Wage lawsuit against Dead Freddies settled for $630K

Bringing to an end more than a year of litigation, the 26 plaintiffs in the suit filed against OC Freddies LLC will receive a total of $395,000 for their claims, and lawyer Howard Hoffman will receive $235,000 in fees, as ordered by Magistrate Judge Beth Gesner in documents made public this week.

The agreement, reached jointly by the parties, makes no comment on the merits of the wage claims brought forth by the employees, nor does it assign blame or seek apology for the practices alleged in the suit.

The payments range from a few hundred to tens of thousands of dollars, split in half to represent unpaid wages and liquidated damages.

For example, the greatest single payout awarded to a plaintiff is about $61,000. About $30,500 of that represents unpaid wages, and will be taxed as such as W-2 income. The other half, as outlined in the agreement, is subject to no deductions whatsoever, and is treated as 1099 income for tax purposes. The deal contains mechanisms to ensure OC Freddies pays the required payroll taxes on this money.

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