Panda Express Settles Overtime Pay Case for Up to $3 Million

The California-based Chinese food restaurant chain agreed to settle a collective action brought by 155 general managers for close to $3 million.  In Kudo v. Panda Restaurant Group Inc. (09-cv-00712, U.S. District Court, Southern District of New York), nationwide general managers claimed that they were improperly classified as exempt from the coverage of the Fair Labor Standards Act (FLSA), which, among other things, mandates the payment of overtime to employees, who work more than 40 hours in a workweek.

According to the general managers, they spent significantly more time performing nonexempt duties, such as preparing food, taking orders, removing trash, and collecting payments from customers, than performing managerial or exempt tasks.

This case illustrates, once again, that a worker’s title does not determine whether or not the worker is exempt, even if the worker is being a paid on a salaried and not hourly basis.  Duties and functions must be scrutinized to determine the precise nature of an employee’s job function to ensure proper classification.

The settlement appears to bring an end to this case, which was pending in the U.S. District Court for the Southern District of New York since 2009.