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Class Actions – NFL Drug Abuse

A proposed class action filed against the National Football League (NFL) alleges decades of drug abuse perpetrated by team medical officials. Specifically, the lawsuit claims that NFL players were routinely given prescription pain medication in an effort to get them back on the playing field, in contravention to medically accepted practices and Federal drug laws.

The suit explains that players were neither warned of the dangers to their long-term health, nor told of the potential for misuse and dependence. It further alleges that the NFL has been aware of the issue for years and recently sought to curb the use of certain prescription drugs.

Plaintiffs are seeking economic and non-economic damages from the NFL, along with enhanced medical monitoring.

 

Pharmaceutical Product Liability Lawsuit

“Heightened” Pleading Standards in Pharmaceutical Product Liability

The U.S. Supreme Court’s decisions in Twombly and Iqbal have altered the pleading landscape for pharmaceutical product liability actions.  The new decisions unravel nearly sixty years of precedent established by the Supreme Court in Conley v. Gibson, which held that, “a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiffs can prove no set of facts in support of his claim which would entitle him to relief.”

The “no set of facts” standard of Conley was retired in favor of the more stringent approach advanced in Twombly, which required a complaint to have enough “factual enhancement” to cross the line “between possibility and plausibility of entitlement to relief.”  Iqbal subsequently confirmed that the “decision in Twombly expounded the pleading standard for all civil actions.”  The Court explicated that Rule 8 demanded “more than an unadorned, the-defendant-unlawfully-harmed-me accusation.”

As a result of the shifting pleading burden, pharmaceutical product liability complaints are increasingly met with motions to dismiss.  Beyond alleging the individual elements of each cause of action, a complaint must now provide the court with a sufficient basis to test the factual allegations against each element and assess whether the possibility to plausibility barrier has been traversed.  Plaintiff’s counsel must now seek, for example, to specifically identify how a product’s labeling is insufficient or how a product is defectively designed without the typical benefit of discovery.

Trief & Olk has experience navigating this new terrain, and has dealt with numerous pharmaceutical product liability actions in the wake of Twombly and Iqbal.

Limits on Job Responsibilities for Tipped Employees

The Fair Labor Standards Act (“FLSA”) establishes a framework by which employers can take the benefit of a tip  credit and pay tipped employees—those who customarily and regularly receive more than $30 per month in tips—a reduced hourly rate of pay.  Employers who elect to use the tip credit must ensure that an employee’s tips combined with the employer’s pay equal at least the minimum hourly wage.

The benefit of the tip credit for employers is not unbounded, as tipped employees can only spend a portion of their time performing certain tasks while receiving this reduced rate of pay.  Under the FLSA, 29 U.S.C. § 203(m), it is a violation to have a tipped employee spend in excess of twenty percent (20%) of their time performing non-tipped duties such as maintenance and preparatory work.

It is also a violation of the FLSA to have tipped employees receiving a reduced rate of pay perform tasks that are completely unrelated to their occupation.  In this scenario, the tipped employee is essentially engaging in a “dual job;” performing non-tipped work while being paid a reduced rate intended for a tipped position.

Trief & Olk has extensive FLSA experience, having litigated against the world’s largest full-service restaurant company, Darden Restaurants, Inc.  Part of the claims in that case centered on the practice of using tipped employees such as servers and bartenders to perform extensive side work in excess of twenty percent (20%) of their time, and further, having those tipped positions perform work completely unrelated to producing tips.

Property Insurance Denial Lawsuit

Replacement Cost Value May Be Recoverable In Limited Circumstances Even When the Insured Does Not Rebuild

Policyholders purchase property insurance to ensure that their home or real estate investment is protected against accidents such as fires. Although property insurance coverage will usually be either actual cash value or replacement cost coverage, the standard type of coverage offered by most insurers is replacement cost coverage. Actual cash value is usually an undefined term in a policy, but is generally equal to the replacement costs minus any depreciation. It represents the dollar value that the policyholder could expect to receive if the property in the marketplace immediately prior to the accident.

