Yelp gives $1.2 million to settle unpaid overtime suit

Yelp has reached a settlement with employees who accuse the review site of breaking state and federal wage laws.

In documents filed Friday in San Francisco, the company says it will put aside $ 1,250,000 to resolve claims from California and national sales staff.

The employees in question sold advertisements that appear on Yelp alongside reviews of restaurant and other local businesses.

Account executive Justin Larkin sued Yelp on behalf of other salespeople in March of 2011, saying the company wrongly classified them as exempt from overtime laws that require additional pay after 40 hours work.

Under the terms of the proposed deal, the company will pay a maximum of $ 586,667 to California employees and $ 293,333 to national employees, and also pick up the tab for court and attorney fees.

Daily deal site Groupon is facing a series of similar suits in Illinois over unpaid wages. Those cases are for now locked up in court.

The Yelp settlement, which must be approved by a judge, has yet to receive an online star rating. It was first noticed by Law360 (sub req’d). Here’s a copy:

Yelp Settlement Copy

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

  • NewNet Q4: Platform mania and social commerce shakeout
  • The future of mobile: a segment analysis by GigaOM Pro
  • Communications, Platforms, Privacy Ruled NewNet in Q4