A U.S. Department of Labor investigation, determined that ThunderCloud Subs, stiffed its employees out of minimum wages and overtime compensation for all hours worked over 40 in a given workweek. ThunderCloud Subs is a restaurant chain operating 30 locations and combined employing approximately 480 workers. The investigation revealed the wage violations occurred throughout several locations in the Austin, Texas area. As a result, Cumulus Inc. paid $83,617 in back wages and damages to 324 Austin restaurant workers, while ThunderCloud Inc. paid $44,250 to 229 employees.
The Department of Labor investigation revealed that ThunderCloud Subs failed to pay employees for all the hours they worked, allowing employees to work off the clock but paying only for scheduled hours, not hours actually worked. Other violations include failing to pay employees time and one-half for overtime hours worked, failing to pay overtime to several managers who did not meet the requirements for any exemption from overtime, and failing to keep accurate records of weekly hours worked by nonexempt employees.
Betty Campbell, regional administrator for the Department of Labor stated, “Employers like ThunderCloud Subs have a responsibility to know and follow the law. The U.S. Department of Labor will continue to vigorously enforce the law, and educate employers to ensure proper wages are paid. Companies who violate the law must not gain a competitive advantage over employers that play by the rules.”
Four Philadelphia restaurants have been hit with wage theft lawsuits. The lawsuits allege overtime and pay violations against La Casa de tu Madre (previously known as Growler’s), The King’s Corner Pub, The Drake Tavern, and Prime Time Beef and Ale.
In the lawsuit against La Casa de tu Madre, a former Pastry Chef/Sous Chef claims that he generally worked 50 hours in a given workweek but was not paid overtime for hours worked. Instead, La Casa de tu Madre paid him the same $600 weekly salary for all of his hours worked. Restaurant workers are required to be paid time and a half for all hours worked over 40 in a week. Paying employees on a salary deprives workers of their overtime pay.
The lawsuit against The King’s Corner Pub, The Drake Tavern and Prime Time Beef and Ale alleges that each of the three restaurants failed to pay any overtime wages for hours worked over 40 per workweek to any of their overtime-eligible employees. A former dishwasher filed the case, alleging that despite typically working 45-50 hours per week, the restaurants failed to pay overtime wages to their kitchen workers.
Jacky’s Waterplace & Sushi Bar a restaurant located in Providence, Rhode Island, and its owner Kin Wah Ko, will pay $567,000 in back wages to 104 employees for failure to pay them the minimum wage and overtime pay, amongst other damages. A U.S. Department of Labor investigation found that Jacky’s neglected to pay the federal minimum wage to its servers, bartenders, cooks, bussers, and dishwashers, and did not pay any overtime to employees working more than 40 hours in a given workweek. In addition, Jacky’s required its servers and bartenders to pay for breakages, customer walkouts and ordering errors out of their tips, reducing their pay to below the federal minimum wage. The restaurant also took a set percentage of servers’ and bartenders’ tips to pay its other employees and required employees to work without pay at charity events.
In addition to the monetary damages, Kin Wah Ko is responsible for creating a system to ensure all businesses he owns comply with the Fair Labor Standards Act in the future. He will also pay a $50,000 civil penalty to the Labor Department. The investigation and penalties follow a previous investigation against Jacky’s in which the restaurant paid a total of $80,350 in back wages to 25 employees at other locations.
Don Epifano, the Department of Labor’s Assistant District Director in Providence said, “The resolution of this case sends a clear message – we will continue to use every enforcement tool available to ensure workers take home every penny they have rightfully earned.”
Tip pooling was the topic of a recent Law 360 article that discussed the legal challenges the U.S. Department of Labor’s tip pooling rule could face. The tip pooling rule bars restaurants from requiring their wait staff to share tips with employees in the back of the house. The rule might be revisited in the wake of a new administration. Louis Pechman, founder of waiterpay.com was quoted in the article discussing tip splitting by front and back of the house workers.
Bayou City Wings, a Houston-based restaurant chain, has unlawfully engaged in a pattern or practice of intentional age discrimination in its hiring of host and wait staff, according to a lawsuit filed by the U.S. Equal Employment Opportunity Commission (EEOC).
EEOC’s lawsuit said that since at least 2008, Bayou City Wings has been discriminating against a class of applicants for “front of house” positions, such as food servers and hosts, by failing to hire them because of their age (40 years and older). According to EEOC’s lawsuit, Bayou City Wings’ upper management instructed other managers not to recruit and hire older job seekers and disciplined and terminated a manager who refused to comply. The agency also charged that since at least 2008 to about November 2013, the company failed to preserve employment records, including the job applications of unsuccessful applicants, in violation of federal law.
Age discrimination, as well as the failure to preserve proper job application records, violates the Age Discrimination in Employment Act (ADEA).