In contrast, replacement cost coverage is usually defined in the policy as the cost to replace the damaged property with materials of like kind and quality, without any deduction for depreciation. Unlike actual cash value coverage, with replacement cost coverage the policyholder expects to avoid the risk of having incomplete coverage in exchange for higher premiums.

Typically with policies that offer replacement cost coverage, the contract will include a provision that the insurer will not pay more than actual cash value until the policyholder replaces the damaged property. A policyholder dispute may arise when it is impossible for the policyholder to replace their damaged property and the insurer denies full payment based on the replacement condition provided in the contract. The insurer may be estopped from relying on such contract language when the policyholder’s inability to replace the property is the result of the insurer’s actions.

Zaitchick v. American Motorists Ins. Co., 554 F. Supp. 209 (S.D.N.Y. 1982) is instructive on this issue.   In Zaitchick, the insured brought an action against the insurer to recover replacement cost value of their home after it was destroyed by a fire. The insurer refused to make any payments to the insurer under the policy due to alleged fraud and arson. After rejecting the insurer’s defenses of fraud and arson, the court then determined the proper measure for damages. The insurer argued that it was only liable for actual cash value of the destroyed home because the insurance contract required the insurer to replace the property before the insurer would pay replacement costs. The insured argued that they were prevented from rebuilding their home because the insurer had refused to pay them even actual cash value to enable them to begin repairs. The court agreed and concluded that the insurer’s conduct made it impossible for the insurer’s to fulfill the replacement condition excusing the insurer from the replacement condition.

Similarly, in a 2014 action brought on behalf of a client who lost her business in a fire, Trief & Olk was able to secure a jury verdict finding the insurance broker negligent in undervaluing her property and failing to procure adequate insurance coverage. On the eve of trial, the broker argued that we should be precluded from offering evidence of replacement cost damages because the only relevant measure of damages was actual cash value since our client had not replaced the property as required by the policy terms. Trief & Olk successfully argued that because our client was prevented from rebuilding as a result of the broker’s negligence he could not rely on the policy’s terms to limit damages to actual cash value and the jury was allowed to hear evidence concerning replacement cost damages.

In sum, under limited circumstances a policyholder may be able to recover replacement costs despite not fulfilling the replacement condition included in a policy when the conduct of the insurer or insurance broker prevented the insured from rebuilding.

More workers may join Darden lawsuit

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By Sandra Pedicini
July 21, 2013

Up to 300,000 current and former Darden Restaurants employees will be invited to join a lawsuit filed against the company last year alleging it underpaid servers.

A federal judge earlier this month granted what’s called “conditional certification of a nationwide class” in the lawsuit, filed last year in Miami. Orlando-based Darden is being required to provide names and addresses of people who worked as servers and bartenders between Sept. 6, 2009, and Sept. 6, 2012, for several of its brands, including Olive Garden, Red Lobster and LongHorn Steakhouse. Those people will be notified they have the right to join the lawsuit, said David Lichter, an attorney for the employees.

“It will be some fraction of that” 300,000 who will actually opt to join, Lichter said.

Darden said in an email it is relatively easy to get the initial certification that the plaintiffs’ attorneys received. Darden is pursuing decertification, which if granted means that those employees invited to join the lawsuit would be dismissed from it. They could pursue claims on their own, though.

“We follow the law and believe these allegations are baseless and not at all reflective of how we operate our business,” Darden said in an emailed statement.

The lawsuit, which currently has more than 50 plaintiffs, accuses Darden of forcing employees to work off the clock.

Sonny’s updates image
Winter Park-based Sonny’s Real Pit Bar-B-Q is updating its image – starting with a new name. The company is now simply Sonny’s BBQ.

It also will start using a new logo, which boasts “local pitmasters since ’68.” The company said its restaurants will start getting new décor, too.

New restaurants coming to The Grove
Several new restaurants will open in the second phase of Tavistock Development Co.’s expansion ofThe Grove at Isleworth. Dexter’s, Jeremiah’s Italian Ice and BurgerFi will all open at the center, which will have 200,000 square feet when completed.

Tijuana Flats introduces Braille menus
Tijuana Flats has added Braille menus at its 93 restaurants.

