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December 1, 2011

On November 17th, Panera Bread entered into an agreement as to the proposed settlement of two class actions brought in California courts by former employees claiming that, among other allegations, the restaurant chain did not pay them overtime in violation of California law.

The proposed settlement is conditioned upon final approval by two state superior courts, the SEC filing states. It adds that Panera has reserved $5 million for the payment of claims under the proposed settlement and that the company did not include the reserve in its Oct. 25 fourth quarter guidance.

The lawsuit was filed in 2009 in Contra Costa County by former employee Nick Sotoudeh and joined in 2011 by former employee Gabriela Brizuela. Sotoudeh worked as an assistant manager at a Panera store in Concord, Calif., from March 2007 to April 2009. Brizuela worked as a customer service associate at a Palm Springs, Calif., store from March 2009 to February 2010. The complaint claimed that Panera violated the California Labor Code by regularly failing to pay them and similarly situated employees the minimum wage and never paying them the applicable overtime rate for time they spent working in excess of either eight hours in a day, 12 hours in a day, or 40 hours in a week.

The two former employees also stated that the company forced them to work during legally required meal and rest periods and did not pay employees earned wages at the time of their discharge or within 72 hours of their voluntarily leaving employment by Panera.

Additionally, the company failed to pay wages when they were due or to provide employees with complete and accurate wage statements, Sotoudeh and Brizuela’s complaint states. It also asserts that Panera’s alleged misconduct amounted to unlawful business acts and practices in violation of the California Business and Professions Code.

This past July 22, Panera employee David Carter filed a proposed class action alleging similar violations by the company in the San Bernardino County Superior Court.  12.01.2011

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