EEOC filed the lawsuit (Civil Action No. 4:16-cv-03245) in U.S. District Court for the Southern District of Texas (Houston Division), after first attempting to reach a pre-litigation settlement through its conciliation process. EEOC seeks, among other things, monetary relief for applicants denied employment because of their age; the adoption of policies and procedures to remedy and prevent age discrimination; and training on discrimination for all Bayou City Wings managers and human resources staff.
“Sadly, age discrimination continues to be an employment barrier for many Americans,” said Rayford O. Irvin, district director of EEOC’s Houston office. “Denying jobs to qualified applicants who are over 40 because of their age is unlawful, yet older job applicants often do not know they are victims of this unlawful discrimination.”
Waverly Restaurant, a diner in New York City’s West Village, was found guilty of retaliation against former workers in a decision by Judge Steven Davis of the National Labor Relations Board. After a three-day trial, Judge Davis found that the restaurant reduced worker hours because they had filed a federal court wage theft lawsuit against the restaurant for overtime, minimum wage, and other violations. The Judge also found that management had pressured waiters, delivery workers and bussers involved in the FLSA lawsuit to drop the suit. The restaurant workers were represented at the trial by Vivianna Morales and Louis Pechman, founder of waiterpay.com.
Two Johnny Rockets restaurants in the Washington, D.C. metropolitan area will pay 55 servers $571,460 for unpaid minimum wages, overtime and other damages. The judgment follows a Department of Labor investigation, which revealed that the restaurants required its servers to contribute a portion of their total tips back to the restaurant. Johnny Rockets then unlawfully distributed the servers’ tips to cooks and dishwashers. In addition, Johnny Rockets failed to pay the servers required overtime wages when they worked more than 40 hours in a week, and did not keep accurate records of all hours worked by employees.
Many restaurants require servers to pool their tips for workers to share equally. A valid tip pool may not include employees who do not receive tips customarily and regularly, such as dishwashers, cooks, chefs and janitors. When an employer utilizes employees’ tips for any purpose other than a valid tip pool, as was the case at Johnny Rockets, it is a violation of the tip credit provision of the FLSA. As a result, no tip credit may be claimed, and the employees are entitled to receive the full cash minimum wage on a retroactive basis, as well as a return of the tips that were misappropriated.
Chili’s policy of requiring servers to share their tips with expediters has been challenged in a federal court class action lawsuit. According to the wage theft lawsuit, Chili’s locations in New Jersey, Delaware, Indiana, Michigan and Ohio forced their servers to split tips with expediters. Expediters are individuals who generally work at or near the kitchen area traying food orders for pick-up by servers and who do not interact with restaurant customers.
The lawsuit alleges that Chili’s forces waiters and waitresses who regularly take orders and actually serve the restaurant’s customers to share their earned tips in a pool with expediters who do not interact with the customers at all. As a result, a percentage of the tips customers leave intended for their servers end up in the hands of the food expediters with whom customers neither communicate nor likely ever see.
The lawsuit claims this illegal tip sharing policy was uniformly applied throughout the forty-six Chili’s locations owned and operated by Quality Dining, Inc. The workers claim that as a result of this company wide policy, the restaurant has forfeited its right to take a tip credit under the Fair Labor Standards Act.
Delivery workers at Benares and Baluchi’s Indian restaurants in New York City were not paid minimum and overtime wages, and also were cheated out of the hours that they worked, according to a wage theft lawsuit filed in Manhattan federal court. The lawsuit claims that Benares and Baluchi’s purposefully failed to keep track of the delivery workers’ hours, and that the delivery workers were paid a fixed daily salary ranging from $16 per day to $50 per day, regardless of the number of hours they actually worked.
The delivery workers claim that the restaurant failed to provide them with any notice that tips they earned would count towards their wages. In addition, the restaurants unlawfully required their delivery workers use their own money to purchase “tools of the trade,” such as bikes, helmets, lights, and bike chains. The lawsuit also claims the restaurants regularly required delivery workers to continue working without pay for at least an hour after their scheduled stop time.
Jack in the Box has misclassified its store managers as overtime ineligible in order to cut its overtime pay obligations, according to a lawsuit filed in California federal court. The lawsuit claims that Jack in the Box, through a central business policy, requires its store managers to cover many work tasks of their subordinate employees. These assignments include working the drive-thru and the fryer, preparing food, cleaning up, and unloading products, as well as other like jobs. The store managers claim that despite performing these overtime pay eligible tasks, Jack in the Box mischaracterized them as ineligible for OT pay and has not paid them what they are owed. The lawsuit alleges that as result of this system, store managers were also regularly prevented from taking meal and rest breaks because they were assigned too much work and given no relief.
Jack in the Box allegedly paid its store managers a fixed salary amount that ultimately ended up being less than the minimum wage. Further, the store managers claim they were denied overtime pay although they “regularly” worked more than eight hours in a day or 40 hours in a workweek. They also claim that Jack in the Box did not reimburse them expenses for necessary travel costs in moving products between restaurants, and that they are not paid their fully owed wages upon the termination of their employment.