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Wynne v. McCormick & Schmick's Seafood Restaurants

August 8, 2008

JUANITA WYNNE, ON BEHALF OF HERSELF AND CLASSES OF THOSE SIMILARLY SITUATED, AND DANTE BYRD, CONSENT DECREE PLAINTIFFS,
v.
MCCORMICK & SCHMICK'S SEAFOOD RESTAURANTS, INC. AND MCCORMICK & SCHMICK RESTAURANT CORP., DEFENDANTS.



The opinion of the court was delivered by: Claudia Wilken United States District Judge

[PROPOSED] CONSENT DECREE

TABLE OF CONTENTS

INTRODUCTION .............................................................1

I. LITIGATION BACKGROUND ......................................1

II. PURPOSES OF THE CONSENT DECREE .............................2

III. DEFINITIONS ....................................................3

IV. JURISDICTION ..................................................5

V. TERM OF THE DECREE ...........................................5

VI. CLASS DEFINITION ..............................................6

VII. RELEASE OF CLAIMS ............................................7

VIII. GENERAL EQUITABLE PROVISIONS ...............................7

IX. SENIOR OFFICIAL AND REGIONAL EEO MANAGERS ................8

X. DIVERSITY MONITOR ............................................8

XI. BENCHMARKS FOR JOB FILLS FOR FRONT OF THE HOUSE POSITIONS ......................................................9

XII. REGISTRATION OF INTEREST ...................................15

XIII. SHIFT AND SECTION ASSIGNMENT AND COMPENSATION .........18

XIV. MANAGER INCENTIVE TO PROMOTE DIVERSITY ..................18

XV. INTERNAL COMPLAINT SYSTEM ................................19

XVI. RECRUITING ...................................................20

XVII. EMPLOYEE AND MANAGER TRAINING ...........................21

XVIII. REPORTING AND RECORDKEEPING ..............................22

XIX. COMPLIANCE REPORT TO THE COURT ...........................27

XX. DISPUTE RESOLUTION AND ENFORCEMENT PROCEDURES ........28

XXI. MONETARY RELIEF, NOTICE AND CLAIMS PROCEDURE ...........31

XXII. NOTICE TO CLASS ..............................................35

XXIII. OBJECTIONS AND OPT OUTS ....................................35

XXIV. CLAIMS ADMINISTRATION ......................................38

XXV. SUBMISSION OF CLAIM FORMS ..................................39

XXVI. REVIEW OF CLAIM FORMS ......................................40

XXVII. PLAN OF ALLOCATION .........................................42

XXVIII. DIVERSITY MONITOR FEES AND EXPENSES ......................44

XXIX. POST-APPROVAL ATTORNEYS' FEES AND EXPENSES ..............44

XXX. MISCELLANEOUS PROVISIONS ..................................45

INTRODUCTION

As a result of extensive arms-length negotiations supervised by a mediator, the Parties have reached a voluntary agreement that is contained in this Consent Decree.

I. LITIGATION BACKGROUND

Plaintiffs Juanita Wynne and Dante Byrd filed class-wide administrative charges with the EEOC on May 3 and June 29, 2005. On May 11, 2006 Plaintiffs filed the Complaint in this action alleging racial discrimination claims under Title VII, FEHA and Section 1981 on behalf of themselves and classes of McCormick & Schmick's African American employees and applicants.

Plaintiffs filed their First Amended Complaint on July 28, 2006. After filing the First Amended Complaint, the parties conducted discovery. Plaintiffs took the depositions of six Rule 30(b)(6) designees relating to Company operations, hiring practices, training, compensation policies, store openings, data collection, and others. Company deponents included the Director of Human Resources, the Director of Training, the Vice President of Operations, and others. During this period, Defendants took depositions of plaintiffs Juanita Wynne and Dante Byrd. Plaintiffs served written discovery, including interrogatories and document requests, and obtained many thousands of pages of documents from Defendants, including personnel manuals and policies, training materials, and employment applications. Plaintiffs also obtained, and with the assistance of expert statisticians analyzed, Company computerized personnel and payroll data from 2003 through 2006.

Defendants served written discovery on Juanita Wynne and Dante Byrd. Juanita Wynne and Dante Byrd responded to interrogatories and produced hundreds of pages of documents related to their employment at McCormick & Schmick's.

Plaintiffs and Defendants engaged expert consultants to analyze the payroll data, to determine whether disparities exist in hiring and compensation of African Americans in front of the house positions, and to calculate potential damages exposure. Expert consultants also assisted the parties in negotiating the settlement by proposing and analyzing various methodologies for establishing hiring benchmarks.

