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Steak n’ Shake ordered to pay $7.7m in unpaid overtime costs

ST LOUIS (WEEK) — A federal judge has doubled the fees fast food chain Steak n’ Shake must pay in unpaid overtime to management employees.

In a class action lawsuit, 286 managers from the St. Louis area said they were required to work at least 50 hours, and sometimes as many as 70 hours a week with no overtime pay. Base salaries were typically less than $40,000 a year. Much of their time was spent performing duties classified as non-exempt, such as washing dishes, cooking, cleaning, waiting tables and running the cash register, the plaintiffs claimed.

In February, a federal jury in St. Louis found the fast food chain violated the law by improperly classifying managers as exempt from overtime laws, and ordered Steak n’ Shake to pay the managers about $3 million in pay.

Last Friday, U.S. District Judge John Ross more than doubled the money owed by Steak n’ Shake, to roughly $7.7 million.

It appears the chain could face even more payments under a similar class-action lawsuit filed by Corinna Clendenen in Peoria on behalf of nine other plaintiffs. She alleges Steak n’ Shake violated Illinois wage laws under similar practices to those described in St. Louis.

Earlier this month, U.S. District Judge Joe Billy McDade transferred the case from Peoria to Judge Ross in St. Louis.

Steak n’ Shake has shown some signs of distress in recent months. The restaurant chain has closed numerous restaurants across the country temporarily until franchisers can be found, including two in Peoria.

The Steak n’ Shake location at 7715 N. University closed in January under the auspices of remodeling. The location at 5036 N. Big Hollow closed in April. The chain said the restaurants are awaiting new franchise agreements. Unlike many fast food chains, Steak n’ Shake currently owns and operates many of its locations.

The burger chain has Central Illinois roots. The first Steak n’ Shake opened in Normal in 1934. The company later relocated its corporate headquarters to Indianapolis.

Tim Shelley

Social Media & Digital Content Manager

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