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Shake Shack Settles Lawsuit Over Manager Overtime Pay, Company Says

By Ben Fractenberg | March 29, 2016 6:33pm
 Nine managers joined a class action lawsuit against Madison Shake Shack, saying they were denied overtime pay.
Nine managers joined a class action lawsuit against Madison Shake Shack, saying they were denied overtime pay.
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Shake Shack

MIDTOWN — Shake Shack settled a class-action lawsuit brought by nine former and current managers against the Manhattan-based chain, claiming they were denied thousands of dollars in overtime pay, according to court papers filed on March 21 in New York State Supreme Court.

“We believe the allegation to be untrue and we have taken steps over the years to ensure that our managers are classified appropriately," the company said in a statement. 

"Yet, we made a strategic decision to settle the allegation, despite our position on it, in order to keep our focus on building our business, growing our terrific team and offering the best experience possible to our guests. We expect a final resolution within the next six months.”

The managers claimed Shake Shack should have known they deserved overtime. 

“Shake Shack was aware that Plaintiffs, and the Class Members worked more than 40 hours per workweek, yet Shake Shack failed to pay them any overtime compensation for any of hours worked over 40 in a workweek,” the lawsuit read.

The managers — including one who worked at the Fulton Street location in Brooklyn for more than a year — filed the suit on behalf of similar workers at burger joint locations in New York State, Connecticut, Illinois, Maryland, Massachusetts, New Jersey,  Pennsylvania and Washington D.C.

The New York managers are seeking $50 each for every week Shake Shack failed to pay them overtime or a total of $2,500 each.

Shake Shack founder Danny Meyer received media attention last fall after announcing he would eliminate tipping at his restaurants, including the Modern and Gramercy Tavern, to promote fair labor practices in the service industry.

President Barack Obama proposed in 2015 raising the salary threshold for managers to be eligible for overtime pay. The  new rules are expected to be finalized in July and take effect by the fall. 

Fast food workers are protected under the national Fair Labor Standards Act, which guarantees overtime for workers who meet certain salary and job title requirements. 

The lawyer for the managers did not return an immediate request for comment.

A spokesman for Shake Shack said he was unaware how much the settlement was for.