Labor & Employment Law Daily Wrap Up, CLASS ACTIONS—SETTLEMENTS—W.D. Ky.: Papa John’s $5 million no-poach settlement granted final approval, (Aug 20, 2026)

By Justin Marcus Smith, J.D.

Arbitration agreements controlling about half the claims probably explained the “steep discount rate” of over 95% relative to the plaintiffs’ estimate of $195 million in class damages.

The federal district court in Louisville, Kentucky granted final approval of a $5 million settlement in the long-running no-poach litigation against pizza franchisor Papa John’s. Lingering concerns about typicality, adequacy, and predominance remained too attenuated to deny final approval. Only one of 14 objectors, out of a class comprising more than half a million, raised a relevant, substantive concern that the $5 million fund was “grossly inadequate,” but there was no support for a suggestion of collusion. The plaintiffs’ no-poach wage-suppression was no longer as novel as it was at the start of the litigation, but the parties were free to choose the risks they wanted to take, where the settlement was the only apparent path to recovery for about half of the class thanks to arbitration agreements. The court expressed some disapproval of the high allocation for costs relative to fees, but it found the overall 25% award eminently reasonable (In Re: Papa John’s Employee and Franchisee Employee Antitrust Litigation, No. 3:18-cv-00825-BJB-RSE (W.D. Ky. Aug. 14, 2026)).

Background. A year ago, the federal district court in Louisville preliminarily approved a class wide settlement resolving antitrust claims that Papa John’s International and Papa John’s USA imposed unlawful no-poach restrictions on employees. The preliminary approval followed the court’s earlier refusal to certify a settlement class when it found the record insufficient to establish typicality, adequacy, and predominance. In an amended motion, the class representative, an employee who worked at a Papa John’s restaurant subject to the alleged restrictions, provided additional information and supplemental filings that, in the court’s view, cleared the threshold for preliminary approval (see Antitrust, Aug. 8, 2025).

R. 23 requirements. Based on the parties’ earlier supplemental filings, concerns about typicality and adequacy under R. 23(a) and predominance under R. 23(b)(3) were not enough to find approval unlikely. A supplemental filing dispelled a typicality worry that a class representative who had been a store manager might have had a role in enforcing the no-poach agreements at issue in the litigation. It appeared that franchise owners, not store managers, would have enforced the no-poach agreements. Given the potential variance in the value of arbitrable and litigable claims, the class might have been better served by dividing into subclasses, but that did not defeat typicality because the arbitration defense is procedural. In the end, nothing warranted denying final approval.

The same dynamic meant there was little reason to worry about adequacy. The Sixth Circuit presumes a level of good faith from class representative and counsel. Nothing contravened that at the point of final approval. The court said the class “overwhelmingly embraced the settlement—managers and non-managers alike.” The store manager was apparently the only chance that class members who were subject to arbitration agreements had at recovery. Classwide arbitration was apparently unavailable, and individual arbitrations would be economically impractical.

There were also no new developments raising any questions about predominance. The plaintiffs were not necessarily correct on the common questions of substantive antitrust law, injury, and damages, but resolving those issues would have burned up a lot of additional litigation.

Objectors. A technical glitch prevented counsel from identifying every objector until shortly before the final approval hearing. A supplemental filing disclosed 14 objectors out of a class of more than half a million, but none of their objections cast doubt on the appropriateness or fairness of the settlement. Some complained they did not understand the settlement or that they wanted more money. Others complained of unrelated misconduct they allegedly experienced in the workplace or that they did not like class action lawyers. Only one objector raised relevant, substantive concerns that the $5 million fund was “grossly inadequate,” too much went to fees and costs, the release was overbroad, and the settlement might reflect collusion. The court said the last two concerns were meritless. Nothing suggested collusion, and the rest was supposition. The release was appropriately tailored. The size of the settlement and fund and proportion allocated to costs was reasonable, “if only just.”

Settlement terms. Two settlement features raised concerns, largely independent of objection, whether the classwide settlement was fair, reasonable, and adequate under R. 23(e)(2). The settlement reflected a “steep discount rate” of over 95% insofar as the plaintiffs’ uncontested expert report estimated $195 million in class damages. However, the no-poach wage-suppression theory here was untested at time of filing. The theory raised “difficult and novel questions of antitrust law.” Then again, the Seventh Circuit had since issued a pathfinding decision in Deslandes v. McDonald’s USA, LLC, 81 F.4th 699, 702 (7th Cir. 2023) (Easterbrook, J.). The plaintiffs’ theory was “far less novel today than when they filed.”

The court noted here how the lawyers reasoned that the settlement also involved non-economic relief of value to society, it stops future no-poach or no-hire provisions in any new franchise agreement for five years. Then again, the point of class litigation is redress. In the end, the settling parties had agency to exercise their own judgment about a small settlement that was one reasonable response to meaningful risks. The possibility of a better settlement did not mean the settlement presented was not fair, reasonable, or adequate. As already mentioned, a heavily discounted recovery was also the only apparent path to recovery for about half of the class thanks to their arbitration agreements, which would explain why only 14 out of a half million objected and only 34 opted out.

Fees and costs. The court noted the class action lawyers also got a “haircut” under the deal. The proposed lodestar value was $13 million, but the agreement set aside $1.25 million for fees and costs, and the lawyers asked for $357,778.81 in fees, and $892,221.19 in costs mostly attributable to experts and discovery, including “research” and “doc review.” The court said the allocation between fees and costs was “unusual to say the least” especially given that research and doc review are usually listed on the fees side. The court said “[t]his sort of Enron accounting might raise eyebrows in other contexts” but did not need to “scuttle” the settlement here. The expenses were privately bargained, the attorneys could pay their bills before their bonuses, and a 25% award was “eminently reasonable” within the repeatedly accepted range of 20 to 30 percent.

Service award. The $5,000 service award to the last standing class representative was “well-earned.” Without her early efforts, the case probably would not have reached settlement. The court said it had no reason to question the unopposed service award.

The Case is No. 3:18-cv-00825-BJB-RSE.

Judge: Beaton, B.

Attorneys: Christian Levis (Lowey Dannenberg PC) for Jamiah Greer. Buddy J. Vancleave (Quintairos, Prieto, Wood & Boyer, PA) for Papa John's International, Inc.

Companies: Papa John's International, Inc.

Cases: ClassActions Arbitration KentuckyNews