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KFC Settles with 13,000 Plaintiffs in Wage and Hour Dispute

Counsel Financial

Plaintiffs, current and former KFC employees, allege that since October 2, 2005, KFC failed to adequately compensate them for missed meal and rest periods, as well as off-the-clock work. As a result, Plaintiffs contend they were not paid appropriate overtime and minimum wages.

KFC has a uniform corporate policy that provides no employee may take a break without permission from their manager. However, Plaintiffs allege the managers often deny break periods because KFC puts pressure on the managers to maintain speedy and uniform service, especially during peak business hours.

In addition, KFC requires its employees to clock out simultaneously with the restaurant closing for the night. Plaintiffs contend that even though they clock out, they still are required to finish significant, uncompensated work prior to leaving.

Plaintiffs’ expert opines that in the data sample of KFC restaurants he reviewed, 99.16% of employees experienced missed, shortened or late meal periods, 87.45% of employees experienced missed, shortened or late rest breaks and 95.95% of employees experienced some combination of both.

Plaintiffs claim that class certification is appropriate as a result of KFC’s centralized management structure, identical time keeping systems and uniform policies imposed on all KFC franchises. Defendants, however, argue that KFC managers made breaks available to employees and forbade off-the-clock work. Further, Defendants contend that individual factual questions existed concerning missed break periods, and therefore, Plaintiffs’ motion for class certification should be denied.

The Court found in favor of Plaintiffs' motion for class certification, and thereafter, both sides stipulated to a settlement of all claims.
VERDICT: $3,550,000
COURT: United States District Court for the Southern District of California

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