Our article on the growing trend of wage theft lawsuits against popular restaurant chains was published on the Huffington Post.
A Turkish bakery’s attempts to exclude its bakery workers from the protections of the Fair Labor Standards Act (“FLSA”) was rejected by Magistrate Judge Ramon Reyes. The workers in the lawsuit, filed by Pechman Law Group, made and served Turkish treats at Gulluoglu Baklava & Cafe locations in Brighton Beach and Astoria. Gulluoglu is well-known throughout Turkey for its baked goods. Although formally trained to make pastry and baklava, these bakers allege making little from scratch. They baked bread, served coffee, and performed other non-skilled tasks, but most of their work consisted of adding finishing touches to reheated baklava and cakes imported from abroad. Gulluoglu paid the bakers a fixed weekly salary, which the workers assert did not properly compensate hours worked over forty in a week. The bakers sued to recover unpaid overtime pay, as well as spread-of-hours pay as required under New York Labor Law.
Gulluoglu attempted to have the case dismissed by arguing that the bakers were creative professionals and therefore exempt from the FLSA’s overtime provisions. The creative professionals exemption specifically requires that an employee’s primary duty involve “invention, imagination, originality or talent.” In his Report to the district judge, Judge Reyes found that by reheating baklava and frosting pre-made cakes, the bakers did not use any of the creativity or originality envisioned by the exemption. Applying it here, the judge said, would “extend it to virtually every chef save those who work with pre-made food.” Even assuming that the exemption applied because the chefs made bread from scratch, Judge Reyes found no evidence that bread-making was their primary duty. Absent this evidence, the magistrate judge concluded that Gulluoglu had not proven any of their defenses.
Judge Reyes’s recommendation not to apply the exemption and allow the bakers to present their wage claims will be reviewed by the United States District Court Judge Dora L. Irizarry.
A little over one year after filing a wage and hour lawsuit against La Piccola Fontana, workers now sue the restaurant for retaliation. Located in Hilton’s San Juan Hotel and Casino in Carolina, Puerto Rico, La Piccola has a sister restaurant in the island’s Waldorf Astoria hotel, El Conquistador. In 2015, several waiters and bartenders brought suit on their behalf and other workers’ behalf in the federal court of Puerto Rico, alleging violations of federal and Puerto Rican minimum and overtime wage laws.
That complaint asserts that La Piccola improperly applied a tip credit against the waitstaff’s wages because it failed to notify waitstaff of the laws establishing the tip credit and imposed an invalid tip pool in which managers were incorrectly included. The Fair Labor Standards Act (“FLSA”) currently sets the minimum wage at $7.25, except for workers under 25 years of age who, for their first ninety days of work, can be paid as little as $4.25 under the new law called PROMESA (the Puerto Rico Oversight, Management, and Economic Stability Act). If properly claiming the tip credit, an employer must pay tipped workers at least $2.13 an hour.
According to the most recent complaint, La Piccola later closed for renovations in late 2016, promising the waitstaff suing the restaurant that they would be able to continue their jobs once renovations completed. Those workers say that they were not called back to work when La Piccola reopened in 2017. They claim that the restaurant refused to continue employing them in retaliation for complaining about their unpaid wages, in violation of the FLSA, the Puerto Rico Unjust Dismissal Act, and Puerto Rico Retaliation Act. The suit seeks over $1 million in damages for economic and mental suffering alone. The workers’ original claims could not be resolved at mediation and are now proceeding to trial.
Hamden Town House Restaurant in Hamden, Connecticut has been sued for wage pay violations by workers, employed at the diner as dishwashers, busboys, prep cooks, and cooks. Attorneys for the workers claim the diner required the workers to work between 53 and 72 hours every week and paid them a salary which resulted in hourly pay rates as low as $3.14 per hour, well below the minimum wage. They also allege the diner never paid them any overtime premium for weekly hours worked over 40. The workers also claim they were not given rest breaks despite consistently working 11 or 12-hour shifts, and that they had to work as many as eight straight hours before they could take a lunch break.
According to the lawsuit, the Connecticut diner paid the workers in cash, without any receipts or use of a time keeping system. The workers claim they were required to sign a book each week that inaccurately listed their hours and pay. The owners consistently either reduced the number of hours they worked, or falsely recorded their pay as higher than it really was. If they refused to sign off on the information in the book, they were paid nothing at all. Also, according to one worker, the owners periodically deducted approximately twenty dollars from his pay without explanation.
Connecticut’s current minimum wage is $9.60 per hour. The tipped minimum wage is currently $6.38 per hour for tipped workers (or $8.23 per hour for bartenders). The Connecticut Department of Labor also requires employers to pay employees a rate of at least one and a half times their regular rate of pay for all hours worked over 40. Further, employers in Connecticut must keep accurate wage records for all employees. Tipped workers in Connecticut must also sign weekly tip credit statements confirming that they are aware of the tipped minimum wage regulations in Connecticut and that they received a sufficient amount of payment via tips to be eligible for the tip credit.