The Plaintiffs have vigorously prosecuted this case, and McCormick & Schmick's has vigorously contested it. As a result, the Parties were able to assess reliably the relative merits of the claims of the Plaintiffs and of McCormick & Schmick's defenses.

On July 12, September 26, and November 5, 2007, counsel for the Parties met to negotiate a settlement of this matter with the assistance of experienced mediator Hunter Hughes of Atlanta, Georgia. In addition, counsel for the Parties met face-to-face without the mediator on August 8 and September 12, 2007, and exchanged numerous written settlement proposals from July 2007 through February 2008.

The Parties agree that the formal and informal discovery conducted in this action -- the depositions taken by both sides, the documents produced, and the information exchanged during mediation, including expert consultant analyses, are sufficient to assess reliably the merits of the respective parties' positions and to compromise the issues on a fair and equitable basis. As reflected by the signatures of counsel at the end of this document, the Parties have consented to entry of this Decree.

II. PURPOSES OF THE CONSENT DECREE

The Parties have entered into the Consent Decree for the following purposes:

A. To resolve all disputes covered by this Consent Decree in such a way as to avoid further expensive and protracted litigation;

B. To use their Best Efforts to achieve equal employment opportunity for African Americans working at McCormick & Schmick's restaurants; and

C. To create an expedited procedure for implementing equitable relief pursuant to the terms of this Decree and distributing a monetary settlement to eligible members of the Settlement Class.

III. DEFINITIONS

A. "African American" for class membership purposes means all persons having origins in any of the Black racial groups of Africa, and includes individuals who identify as Black or African American, or who identify as more than one race so long as at least one of the races identified is Black or African American.

B. "Applicant Flow" means the percentage of individuals applying for specified positions who are African American, as specified in Section XI(A)(1) of the Decree.

C. "Back of the house" positions means all non-exempt restaurant-level positions not included in the definition of "Front of the House" positions.

D. "Best Efforts" means all reasonable steps necessary to comply with the specific objective to which the Best Efforts are directed.

E. "Civil Action" means Wynne v.McCormick & Schmick's Seafood Restaurants, Inc, Case No. 06-3153 CW (N.D. Cal.).

F. "Class Counsel" means Altshuler Berzon LLP; Lieff, Cabraser, Heimann & Bernstein, LLP; Lewis, Feinberg, Lee, Renaker & Jackson, P.C.; The Lawyers' Committee For Civil Rights Of The San Francisco Bay Area; Thomas A. Warren Law Offices; and Kingsley & Kingsley.

G. "Class Representative" means Juanita Wynne. H. "Expected Representation of African Americans in the Labor Market" is defined in Section XI(A)(2) of the Decree.

I. "Injunctive Relief Class" is defined in Section VI of this Consent Decree.

J. "Monetary Settlement Class" is defined in Section VI of this Consent Decree.

K. "Company" means McCormick & Schmick's Seafood Restaurants, Inc. and McCormick & Schmick Restaurant Corp.

L. "Company-wide Benchmark" means the company-wide benchmark as set forth in Section XI(B) of the Decree.

M. "Final Approval Date" means the date upon which the Court signs this Decree after having found that it is fair, adequate and reasonable.

N. "Front of the House" positions or jobs means: waiter, waitress, server, host, hostess, bartender, and cocktail server.

O. "McCormick & Schmick's" refers to McCormick & Schmick's Seafood Restaurants, Inc. and McCormick & Schmick Restaurant Corp.

P. "Party" or "Parties" means the Class Representative and McCormick & Schmick's.

Q. "Preliminary Approval Date" means the date upon which the Court enters an Order preliminarily approving this Decree, directing notice and an opportunity for persons falling within the definition of the Settlement Class to opt out of the Settlement Class or submit an objection to the Decree, and setting a fairness hearing.

R. "Relevant Census Occupation" means, for the waiter/waitress/server/ cocktail server positions, Census Occupation Code 411 (waiters and waitresses). For the bartender position, the Relevant Census Occupation Code is 404 (Bartenders). For the host position, the Relevant Census Occupation Code is 415 (Hosts and Hostesses).

S. "Release" means the Release of claims set forth in Section VII of the Decree.

T. "Released Parties" means the Parties who are beneficiaries of the Release of Claims set forth in Section VII of the Decree.

U. "Released Claims" means the Claims released as set forth in Section VII of the Decree.

V. "Relevant Geographical Area" means all census-defined counties/county sets within a 25-mile radius that contribute one or more employees to that particular restaurant's workforce. Determination of counties/county sets will be based on the ZIP codes of employee home addresses for all employees at the restaurant.

