Lambson v. Ritz-Carlton: Luxury Hotel Chain Agrees to $2 Million Settlement of Wage and Hour Claims

Ritz-Carlton Hotels has agreed to pay $2 million to settle a class action lawsuit alleging unpaid overtime as well as meal break and vacation pay violations. See Mot. for Prelim. Approval, Lambson v. The Ritz-Carlton Hotel Co., LLC, No. 11-06669 (N.D. Cal. Feb. 1, 2013). Approximately 1,500 current and former employees of three California Ritz Carlton locations — the Ritz-Carlton Residences in San Francisco, Ritz-Carlton Half Moon Bay and Lake Tahoe Ritz-Carlton — will directly benefit from the settlement, which must be approved by U.S. District Judge Charles Breyer.

The settlement was reached after the parties worked (both formally and informally) with noted wage and hour mediator David Rotman, whose proposal was ultimately accepted by the parties. See Mot. for Prelim. Approval at 2. The preliminary approval papers describe the settlement as a “tremendous recovery” for the class members, and note that none of the $2 million settlement fund will revert to the defendant. Id. at 3. Further, the approval papers contend that the defendant’s total exposure is $6.8 million, and thus the $2 million settlement “represents an approximately 29.4% recovery for the class members.” Id. at 6.

Plaintiffs’ counsel are seeking $635,000 in fees and costs. See id. at 22-23. The settlement also proposes a $15,000 incentive payment to each named plaintiff, as compensation for the distinct risks and demands they undertook relative to other class members.