Pechman Law Group recently settled a wage payment case against Maine Fish Market in East Windsor, Connecticut for $750,000. In that case, the workers alleged that the restaurant failed to give its servers and bartenders tip credit statements as required by Connecticut law, required them to pay for breakages, customer walkouts, and uniforms, and took ten to fifteen percent of each servers’ tips on a daily basis to pay other employees’ wages.
A former restaurant worker at three of David Bouley’s New York City restaurants and event spaces claims the world-famous Bouley institutions failed to pay tipped restaurant employees minimum wage and overtime pay in violation of the Fair Labor Standards Act (“FLSA”) and the New York Labor Law.
The worker, who was employed as a runner at Bouley Restaurant, Bouley Test Kitchen, and Bouley Botanical from June 2010 to September 2016, also alleges that the restaurants required workers to pay to clean and maintain their uniforms out of their own pockets, and failed to provide workers with a pay notice or accurate wage statements, in violation of the New York Labor Law.
In the collective and class action lawsuit, filed in federal court in the Southern District of New York, the runner asserts that the Bouley restaurants paid tipped employees, including captains, servers, front waiters, assistants, bussers, runners, and baristas at the tipped minimum wage, currently $7.50 in per hour in New York, while requiring them to share their tips with non-service employees. Specifically, the runner claims the Bouley restaurants permitted expediters, who are back of house employees with little to no direct customer interaction, to participate in the tip pool. He also says the restaurant never gave the tipped workers notice of its intent to use the tip credit provision.
According to the FLSA, employers can take a “tip credit” and pay tipped employees below the federal minimum wage. The United States Department of Labor regulations provide, however, that a restaurant will not qualify for the “tip credit” when tipped employees share tips with non-tipped workers who do not customarily and regularly receive tips, or when tipped workers do not receive notice of an employer’s intent to claim the tip credit.
An Arby’s fast food restaurant in Vero Beach, Florida cheated workers out of overtime pay, according to a lawsuit filed by a former cashier at the restaurant. Attorneys for the employee claim that Arby’s paid workers at the restaurant straight-time wages for all hours worked, including hours worked over forty per workweek, in violation of the Fair Labor Standards Act (FLSA).
The primary duties of the worker who brought the lawsuit consisted of tasks such as serving as cashier, assisting customers with their orders, food preparation and cleaning. She regularly worked approximately 55 hours per week, but Arby’s failed to pay her time and one-half her regular rate of $9 per hour for all hours worked over forty. Instead, they paid her a straight-time wage of $9 for hours over 40 in a week. Attorneys for the workers are seeking to recover unpaid overtime wages for the workers at the restaurant, liquidated damages, and attorneys’ fees.
Fast food restaurants across the country have been hit with overtime lawsuits because they either pay employees a weekly salary, pay shift pay, or pay hours worked after 40 on a straight-time basis. For example, the United States Department of Labor (DOL) found that Subway restaurants throughout the United States committed wage violations in more than 1,100 investigations over the period from 2000 to 2013. Combined, these investigations led to Subway franchisees reimbursing Subway workers more than $3.8 million. According to CNN, after Subway, the next most frequent wage violators in the fast food industry are McDonald’s and Dunkin’ Donuts.
Pechman Law Group recently settled overtime cases for a worker at a 7-Eleven on Long Island for $60,000, two restaurant workers at Oaxaca Taqueria Restaurants in Manhattan for $82,500, and a Dunkin’ Donuts worker in Queens for $30,000. Under the FLSA, employees must receive overtime pay for hours worked over 40 in a workweek at a rate of at least one and a half times their regular rate of pay.
New York State Red Robin Restaurants have agreed to pay $900,000 to current and former servers to settle claims for tip splitting violations and violating the 80/20 rule.
The Red Robin Restaurants required their servers to share tips with expediters, even though expediters had little to no direct interaction with customers. Expediters do not customarily and regularly receive tips. The restaurants took a tip credit to pay the waitresses, waiters, and bussers a tipped minimum wage. Under the Fair Labor Standards Act (“FLSA”) and New York Labor Law (“NYLL”), however, employers lose the privilege of paying workers a tipped minimum wage when they require tip sharing with workers who are not entitled to tips, such as expediters or other back of house workers.
The servers also allege they spent more than twenty percent of their shifts performing side work, including cleaning, preparing food, refilling condiments, and stocking and replenishing the bar and food stations. Under the FLSA and NYLL, employers are allowed to take a “tip credit” and pay waiters, bussers, and bartenders below the federal minimum wage. The United States Department of Labor regulations provide, however, that a restaurant will not qualify for the “tip credit” for employees that spend more than 20% of their time performing non-tipped work.
The $900,000 settlement was preliminarily approved by Gary R. Brown, a federal magistrate judge in New York. The settlement includes all 16 Red Robin Restaurants located throughout New York State and covers 2,153 servers who worked at any New York Red Robin from January 20, 2010 to December 31, 2016. A fairness hearing in the case is scheduled for June 2017.
