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Steak 'n Shake Settles Overtime Lawsuits for $8.3M

Steak 'n Shake location at 7715 N. University in Peoria.
Peoria County Property Tax Records
Steak 'n Shake location at 7715 N. University in Peoria.

Steak 'n Shake has agreed to an $8.35 million payout to 714 plaintiffs who allege the company broke federal and state overtime laws. 

In May, U.S. District Judge John A. Ross in St. Louis ordered the company to pay plaintiffs in Sandra Drake's class-action lawsuit an amended $7.6 million after they alleged they were improperly classified as management employees and made to work more than 40 hours a week without overtime pay. A federal jury found in favor of the plaintiffs in the Drake case. 

A similar lawsuit was filed by Corinna Clendenen in federal court in Peoria in 2017, alleging the same practice was occuring in Central Illinois. That case was later moved to Ross' courtroom due to the similarity with the previous case. 

On Monday, documents filed in federal court announced the $8.35 million combined settlement agreement in both cases with Steak 'n Shake parent company Biglari Holdings. Under the agreement hammered out with the attorneys representing plaintiffs in both cases, the 286 Drake plaintiffs from Missouri will receive an average $9,964 payout. The 428 Clendenen plaintiffs will receive an average $5,565 payout.

Steak 'n Shake has suffered financially in recent years, with numerous restaurants closed across the U.S. pending the sealing of new franchising agreements with third-party operators. That includes the Steak 'n Shake location at 7715 N. University St. in Peoria, which ostensibly closed in late January 2019 for remodeling.Unlike many chain restaurants, Steak 'n Shake outright owns-and-operates many of its locations currently.

The plaintiff's lawfirm, Donelon P.C. of Kansas City, Mo., acknowledged Steak 'n Shake's perilous financial condition in the settlement filing. 

Through the terms of this agreement, Drake and Clendenen class members are ensured payment now for a sum certain. The alternative choices are not as good. Uncertainty and delay from appealing Drake and litigating Clendenen balanced against SnS’s precarious financial situation warrants approval of this settlement. This one factor often impacts courts in finding that a settlement is fair and reasonable.

The court still has to approve the settle agreement. Donelon said in the filing it has only heard positive feedback from plaintiffs, so far. 

WCBU has contacted Donelon P.C. and Steak 'n Shake for further comment. 

Steak 'n Shake was founded in Normal in 1934. The company later moved its headquarters to Indianapolis. 

Copyright 2021 WCBU. To see more, visit WCBU.

Tim Shelley is the News Director at WCBU Peoria Public Radio.