company refused to pay them and other general managers and managers overtime wages in accordance with California Wage Order 5-89. Lawyers claim that according to the law, Denny's must pay managers overtime wages "if the managers work more than 40 hours a week and spend more than half their time doing the same work as hourly employees." The manager-plaintiffs claim a lack of true management authority, routine 60-hour work weeks, and regular chores along the lines of dish-washing and floor-sweeping.
Damages are not specified in the suit, but Pearson said today, "The law requires restaurant employees who are not exempt from state law overtime requirements to receive one and one half times their regular wage for each hour worked in excess of 40 hours per work week...the numbers can add up very quickly," according to Pearson.
Now that the suit is formally approved, the plaintiffs will notify all current and former general managers and managers working at the company-owned sites at any time since September 1994 and give them the option to be included in the class action.
The lawyers add: "In addition to the California Labor Code claims which will proceed as a certified class action, the named plaintiffs will also pursue claims under California Business and Professions Code section 17200 et seq., on a collective basis, seeking disgorgement of profits andinjunctive relief to ensure that Denny's complies with California law in thefuture."
Legal facts from the plaintiffs' law firm follow:
Plaintiffs: Arif U. Khan, Rosa Wright and Darami Dam, suing on behalf of themselves, and all other persons similarly situated. The three named plaintiffs were employed at various Denny's restaurants in California as managers and general managers.
Defendants: Denny's Holdings, Inc., a New York corporation with its headquarters in Spartanburg, SC, Denny's, Inc., a California corporation with its headquarters in Los Angeles.
Court: The lawsuit was filed Sept. 2, 1997 in the Superior Court of the State of California, for the County of Los Angeles, Case No. BC 177254. The case is currently assigned to the Honorable Bruce Mitchell.
Claims alleged: Violations of the California Labor Code section 1198 for Failure to Pay Overtime Wages, which have been certified for class action treatment. In addition, Violations of California Business & Professions Code section 17200 et seq. for Unfair Competition, to be pursued on a collective basis by the named plaintiffs.
Key allegations: Denny's, Inc. and Denny's Holdings, Inc. wrongfully withheld overtime wages from more than 1,500 managers and general managers employed at the company's California restaurants since 1993.
Relief sought: Payment of overtime wages to past and present general managers and managers of Denny's company owned restaurants in California; and injunctive relief under California Business and Professions Code section 17200 et seq., requiring Denny's to halt its practice of withholding overtime wages from general managers and managers, and restitution of withheld wages.
Plaintiffs' attorneys: Lieff, Cabraser, Heimann & Bernstein of San Francisco, CA, and Wasserman, Comden & Casselman, a Los Angeles, CA, law firm.