Denny’s Settles Suit Over Wages

Denny’s Corp. said Tuesday that it had agreed to pay $7.75 million to former California employees to settle a lawsuit that alleged that the restaurant chain failed to pay them for unused vacation time.

The company, based in Spartanburg, S.C., was sued by the California Department of Industrial Relations in September 2002 over alleged violations of state law regarding payment of accrued vacation upon termination of employment.

Denny’s will pay installments of $3.5 million on Nov. 30 and about $4.25 million on Jan. 6, the company said in a filing with the Securities and Exchange Commission. The filing did not specify the number of former employees affected.

Denny’s, which had reserved $3 million in the case, said the settlement would reduce third-quarter earnings by $4.75 million.

Denny’s operates nearly 1,600 family restaurants worldwide. Its shares fell 14 cents to $4.07.