Wingstop Franchise Pays $1.3M in PAGA Settlement
Table of Contents
Case Background
A high-stakes labor dispute in San Bernardino County, California, concluded when the parties reached a substantial settlement, avoiding a full jury trial. Plaintiff Kayla Vitela had brought the action, not just on her own behalf, but as a representative for the entire State of California, acting as an aggrieved employee under the Private Attorneys General Act (PAGA). This mechanism allowed her to pursue civil penalties against her former employers Sizzling Platter, LLC, Sizzling Wings, LLC dba Wingstop, and SPLAT HoldCo, LLC for alleged Labor Code violations affecting a large group of current and former employees.
Cause
The central cause of the complaint revolved around alleged systematic failures by the employer to comply with California’s stringent wage and hour laws. Vitela accused the companies of a multitude of violations that negatively impacted herself and her co-workers. She claimed that the companies consistently violated rules concerning payment, breaks, and accurate record-keeping. The PAGA statute, under which she sued, allowed the Plaintiff to step into the shoes of the state Labor and Workforce Development Agency (LWDA) to seek penalties that otherwise would have been pursued by the government. This structure dramatically raised the stakes of the litigation, as penalties often accrued daily for each violation across the entire class of aggrieved employees.
Injury
Vitela asserted that the injuries were financial and procedural, affecting a substantial number of workers across the companies’ operations. The alleged injuries included the loss of wages and tips due to improper calculations, failure to receive mandatory paid rest periods and meal breaks, and the inability to recoup full business expenses. These procedural injuries meant that employees had not received full compensation owed to them under state law. Because the claims were filed under PAGA, the injury was defined by the statutory violations of the Labor Code, establishing a basis for collecting civil penalties against the Defendants.
Damages Sought
The primary relief sought in the complaint was the imposition of civil penalties as outlined in the Private Attorneys General Act, with a portion of those penalties going to the aggrieved employees and the majority to the State of California’s LWDA. Additionally, Vitela had requested recovery for all unpaid wages, interest, and restitution for the employees, alongside reimbursement for the significant legal fees and costs that the lawsuit had accrued. The potential for these penalties to multiply based on the number of violations and affected employees meant the total theoretical damages had escalated into the millions, creating immense pressure for a resolution.
Key Arguments and Proceedings
The lawsuit, filed in April 2022, immediately set the stage for a lengthy and complex legal battle. The parties had spent several months conducting discovery, exchanging evidence, and preparing for a potentially massive class or representative trial before they shifted their focus toward settlement discussions.
Legal Representation
Plaintiff(s): Kayla Vitela (Proxy for the State of California)
Counsel for Plaintiff(s): Mark Yablonovich | Lisa J. Hartlep | Tony Roberts
Defendant(s): Sizzling Platter, LLC | Sizzling Wings, LLC dba Wingstop | SPLAT HoldCo, LLC
Counsel for Defendant(s): Aaron A. Buckley | Ryan J. Evans
Key Arguments or Remarks by Counsel
Claims
Vitela’s counsel had mounted an aggressive case, detailing widespread non-compliance with labor laws. The claims outlined in the complaint included:
Meal and Rest Period Violations: Counsel argued the Defendants had failed to provide legally required, uninterrupted, 30-minute meal breaks and 10-minute rest periods. They contended that in cases where breaks were missed or interrupted, the employees had not received the required premium pay.
Wage Statement Inaccuracies: The Plaintiff claimed that the companies had not furnished employees with accurate and itemized wage statements, which constituted a violation of the Labor Code. These inaccuracies complicated the employees’ ability to track their hours, rates of pay, and deductions properly.
Failure to Pay Final Wages Timely: The complaint asserted that when employees separated from the company, whether voluntarily or involuntarily, the Defendants had failed to pay out all earned wages immediately or within the legally prescribed short timeframe. This failure triggered "waiting time" penalties.
Unreimbursed Business Expenses: Vitela’s team had also argued that employees frequently used their personal phones or other equipment for work purposes and that the employer had not adequately reimbursed them for these necessary business expenses.
Defense
Defense counsel for the Sizzling Platter entities maintained a comprehensive denial of all allegations in their answer to the complaint. They asserted numerous affirmative defenses, signaling their preparedness for a full legal fight. The defense had argued that the companies acted at all times in good faith, and that any purported violations were unintentional, minor, or resulted from standard business practices that they believed were compliant with the law. They vigorously challenged the Plaintiff’s ability to serve as a representative under PAGA, questioned the scope of the alleged aggrieved employee pool, and claimed that the statute of limitations had already run on many of the alleged violations. They further argued that the company had implemented policies and procedures designed to ensure compliance, and that any isolated failures did not rise to the level of systematic wrongdoing necessary for PAGA penalties.
Settlement Reached
After extensive, Court-mandated mediation, the parties had agreed to a resolution that brought the hard-fought labor litigation to a close. The settlement avoided the uncertain outcome of a jury trial and allowed the corporate Defendants to mitigate what could have been significantly higher civil penalties. The parties reached a total settlement amount of $1,300,000.00.
This substantial figure represented a combined payment to cover the civil penalties under PAGA, restitution for the aggrieved employees who had suffered the alleged wage and hour violations, and a significant portion dedicated to covering the Plaintiff’s attorneys’ fees and the costs associated with the administration of the settlement. The finalization of this agreement confirmed a considerable victory for the employees represented by Vitela, securing financial compensation for the claims the Plaintiff had originally raised on behalf of the State. The settlement officially concluded the action, preventing the case from proceeding to the Courtroom phase where a jury would have decided the fate of the company’s labor practices.
Court documents are available upon request at jurimatic@exlitem.com