W. "Restaurant Benchmark" means the restaurant-level benchmark as set forth in Section XI(A) of the Decree.

X. "Settlement Class" is defined in Section VI of the Decree.

Y. "Settlement Effective Date" shall mean the first day following the last of the following occurrences:

1. The date on which the Final Order approving the Settlement has been signed; or

2. If an objection has been made to the settlement, the date the time to appeal or seek permission to appeal or seek other judicial review of the entry of a Final Order approving the Settlement has expired with no appeal or other judicial review having been taken or sought; or if an appeal or other judicial review has been taken or sought, the date the Final Order is finally affirmed by an appellate court with no possibility of subsequent appeal or other judicial review therefrom, or the date the appeal(s) or other judicial review therefrom are finally dismissed with no possibility of subsequent appeal or other judicial review therefrom.

Z. "Term of the Decree" means the period described in Section V of the Decree. AA. "White" means all persons who identify as White and do not identify as more than one race.

IV. JURISDICTION

The Court has jurisdiction over the parties and subject matter of this Civil Action. The First Amended Complaint in this action asserts claims that, if proved, would authorize the Court to grant the equitable and monetary relief set forth in this Decree.

Venue is proper in this Court. The Court shall retain jurisdiction of this Civil Action during the Term of the Decree for the purpose of entering all orders authorized by the Decree, which may be necessary to implement the relief provided in the Decree or to enforce the provisions of the Decree.

V. TERM OF THE DECREE

A. The equitable provisions of this Decree are effective immediately upon the Final Approval Date.

B. Except as otherwise provided herein, the provisions of this Decree and the agreements contained herein shall remain in effect for a period of five (5) years from the Final Approval Date, provided, however, that four (4) years after the Final Approval date, the Court may terminate the Decree, upon motion of the Company, if the Company has met all of its Company-wide Benchmarks (as defined in Section XI(B) below) during any consecutive three-year period prior to the fourth anniversary of the Decree.

VI. CLASS DEFINITION

A. Injunctive Relief Class

For purposes of the injunctive and declaratory relief provided in this Decree, the Settlement Class is certified under Federal Rule of Civil Procedure 23(b)(2) and consists of: "All African Americans employed by McCormick & Schmick's in Front of the House or Back of the House positions between May 15, 2002 and the date the Decree terminates."

B. Monetary Relief Class

1. For purposes of the monetary relief provided in this Decree, the Settlement Class is certified pursuant to Federal Rule of Civil Procedure 23(b)(3) and consists of: "All African Americans employed by McCormick & Schmick's in Front of the House or Back of the House positions between May 15, 2002 and the Preliminary Approval Date, except those who file a timely request to opt out of the monetary relief provisions of the Decree."

2. All African Americans hired by the Company after the Preliminary Approval Date may avail themselves of the equitable relief provided in the Decree but shall not be entitled to any portion of the monetary relief provided hereunder.

3. Settlement Class members who have filed a timely request to opt out of the monetary relief provisions of the Decree shall not be included in the Monetary Relief Class and shall not be held to release any claims for individual relief.

VII. RELEASE OF CLAIMS

A. Release of Claims by Settlement Class. Upon the Settlement Effective Date, all Monetary Relief Class Members who do not timely opt out will release all race discrimination claims against McCormick & Schmick's and its directors, officers, managers, agents, successors and assigns, which arise out of the conduct alleged in the First Amended Complaint under Title VII, 42 U.S.C. §1981, the California FEHA and/or any other state or federal law prohibiting race discrimination, for the liability period of May 15, 2002 through the Preliminary Approval Date.

B. Release of Claims By Juanita Wynne and Dante Byrd. Juanita Wynne and Dante Byrd, in exchange for consideration in the amount of $5,000 each, as provided in Section XXI(D)(4), will give McCormick's a release of all claims arising out of their application for employment and employment by McCormick's, including, for Ms. Wynne, a release of any non-class claims for race harassment/hostile work environment, and, for Mr. Byrd, a release of any non-class claims arising out of his application for employment with McCormick & Schmick's.

VIII. GENERAL EQUITABLE PROVISIONS

A. The Company shall not engage in or be a party to any act, policy, practice or procedure that discriminates, retaliates, or has the purpose of discriminating or retaliating against any Class Representative or member of the Class, and employee of, or applicant to the Company, or any other person because he or she testified, furnished information or participated in any investigation, proceeding, or hearing in connection with this lawsuit or any charge or complaint of discrimination on which this lawsuit is based; testified, furnished information or participated in connection with the monitoring or implementation of this Decree; or sought and/or received monetary and/or non-monetary relief pursuant to this Decree.

B. The Company shall make available to African-American employees and applicants the same opportunities and terms and conditions of employment as the Company affords similarly situated non-African American employees and applicants.

