Defending a Restaurant Owner in Multi-Plaintiff Federal Wage and Hour Litigation
For restaurant owners and small business operators, Wage and Hour litigation is one of the most significant financial and operational risks. When multiple former employees join together to file a lawsuit, the potential exposure to statutory damages and legal fees can threaten the very survival of the business.
Song Law Firm recently represented a restaurant owner in the U.S. District Court for the District of New Jersey who was sued by several former employees alleging violations of the Fair Labor Standards Act (FLSA) and New Jersey Wage and Hour Laws. Through aggressive litigation management and expert negotiation, we achieved a global settlement that protected our client’s business interests.
The Challenge: Multi-Plaintiff Exposure and Statutory Penalties
The case involved claims for unpaid regular wages and overtime compensation. Because the lawsuit was filed by multiple plaintiffs, the potential financial liability was significantly amplified. Under the New Jersey Wage Theft Act (WTA), employers found liable for “knowing” violations can be ordered to pay liquidated damages of up to 200% (effectively triple damages) in addition to the unpaid wages and the plaintiffs’ attorneys’ fees.
Our client denied all liability, disputing the accuracy of the hours claimed and the nature of the compensation provided. However, as the matter proceeded as active federal litigation, the risk of a prolonged trial and escalating costs became a primary concern.
Song Law Firm’s Strategic Solution: Mitigation and Financial Engineering
Song Law Firm’s labor and employment team implemented a multi-layered strategy to resolve the dispute efficiently:
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Strategic Negotiation and Risk Control: We leveraged factual inconsistencies in the plaintiffs’ claims to bring them to the negotiating table early. This allowed our client to avoid years of discovery and the high costs associated with federal court proceedings.
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Staged Payment Structure: Recognizing the importance of cash flow for a restaurant, we negotiated a staged payment plan. This allowed the client to satisfy the settlement over time, ensuring that business operations continued without financial disruption.
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Tax-Efficient Allocation: We carefully structured the settlement by precisely allocating payments between wages (reported on Form W-2) and liquidated damages/non-wage components (reported on Form 1099). This not only ensured compliance with IRS and state regulations but also minimized the client’s unnecessary tax exposure and payroll tax burdens.
The Result: Finality and Business Continuity
We successfully negotiated a confidential global settlement resolving all claims for all plaintiffs without any admission of wrongdoing or liability. By choosing a pragmatic resolution over an uncertain and expensive trial, our client significantly reduced their total litigation costs and brought a definitive end to a high-exposure case.
This outcome highlights Song Law Firm’s ability to manage complex, multi-plaintiff employment litigation—minimizing financial risk while achieving practical, cost-effective results that allow business owners to focus on what they do best: running their business.
Protecting Your Business Interests
Employment law disputes require more than just a defense; they require a strategy that considers your bottom line. If your business is facing a wage and hour claim or an audit, contact Song Law Firm’s experts today.
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KakaoTalk Channel: Song Law Firm
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Phone: 201-461-0031
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Email: mail@songlawfirm.com
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Website: www.songlawfirm.com
Disclaimer: The results described above depend upon the specific facts and legal circumstances of each individual case. Prior results do not guarantee a similar outcome in future matters. This content is provided for informational purposes only and does not constitute legal advice.
No aspect of this advertisement has been approved by the Supreme Court of New Jersey. Results may vary depending on your particular facts and legal circumstances.
