The Biggest Scandal To Hit Steak 'N Shake

In the restaurant world, businesses are quite lucky if they never face a scandal of some sort. You may have heard of the McDonald's hot coffee incident, where a 79-year-old woman sued — and won — due to severe burns caused by a cup of hot coffee (via The Poole Law Group). Or the time John Schnatter of Papa John's used a racial slur on a conference call, leading to his resignation, per Forbes. One scandal took place in Europe when traces of horse meat were found in Burger King's patties, according to USA Today. The patties were purchased from an Irish meat supplier called Silvercrest Foods. After this breakthrough, Burger King dropped the supplier and discontinued the use of its meat.

Some scandals can't exactly be avoided, though most more than likely can. In 2019, Steak 'N Shake was under fire for a very avoidable offense that led to the company paying millions of dollars.

No dime for overtime

In 2019, Steak 'N Shake was brought before a Missouri court and charged with not paying overtime to 286 managers, according to Restaurant Business Online. The St. Louis managers were forced to work more than 50 hours a week without overtime pay, prompting the court to order Steak 'N Shake's payment of $7.7 million in damages. Of that, $6 million plus court fees went directly to the managers.

The company was already in the process of closing stores, and following the trial, the closures only became worse. According to The Urban Baker, 82 restaurants shut down in 2020, and during the first quarter, the business recorded a loss of $7.9 million. If you think that's a lot, the previous year's loss was $13.3 million. Despite the closures, more than 550 Steak 'N Shake locations still remain across 28 different states. Dive into the untold truth of Steak 'N Shake to learn more about the restaurant.