Eataly settles class action alleging FLSA violations.
Eataly, a New York-based Italian market chain, has settled a class-action lawsuit with employees, agreeing to pay $1,887,500 to resolve allegations of Fair Labor Standards Act violations at its Flatiron and Financial District locations. The lawsuit was originally filed on November 29, 2017, against defendants Eataly America, Inc., Eataly USA LLC, Eataly NY LLC, Eataly NY FIDI LLC, Eataly USA CEO Nicola Farinetti, and Eataly USA CFO Adam Saper. Any employees who worked at the two stores between November 29, 2011 and November 4, 2020 are eligible to receive payment.
In the suit, the plaintiffs alleged, “Eataly violated New York labor law and the Fair Labor Standards Act by failing to pay wages for all hours worked due to a policy of time shaving, failing to provide proper wage and hour notice and “failing to provide proper wage statements.” The plaintiffs also claimed supervisors “routinely instructed them to perform unpaid off-the-clock work.”
In 2018 the Italian market suit was certified as a class-action, and District Judge Katherine B. Forrest wrote the “plaintiffs have sufficiently demonstrated that specific supervisors and/or managers at Eataly violated the relevant statutes by engaging in ‘time shaving’ and other illegal practices.”
Former employees had disclosed Eataly switched to an “admin fee” system for expensive buyouts of restaurant event spaces which led to its servers receiving less than they had been for large events and parties.
“They’re making money on top of money, then they’re saving on labor, and it’s not just you come in and it’s an easy party,” one plaintiff said. Another added, “They would especially make the back waiters and those folks do a lot more of that – which, again, is not part of their jobs – to empty out an entire restaurant of furniture, bring it up on the roof in rain and snow, and then have to bring it back in.”
Earlier in 2020, Eataly also rolled out a Paycheck Protection Program loan to rehire staff at lower wages. An email sent by North America executive vice president Raffaele Piarulli indicated employees could opt into the program or “permanently resign from your position instead.” Many felt they were left with no choice but to accept a lower rate, especially during the pandemic.
Employees of the Italian market chain also reported incidents in which they were written up for circumstances beyond their control. One plaintiff reported suffering from chronic back pain. When this flared up during a New Year’s Eve shift and he was unable to continue working, he was written up. He provided a doctor’s note, as instructed, but was given a final warning that he would be terminated if the condition continued to interfere with his position.
A spokesperson for the company, Lisa Serbaniewicz, said the defendants “deny all material allegations” and “deny any wrongdoing of any kind whatsoever, and without admitting any liability.” She adds, “While we maintain that all employees were paid for all hours worked, we decided to prioritize a resolution and have consequently settled this matter.”
Of the back pain incident, she added, “Per the disciplinary action form, the individual failed to get shift coverage on a day management alerted the staff that call-outs wouldn’t be accepted.”
With this management style in place, it’s unsettling to consider how a positive coronavirus test might be handled.