The Maitland-based restaurant chain said the menus came about after a suggestion from employees atSocial Ventures in Jacksonville, which creates jobs for people with disabilities. Some of its employees are blind.

Darden expands in Latin America
Darden Restaurants recently signed agreements to operate more restaurants in Latin America.

Grupo Piramide will develop Darden’s Red Lobster, Olive Garden and LongHorn Steakhouse brands in Guatemala, El Salvador, Honduras, Nicaragua and Costa Rica. Dosil S.A. will develop the concepts in Peru. Both of the new franchisees already operate other American casual-dining and quick-service restaurants.

With these new agreements, Darden will have operations in 12 markets throughout Latin America. Darden recently signed a deal with International Meal Company, which will operate Red Lobster, Olive Garden and LongHorn Steakhouse in Brazil, Colombia, Panama and the Dominican Republic. Darden has also had franchisees in Mexico and Puerto Rico for some time.

Grupo Piramide operates American brands such as Starbucks, KFC, Pizza Hut and Wendy’s. It has a total of 662 restaurants and more than 19,000 employees.

Dosil S.A. runs Chili’s, Starbucks, KFC, Pizza Hut and Burger King. It has a total of 302 restaurants and 11,000 employees.

 

Trief & Olk, Higer Lichter and Givner files proposed class action against Darden Restaurants

By: Paul Brinkmann
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Miami-based law firm Higer Lichter & Givner is one of three firms that filed a proposed class action overtime lawsuit Wednesday against all restaurant chains owned by Darden Restaurants, including The Capital Grille, Longhorn Steakhouse, Olive Garden and Red Lobster.

Darden is considered the world’s largest full-service restaurant group, with almost 170,000 employees.

The suit, on behalf of two plaintiffs, alleges servers were paid less than the minimum wage and were not compensated for time they were required to work off the clock.

The suit was filed in South Florida on behalf of Amanda Mathis, a Florida resident and former server at several Longhorn Steakhouse locations, and James Hamilton, a Virginia resident and former Olive Garden server in Georgia.

It alleges that Darden (NYSE: DRI) violated the Fair Labor Standards Act by paying many of its servers below the applicable minimum wage, which can be as low as $2.13 an hour for tipped work and $7.25 an hour for non-tipped work. It also alleges that servers were required to work off the clock at the beginning and end of their shifts.

Darden spokesman Rich Jeffers said in an emailed statement that the company complies with labor laws and takes claims of impropriety seriously, but had never heard of the complaints from the plaintiffs specifically.

“We have a robust dispute resolution program designed to quickly and effectively address any employee concerns. We have no record of either of these two individuals utilizing that process,” Jeffers said. “As for the allegations contained in the complaint, we believe they are baseless and fly in the face of our values and how we operate our business.”

Attorney David Lichter said he believes the suit is the first to name all Darden’s restaurants.

The proposed class would be current or former servers employed at any time from August 2009 to the present.

The other plaintiff firms are New York-based Trief & Olk and New Jersey-based Cohn Lifland Pearlman Herrmann & Knopf.

More plaintiffs added to Darden Restaurants lawsuit over wages

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* Lawsuit claims company underpays restaurant workers
* Darden is among the largest U.S. restaurant operators
* Company has called the lawsuit “baseless”

MIAMI, Nov 16 (Reuters) – A lawsuit alleging Darden Restaurants, Inc violated U.S. labor laws by underpaying servers at its Olive Garden and Red Lobster chains and other eateries has been expanded to include dozens of new plaintiffs, a lawyer said on Friday.

The suit, filed in September in federal court in Miami, accuses one of the largest restaurant operators of failing to pay federally mandated minimum wages and forcing its waiters and waitresses to work “off-the-clock” before or after their shifts.

The original lawsuit named two plaintiffs, but now includes more than 50, said David Lichter of Higer Lichter & Givner, one of the lead attorneys for the plaintiffs.

“Since we filed the lawsuit, we’ve had a tidal wave of inquiries from across the country,” he said.

