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Zaro's Bakery Pays $1M To Settle Workers' Wage Suit

Law360—Dan Prochilo

Zaro's Bakery reached a $1.05 million settlement of a wage-and-hour class action filed by deliverers, retail workers and other employees who accused the New York-based chain of kosher bakeries of failing to pay them overtime, taking their tips and other violations, according to a proposed agreement filed Wednesday.

Reached after two years of litigation and multiple failed negotiations, the deal filed in New York federal court called for varying amounts of compensation to be paid to workers in three different classes, $350,000 of the settlement fund to be allocated to the plaintiffs' attorneys and $25,000 enhancement awards to be paid out to the five named plaintiffs.

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Four workers, Francisco Flores, Constantino Hernandez, Enrique Hernandez and Valeriano Salvador, sued Anjost Corp., better known as Zaro's, on behalf of all the company's tipped employees in March 2011. A fifth lead plaintiff, Alejandro Jimenez, joined the suit in late September of that year. 

The workers accused the 11-store chain of improperly making deductions from their wages for their uniforms, failing to pay them overtime, withholding their tips, providing them with inaccurate wage statements and committing other infractions of the Fair Labor Standards Act and New York's Labor Law.

The court certified three classes of employees in January 2012 made up of Zaro's workers who served as delivery persons, retail employees or in any other non-overtime-exempt capacity between March 2005 and the date when the court would grant the agreement preliminary approval.

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The workers were represented by Justin Swartz and Michael Scimone of Outten & Golden LLP and by C.K. Lee of Lee Litigation Group PLLC.