TGI Friday's Must Rework $19.1M Wage Deal, Judge Says

A New York federal judge on Thursday rejected a proposed $19.1 million settlement between a putative class of 28,800 TGI Friday's tipped workers and the restaurant chain, saying it contains confidentiality and release provisions that could not “pass muster.”

U.S. District Judge Analisa Torres denied a request to approve the proposed settlement that was drafted to resolve a nationwide putative class action brought by more than a dozen lead plaintiffs, alleging violations of the Fair Labor Standards Act and claims brought under the labor or unfair competition laws of nine states. Judge Torres wrote that no justifications were offered for certain confidentiality provisions in the proposed agreement, such as the requirement that even after a motion for preliminary approval had been filed counsel for any party can only respond to media inquiries by confirming the accurate terms of the deal. 

The judge also highlighted another section of the proposed deal that would require the plaintiffs to waive claims that don’t have a relationship to wage-and-hour issues, such as claims for unlawful discrimination, harassment and retaliation.

“Not only do courts ‘typically reject such broad releases’ in proposed settlement agreements, but the court has already recently rejected similarly broad releases in this very litigation,” the judge wrote. “The court sees no reason to deviate from the principles of its earlier decision.”

The judge told the parties to revise the deal by Sept. 28.

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