Filed under the Fair Labor Standards Act, the lawsuit also claims many employees at Darden’s restaurants failed to receive appropriate overtime wages for work in excess of 40 hours per week.

A Darden spokesman declined to comment on Friday. In September, a company official called the accusations “baseless” and said they “fly in the face of our values and how we operate our business.”

The lawsuit seeks to collectively represent thousands of current or former employees dating back to August 2009 at Darden’s restaurants that include: Olive Garden, Red Lobster, LongHorn Steakhouse, Capital Grille, Bahamas Breeze and Seasons 52.

According to its company website, Darden owns and operates more than 2,000 restaurants and employs 185,000 people.

The case is Mathis et al vs. Darden Restaurants, Inc. et al, U.S. District Court for the Southern District of Florida, No. 12-61742-RSR.

Darden lawsuit expands to 50 plantiffs

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By Sandra Pedicini, Orlando Sentinel 3:00 p.m. EST, November 16, 2012

A federal lawsuit alleging Orlando-based Darden Restaurants underpaid servers has been expanded from two plaintiffs to 50.

The legal action now includes former and current employees at Darden’s restaurants across the country, including Bahama Breeze and Seasons 52.

The lawsuit, filed in September in federal court in Miami, accuses Darden of requiring servers to work off the clock and making them perform too much non-tipped work such as cleaning. It was originally filed on behalf of two former employees of LongHorn and Olive Garden in Florida and Georgia.

A Darden spokesman could not be reached for comment Friday. When the original suit was filed, Darden said it believed the claims were baseless.

One of the two original employees was removed from the suit because he had worked for Darden more than three years before it was filed. The new employees added to the suit all fall within the three-year statute of limitations, said David Lichter, one of the plaintiff’s attorneys.

Attorneys are seeking collective-action status, which could potentially add thousands of employees to the suit.

Nasty customers and heartless managers

By Al Lewis
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DENVER (MarketWatch) — Kim Stahler was a waitress at a Red Lobster through most of the 1990s.

She was so angry when she quit, she started a popular website called the Stained Apron, where restaurant servers of every stripe could air their seemingly endless frustrations about their jobs in often colorful ways.

“It was making me hate people,” Stahler said of her waitressing job. “It was turning my heart black. I needed a creative outlet where I could start to lose those feelings.”

Stahler appears to be free at last. Over the ensuing years, she went to school and became a college librarian in Pennsylvania. She no longer updates her website, but has left it up for posterity at www.stainedapron.com . Its timeless tales of nasty customers and heartless managers are worth a read.

All these years later, she said she is not surprised to see a civil lawsuit filed against Orlando, Fla.,-based Darden Restaurants Inc. DRI +0.81%  last week charging violations of federal labor laws.

In a Miami federal court, the company stands accused of underpaying thousands of employees at its popular eateries, including Olive Garden, LongHorn Steakhouse, Capital Grille, and Red Lobster.

“They make a tremendous profit by not paying proper wages,” Stahler said.

Miami attorney David Lichter said his lawsuit against Darden outlines some common but illegal practices in the restaurant industry, not just at Darden. These can include forcing wait staff to work off the clock, denying them overtime, and making them spend too many hours on chores that do not earn tips, from filling salt shakers to cleaning window blinds.

Almost everyone knows there is no standing idle in the restaurant business, even when there isn’t a customer to be served. “We’ve heard the phrase in the hospitality industry ‘If you’ve got time to lean, you’ve got time to clean,’” Lichter said.

“Certainly, Darden didn’t invent this conduct,” he continued. “It’s not the first time a restaurant chain has been sued. .. We’re hoping that the larger hospitality industry sits up and takes notice.”

Darden spokesman Rich Jeffers called the lawsuit “baseless.” Its allegations “fly in the face of our values and how we operate our business,” he said. “Each of our brands complies with all federal and state labor and employment laws, and we’re proud of our standing as an employer of choice.”

On the plus side, Darden ranked No. 99 on Fortune Magazine’s list of 100 best places to work for 2012. It also made the list last year. Fortune said the company is “a diversity champion; 30% of restaurant managers are minorities and 41% are women.”

