Rubio’s Restaurants finds another 140 cheated employees but doesn’t want to increase its settlement
Thursday, December 3, 2009
After reaching a $7.5 million settlement in a class action wage-and-hour suit involving 529 current and former employees — and after making the first payment of $2.5 million — officials at Southern California-based Rubio’s Restaurants suddenly discovered another 140 employees who had been wronged and qualified as plaintiffs.
Plaintiffs’ lawyer Matthew Righetti, experienced in litigating class action cases, told the Daily Journal he’d never seen a defendant mistakenly overlook 140 people. (Rubio’s attorneys have characterized the oversight as an innocent mistake.)
The company tried to add the additional employees to the negoatiated settlement, thus lowering the amount each of the wronged employees would receive. An Orange County Superior Court judge will now decide whether that’s fair, after the 4th District Court of Appeal determined the previous judge in the case reversed his decision to add the new plaintiffs.
Of course, the original $7.5 million figure was arrived at with the understanding that there were 529 plaintiffs involved. Righetti told the Daily Journal this type of after-the-fact add-on is common.
Invariably after a settlement, the defendant finds a handful of people who should have been included in the class or a few hours of overtime that are due.
“You are completely at the mercy of the defendant in giving you accurate information. You rely on that information when you go into settlement,” he said….
Righetti said he intends to either litigate the case to trial or reach a separate settlement for the 140, dismissing the notion that more people should share the same pot of money.
“It just seemed like an incredibly presumptuous overreaching to suggest that people should just be folded in on the backs of the people [in the existing class] and reduce the value,” he said.
When first presented with the additional plaintiffs, Orange County Superior Court Judge Thierry Patrick Colow ruled the 140 new plaintiffs would be added to the existing settlement. Righetti then asked Colow to reconsider the decision or remove himself from the case — and Colow did both last October, first separating the new plaintiffs from the settlement and then recusing himself “in the interests of justice.”
Rubio’s attorneys argued the original decision should still be in effect as a result, but the 4th District Court of Appeal determined Colow’s last ruling stands, and sent the case to Orange County Superior Coury Judge Gail Andler.
Last month Rubio’s announced third quarter earnings of $48.4 million, which apparently isn’t enough to keep them from trying to shortchange their employees. The company’s 2008 annual report said, “We want to thank each and every one of our dedicated team members — and particularly those on the front line — who have created a guest experience that is second to none in our industry, and who made 2008 a successful year for Rubio’s during the most challenging of times.” After the settlement of this lawsuit that thanks will now include proper payment of overtime.
Rubio’s is facing a potential class action suit alleging shift leaders worked off the clock and missed meal and rest breaks. Rubio’s annual report says that case is still in the pre-class certification discovery stage, and the company is denying the allegation. The company is also facing a class action lawsuit stemming from an attempted purchase of all of the company’s outstanding stock.