When did the parties participate in a voluntary mediation in the Torrez case involving Del Taco?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
itional $9.3 million. These amounts are included within "Accrued liabilities" on our consolidated balance sheet as of September 29, 2024. The Company will continue to accrue for post-judgment interest until the matter is resolved.
Torrez — In March 2014, a former Del Taco employee filed a purported Private Attorneys General Act claim and class action alleging various causes of action under California's labor, wage, and hour laws. The plaintiff generally alleges Del Taco did not appropriately provide meal and rest breaks and failed to pay wages and reimburse business expenses to its California non-exempt employees. On November 12, 2021, the court granted, in part, the plaintiff's motion for class certification. The parties participated in a voluntary mediation on May 24, 2022 and June 3, 2022. On June 4, 2022, we entered into a Settlement Memorandum of Understanding (the "Agreement") which obligates the Company to pay a gross settlement amount of $50.0 million, for which in exchange we will be released from all claims by the parties. On August 8, 2023, the court issued its final approval of
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 58)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, a former Del Taco employee filed a claim in March 2014 alleging violations of California labor laws. The parties involved in the Torrez case participated in a voluntary mediation on two separate dates: May 24, 2022, and June 3, 2022. Following these mediation sessions, on June 4, 2022, Del Taco entered into a Settlement Memorandum of Understanding, agreeing to pay a gross settlement amount of $50.0 million to resolve all claims. The court granted final approval of the settlement on August 8, 2023, and final judgment was entered the following day. Del Taco completed the settlement payments, and as of September 29, 2024, no further amounts were accrued on its consolidated balance sheet related to this case.
This information is relevant for prospective franchisees as it provides insight into the types of legal challenges Del Taco has faced and the associated costs. The $50.0 million settlement indicates the potential financial impact of labor-related lawsuits. While this specific case is resolved, it highlights the importance of adhering to labor laws and managing employee relations to avoid similar issues. Franchisees should be aware of the legal and financial risks associated with operating a business in California, particularly concerning wage and hour laws.
It is important to note that the resolution of the Torrez case does not guarantee that Del Taco will not face similar lawsuits in the future. Franchisees should consult with legal counsel to ensure they understand their obligations under California labor laws and implement policies and procedures to minimize the risk of litigation. Understanding these potential liabilities is a crucial part of assessing the overall financial viability and risk profile of a Del Taco franchise.