On the minus side, Darden has been named in similar lawsuits. And last year, following a Department of Labor investigation, the company was fined $30,800 and agreed to pay more than $25,000 in back wages to Olive Garden workers in Mesquite, Texas.

Also last year, the company paid $27,000 in back wages and a fine of nearly $24,000 for labor violations involving 109 Red Lobster workers in Lubbock, Texas. Jeffers said these cases were “isolated instances,” and did not result in any evidence that a manager asked an employee to work off the clock.

So far, Lichter’s case is a tiny one. He has only two former Darden employees named in his lawsuit. And he is not making them available for interviews, even after sending out press releases to attract national attention to his case. Jeffers notes that neither of these former employees bothered to air their complaints internally, to which Lichter had no comment.

Lichter, however, said he has heard from more than 300 current and former Darden employees interested in more information about his case. And he seeks to represent more than 1,000.

For now, we’ll just have to see how many Darden employees step up. Meantime, it is difficult to imagine a company doing so well, if the people who care for its customers are treated so poorly.

Darden stock has come roaring back from its 2008 low of about $14 a share. It now trades at nearly $55, close to its 52-week high. The company runs 2,000 restaurants, with more than 185,000 employees, and generates $8 billion in annual sales. If you haven’t been served at a Darden-owned restaurant, you probably will be soon. It also owns Bahama Breeze, Seasons 52, Eddie V’s and, after a recent acquisition, Yard House.

It may be that the company is so big, it doesn’t always run smoothly. It was a long time ago, but Stahler remembers her time at Red Lobster as something out of a satire.

“It was such high volume, a lot of corporate craziness, all these bad manager ideas,” she said. “It was like the movie ‘Office Space,’ where your boss is always telling you to do stupid things.”

“Most employees are trying to do a good job and get through their shift,” she said. “If a manager tells them to do something, it’s hard to say, ‘Oh, that’s illegal.’ “These things need to be exposed and talked about,” she said. “It’s not ‘baseless,’ as they say. I think the employees will be successful.”

Suits: eateries serve up pay abuses

By Michelle Celarier
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Restaurant owners, you’ve been served.

From McDonald’s to Mario Batali, restaurant owners have forked over big bucks in recent years to settle lawsuits brought by workers who claimed they were illegally underpaid.

Darden Restaurants, which owns Olive Garden, Red Lobster and the Capital Grille eateries in New York and across the country, is the latest to be hit with a lawsuit alleging the type of pay abuses that critics say are rife in the industry.

Darden workers claim that they were forced to work before clocking in, received less than minimum wage without getting the commensurate tip income, and were not paid overtime when forced to work more than 40 hours a week.

“This kind of practice didn’t start with Darden, and it’s not new,” said David Lichter, the lawyer representing the restaurant workers in a suit filed last week in Florida seeking collective action status. “We brought the lawsuit to force them to change,”

With $8 billion in revenue and $477 million in annual profit, Darden claims to be the largest full-service restaurant group in the US with about 169,000 employees. Restaurant labor costs eat up about about 31 percent of revenue.

Lichter says the company could be forced to pay millions of dollars if the workers win, depending on how many get involved in the suit. So far, about 300 employees from around the country have contacted his firm.

Last year, Darden was sanctioned twice by the Labor Department and forced to pay more than $100,000 in back wages and penalties in cases involving 249 workers. Two other suits, filed separately in Chicago and New York, are also pending.

Right now analysts think the suit is unlikely to have a material impact on Darden.

“If there is a risk here, I think it will be in a one-time cash payment versus some sort of ongoing labor issue,” said Stephens analyst Will Slabaugh.

But other cases have been piling up. On Aug. 30, workers won a similar suit against Applebee’s, though penalties haven’t been disclosed. Mario Batali in May paid $5.2 million to settle a suit involving employees at his New York restaurants who claimed that he skimmed tips owed them. And an earlier 2008 class-action claim against McDonald’s over pay issues has also been settled for an undisclosed amount.

A Darden spokesman said the allegations are “baseless and fly in the face of our values and how we operate our business.”