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Gristedes Pays Up To End Fee Dispute With Outten

Law360—Richard Vanderford

Grocery chain Gristedes on Thursday agreed to settle a fee dispute with plaintiffs law firm Outten & Golden LLP, which claimed that the company obstructed the settlement of a long-running employment fight.

Gristedes, a grocer helmed by prominent New York Republican John Catsimatidis, agreed to pay $645,000 in attorneys' fees to Outten, Outten attorney Justin Swartz said. The firm represented workers who brought a lawsuit over their pay.

Citing the deal, Magistrate Judge Andrew J. Peck closed the now nearly nine-year-old case, though he said it can be reopened if Gristedes fails to pay.

“‎It's nice for us to get paid but what really matters is the workers and we are proud of what we got them,” Swartz told Law360.

Swartz’s team represented workers who claimed that Gristedes shorted them on overtime pay.

Though Gristedes agreed to pay $3.5 million to settle, it continued fighting various aspects of the case on appeal, claiming among other things that it had no money to pay a judgment.  

Outten in August asked for another $800,000 to cover the extra expenses it incurred trying to wrangle money out of the company. 

Catsimatidis, who was personally sued after his company cried poverty, appeared in Manhattan federal court Thursday to participate in the fee settlement discussions.

In addition to heading the 30-store chain, Catsimatidis has gained notoriety in his run to be Republican candidate for mayor. 

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The court granted class and collective certification in 2006. In 2008, it granted the plaintiffs’ partial summary judgment on liability, holding that Gristedes failed to pay class members overtime and had retaliated against two plaintiffs by filing frivolous counterclaims.

Gristedes eventually agreed to pay $3.5 million to settle the suit, which covered claims from 500 workers. A court later ordered it to pay another nearly $3.8 million in fees and costs to Outten, which represented the plaintiffs, but it only actually turned over the money after intense legal wrangling, Swartz said.

The chain claimed it had no money to pay, until the court ruled that Catsimatidis himself could be tapped to pay the settlement.

Gristedes appealed that finding, and lost.

It also appealed the fee award the court allotted to Outten, and lost that too.

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The case is Torres v. Gristedes Operating Corp., case number 1:04-cv-03316, in the U.S. District Court for the Southern District of New York.