Possible Settlement in Unpaid Overtime Case

In November 2014, employees of Alice’s Tea Cup LLC, a Manhattan café chain alleged that during their employment, they were not paid overtime for days when they worked more than 10 hours. Alice’s Tea Cup has three locations in New York City.

The Fair Labor Standards ACT (FLSA) is federal legislation that allows individuals to be entitled to minimum wage.  In addition, a person is entitled to overtime pay that is not less than time and a half of their regular rate of pay for any work over 40 hours per week.

In May 2015, the owners of the Café, Zhariff Melgoza and Haley Fox filed discovery requests demanding that the workers produce documents to verify their current immigration status and other supporting documentation.

In July, Judge James Francis granted the plaintiffs protective order from the Café’s request for discovery.  He said that their immigration status or financial records were irrelevant to their and New York labor law claims (NYLL).  Also, the risk of injury to the plaintiffs outweighed the need for disclosure “because the danger of intimidation and undermining the purposes of the FLSA.”

This case was initially scheduled to go to trial on December 5th in New York federal court.  However, after months of negotiation and mediation over the unpaid overtime, attorneys for Alice’s Tea Cup and the employees suing, asked Judge Francis to approve a $200,000 settlement.  Both sides believe the deal is reasonable and fair.

According to Law360, the settlement provides that within eight days of the courts approval, the café will pay $75,000 to eight plaintiffs for various amounts.  Four of those plaintiffs will receive thirty-five monthly installments of the remaining $125,000 over the next three years.  Three of the plaintiffs instructed counsel to dismiss their claims with prejudice, which resolves claims that Alice’s Tea Cup did not pay proper overtime wages.

The FLSA requires that an employer pay overtime wages. If you believe that you have not been properly compensated as an employee, contact an experienced New York Employment Attorney. Contact Steven Mitchell Sack at (917) 371-8000.

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