C. Class Counsel will have sole and exclusive authority to act for the Class on issues of compliance or non-compliance with this Decree.

D. The Company shall abide by the provisions of this Consent Decree, but otherwise shall maintain management discretion over decisions to select, hire, assign, transfer, train, promote, compensate, discipline, or terminate its employees. Nothing in this Consent Decree shall require the Company to violate any applicable law, ordinance or regulation.

IX. SENIOR OFFICIAL AND REGIONAL EEO MANAGERS

A. Within thirty (30) days of the Final Approval Date, and after consultation with Class Counsel, the Company shall appoint a senior-level Human Resources official ("Senior Official") to be responsible for internal monitoring of the Consent Decree provisions and providing annual monitoring reports to the outside monitor ("Diversity Monitor"). If Class Counsel disagrees with the appointment, Class Counsel may use the Dispute Resolution procedures set forth in Section XX.

B. The Senior Official will report directly to the CEO and the Executive Committee of the Board of Directors.

C. The Company will also appoint three regional Human Resources Managers to assist the Senior Official with processing employee complaints arising from units within their respective regions, regional recruitment efforts, regional diversity efforts, and any aspect of Consent Decree compliance, at the discretion of the Senior Official.

X. DIVERSITY MONITOR

A. The parties agree to appointment of Barry Goldstein as Diversity Monitor. In the event that Barry Goldstein becomes unavailable to serve as Diversity Monitor for any reason, Class Counsel and the Company will make a good faith effort to select on a joint basis a new Diversity Monitor. If Class Counsel and the Company are unable to reach agreement as to a successor Diversity Monitor within forty-five (45) days following the date Barry Goldstein becomes unavailable to serve as Diversity Monitor, the Court shall appoint a successor Diversity Monitor upon motion of Class Counsel or the Company. Class Counsel or the Company may nominate to the Court persons for consideration as a successor Diversity Monitor. Class Counsel and the Company shall each have the right to interview any nominated person, and to present argument and evidence to the Court regarding the selection of the successor Diversity Monitor.

XI. BENCHMARKS FOR JOB FILLS FOR FRONT OF THE HOUSE POSITIONS

A. Restaurant Benchmarks. Within 13 months after the Final Approval date, and every reporting period thereafter for the life of the decree, the Company shall, with respect to persons placed in Front of the House positions during the preceding reporting period, calculate for each restaurant, and report in its Progress Report (as defined in Section XVIII(D)), one "Restaurant Benchmark" for servers and cocktail servers, one "Restaurant Benchmark" for bartenders, and one "Restaurant Benchmark" for hosts, for the 12 month period following the Final Approval date, and for each reporting period thereafter.

The "Restaurant Benchmark" for each position in each restaurant will be the higher of "Applicant Flow" or "Expected Representation of African Americans in the Labor Market."

1. Applicant Flow. Applicant Flow means the percentage of all individuals who applied for the specified position in the specified restaurant during the 12 months being measured who are African American. Applicant Flow shall be calculated as follows: The Company shall separately calculate Applicant Flow, for each restaurant, for each of the following positions a) waiter/waitress/server/cocktail server, b) bartender, and c) host, as follows: Calculate the number of applicants who applied for the specified position during the 12 month period under review. The number of applicants for each position shall include all individuals who applied for that position and also who applied for that position plus other positions with the Company. The number of applicants for each position shall not include individuals whose applications fail to identify their race, or state more than one race but do not specify the races. Out of the total number of applicants for each position (as defined in subsection a, above), calculate the number and percentage who identified themselves on the applications as African American or Black, or who identified as more than one race and at least one race identified is African American or Black, or, if the Company modifies the racial categories on its application form to track the 2000 census codes, African American or Black means individuals falling within census codes for Black non-Hispanic, plus Black and White non-Hispanic, plus Black and American Indian Alaskan Native. This percentage is the "Applicant Flow" for the specified position in the specified restaurant.

2. Expected Representation of African Americans in the Labor Market. The Company shall separately calculate Expected Representation of African Americans in the Labor Market, for each restaurant, for each of the following positions a) waiter/waitress/server/cocktail server, b) bartender, and c) host, as follows:

a. Calculate, for each restaurant and each position, the percentage of individuals within the "Relevant Geographical Area" who fall within the "Relevant Census Occupations Code" who are African American or Black, based on Census 2000 data. If, after 2010, but before the termination of the Decree, the Census Bureau completes and makes available an update of the "EEO Special File" containing data on occupations by race, the first set of such updated data shall be used for the calculation of benchmarks during the remainder of the term of the Decree. At no time, however, shall the Company be required to use any special EEO ...


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