Mongue v. The Wheatleigh Corporation

Court of Appeals for the First Circuit·Decided January 21, 2026·No. 24-1488·Published

Opinion

United States Court of Appeals For the First Circuit

No. 24-1488

ARLETA MONGUE, individually and on behalf of all other persons similarly situated,

Plaintiff, Appellee,

v.

THE WHEATLEIGH CORPORATION; L. LINFIELD SIMON;

SUSAN SIMON; MARC WILHELM,

Defendants, Appellants.

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Katherine A. Robertson, U.S. Magistrate Judge]

Before

Gelpí and Kayatta, Circuit Judges, and Smith,* District Judge.

Matthew P. Horvitz, with whom Goulston & Storrs PC was on brief, for appellants.

Jeffrey S. Morneau, with whom Connor & Morneau, LLP was on brief, for appellee.

January 21, 2026

* Of the District of Rhode Island, sitting by designation.

KAYATTA, Circuit Judge. This appeal stems from a series of lawsuits -- including a class action -- brought by former employees against the Wheatleigh Hotel and its owners and operators (collectively, "Wheatleigh"). Acting on behalf of several individual employees as well as a certified class of employees, a single lawyer negotiated with Wheatleigh a global settlement resolving all of the employees' unfair wage claims. Wheatleigh then tried to get out of the deal, claiming, among other things, that plaintiffs' counsel should not have been allowed to represent both a class and individual plaintiffs in making a settlement. As we will explain, we affirm the district court's rulings holding Wheatleigh to its deal.

I.

The Wheatleigh Hotel was a luxury hotel and resort located in Lenox, Massachusetts. On April 11, 2018, Mark Brown, a former guest services manager at the hotel, filed a lawsuit in the District of Massachusetts against the hotel's owner, the Wheatleigh Corporation; the corporation's president, treasurer, and director, L. Linfield Simon; its secretary and director, Susan Simon; and its general manager and director, Marc Wilhelm. Brown alleged that he was misclassified as exempt from overtime pay and was thus owed unpaid overtime wages under the Fair Labor Standards Act (FLSA). See 29 U.S.C. § 207. He also alleged that Wheatleigh failed to pay him a minimum wage during certain pay periods and

that it failed to pay his wages within the time periods required by Massachusetts law. Finally, Brown brought common-law quantum meruit claims for failure to compensate him for services rendered.

On June 20, 2018, another former Wheatleigh employee, Arleta Mongue, sued the same defendants, again in the District of Massachusetts. Mongue's first amended complaint alleged among other things (1) that she was paid less than minimum wage because Wheatleigh paid her a "service rate" of $5 per hour plus a cut of a tip pool, which was inappropriate because she often performed non-tip producing tasks and because the tip pool was unlawfully shared with non-wait staff employees and supervisors; (2) that she was not paid overtime she was owed; and (3) that she was not paid for time when she was required to work during her scheduled meal breaks. Mongue also alleged that Wheatleigh failed to provide her with specific information that an employer is required to share under the FLSA and Massachusetts law before it may pay tipped employees at a rate less than minimum wage.

Shortly after Mongue's initial complaint was filed, two more Wheatleigh employees came forward: Mary Harris and Christian Hamel, who both alleged they had been denied wages under the FLSA and Massachusetts law because they had been misclassified as overtime-exempt managers. Both filed suit against Wheatleigh in July 2018. In due course, Mongue also successfully secured the certification of a class under Rule 23(b)(3) on behalf of current

and former Wheatleigh employees on her state-law claims. In total, Wheatleigh faced four different cases: three individual cases (Brown, Harris, and Hamel) each claiming, among other things, that plaintiffs had been misclassified as overtime-exempt, and one class action (Mongue) asserting mismanagement of the hotel's tip pool and unlawful payment of the service wage rate. In all four cases, attorney Jeffrey Morneau and his firm, Connor & Morneau, LLP, represented the plaintiffs, including the class.

A few months after the magistrate judge certified Mongue's state-claims class,1 on December 22, 2021, Morneau sent an email to defense counsel Patrick Bannon providing a "revised demand for a global settlement of all pending cases." The email stated that "[t]he agreed upon total amount in full and final settlement is Five Hundred Eighty Thousand Dollars," and that this "Gross Settlement Fund" would be allocated as follows:

• $8,103 to Brown (1.5 times single damages)

• $11,961 to Harris (1.5 times single damages)

• $8,124 to Hamel (single damages)

• $5,000 to Mongue (individually, as a service award for being the class representative)

• $27,102 Class Tip Pool Violation ($9,034.00 x 3)

• $234,884.80 (CLASS other Violations)

• $284,825.20 (fees and costs to be allocated between the four cases as we choose)

1 The parties consented to proceed before a magistrate judge.

See 28 U.S.C. § 636(c); Fed. R. Civ. P. 73.

The email also stated that "[t]he only sum in addition to the [Gross Settlement Fund] that [Wheatleigh] shall be required to pay is the employer's share of payroll taxes on the Individual Settlement Payments . . . which are allocated to wages." And it noted that "Class Counsel may apply to the Court for an award of attorney[] fees and costs and expenses incurred in connection with the prosecution of the Litigation."

The next day, Bannon responded to Morneau by email. He stated that "[t]his email is to confirm that we've reached a global settlement on the terms stated in your email below, with two modifications." Those modifications were (1) to reduce the total Gross Settlement Fund to "$550K rather than $580K," and (2) to revert to Wheatleigh the value of any checks mailed to settlement class members that were not cashed, deposited, or otherwise negotiated by the applicable expiration date. Bannon also wrote to "make explicit three points that . . . [were] obvious and/or uncontroversial": (1) that any "award of attorney[] fees and costs and expenses" sought from the court would be paid out of the Gross Settlement Fund; (2) that Wheatleigh would get general releases from Brown, Harris, Hamel, Mongue, and may also, at its discretion, include a release of wage claims on settlement checks sent to class members such that endorsing the check constituted a release of wage claims; and (3) that all four lawsuits would be dismissed with prejudice. Bannon asked Morneau to "reply to confirm that we

have a deal on these terms." Later that day, Morneau replied, "Confirmed."

Neither party disputes the authenticity of these emails.

Nor do they dispute defense counsel's authority to settle the case on Wheatleigh's behalf.

Six days later, defense counsel emailed the court to confirm that all four cases against Wheatleigh had been resolved, that the parties in the individual cases would file joint motions for 45-day nisi orders, and that class counsel would follow up with the court after the New Year.2 On February 17, 2022, the parties filed a joint status report stating that they intended to file a motion for preliminary approval of a class-action settlement on or before March 4, 2022. After requesting an extension, on April 5, 2022, the parties jointly requested a status conference because of "obstacles" that had emerged in finalizing settlement of the four cases.

The magistrate judge held a status conference on April 20, 2022. Attorney Morneau identified the issue as Wheatleigh's refusal to "dismiss or settle the individual cases or the class case without . . . all of them being dismissed at the same time." Attorney Bannon, who represented Wheatleigh, stated

2 A nisi order or decree is "[a] court's decree that will become absolute unless the adversely affected party shows the court, within a specified time, why it should be set aside." Decree nisi, Black's Law Dictionary (12th ed. 2024).

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