The settlement fund will be distributed among current and former New York State Red Robin servers based on the number of tipped hours they worked during the period January 20, 2010 to December 31, 2016. Red Robin settled a similar wage theft lawsuit with Pennsylvania restaurant workers in 2016 for $1.3 Million.
The Jue Lan Club, the trendy Hamptons restaurant, nightclub and art gallery that made headlines for offering a $27,000 bottle of Dom Perignon Rose*, cheated workers out of the minimum wage, overtime pay and tips according to a class action lawsuit filed in New York federal court.
Attorneys for the workers claim that the Jue Lan Club and Stratis Morfogen, its principal owner, failed to pay its servers overtime pay of one-and-one-half times their hourly rate for all weekly hours worked over forty, even though waiters worked 60+ hours a week. The lawsuit further alleges that Jue Lan unlawfully required its waiters, bussers, and bartenders to give a portion of their tips to managers and back of the house staff, including dishwashers.
Restaurant workers in Long Island are reminded that beginning in 2017, their employers must pay them at least $10.00 per hour worked. An exception to this rule exists for tipped food service employees in restaurants, such as bartenders, servers, and bussers, who can be paid $7.50 per hour as long as the restaurant gives them proper notice of the “tip credit” laws. To do so, the restaurant must provide them with a written notice explaining, among other things, that tipped employees make at least $2.50 per hour in tips. The notice must also state that if the tipped employees failed to make at least $2.50 in tips per hour worked in a workweek, the restaurant will pay them the difference between the amounts that they actually made in tips per hour and the required minimum of $2.50. Moreover, all restaurant employees who work over forty hours per workweek must be paid one and one-half times their regularly hourly wage rates per hour worked over forty. The minimum overtime wage rate in Long Island is $15.00. Once again, tipped employees’ rates can be lower as long as the restaurant complied with the notice requirements explained above. Tipped employees who work more than forty hours per workweek must be paid at least $12.50 per hour worked over forty.
Serafina, an Italian restaurant chain operating eleven restaurants in New York State, allegedly failed to pay kitchen workers overtime pay for all weekly hours worked over forty, spread-of-hours pay, and other wages. The kitchen workers, including cooks, non-executive chefs, sous-chefs, porters, and dishwashers, claim that Serafina required them to regularly work more than forty hours each week but did not pay them time-and-a-half for all of their hours over forty. The kitchen workers say that the restaurant paid some workers a fixed salary regardless of the number of hours they actually worked. For example, one sous-chef was paid $1,100 per week for working up to eighty-four hours a week.
The lawsuit claims that while Serafina did pay some kitchen workers hourly wages, the restaurant shaved their overtime hours. For example, a cook alleges that Serafina only paid him for forty-eight hours of work each week, despite actually working sixty hours a week. The workers claim that Serafina paid all kitchen workers for fewer overtime hours than they actually worked each week due to time shaving. The workers further allege they were never given wage notices required under the New York Labor Law and that their paystubs contained inaccurate information concerning their hours worked.
Serafina previously agreed to settle another wage theft lawsuit with former servers, runners, bartenders, bussers, and baristas for $1.275 million.
New York Attorney General Eric T. Schneiderman announced settlements with three Domino’s Pizza franchisees, totaling $480,000 in restitution to hundreds of workers subject to wage and labor violations at ten different franchise locations. The Attorney General filed a lawsuit in May 2016 against these three franchisees and their franchisor Domino’s Pizza, Inc., Domino’s Pizza LLC, and Domino’s Pizza Franchising LLC (collectively, “Domino’s”) seeking restitution from Domino’s and its franchisees for a number of alleged violations, including violations against minimum wage, overtime, and other basic labor law protections.
As part of the settlement agreements for the wage theft violations, the three franchisees will be dismissed from the lawsuit, and only the franchise Domino’s remains as a defendant. The Attorney General has now settled investigations into labor law violations at 71 Domino’s franchise locations in New York State, owned by fifteen individual franchisees. These locations comprise more than half of the franchise stores and over a third of the total number of Domino’s stores in New York. The Attorney General’s office has secured nearly $2 million in total restitution for Domino’s workers statewide through these settlements.
“In the past three years, my office’s investigations have revealed a consistent and outrageous record of disregard for workers’ rights by franchisees, and as we allege, with the full knowledge of Domino’s Pizza,” Attorney General Schneiderman said. “My office will continue with our lawsuit against Domino’s Pizza to end the systemic violations of workers’ rights that have occurred in franchises across the State. We will not allow businesses to turn a blind eye to blatant violations that are cheating hard working New Yorkers out of a fair day’s pay.”
Eight of the stores involved in the settlements announced today were owned jointly by Shueb Ahmed and Anthony Maestri, with locations in New York, Nassau and Westchester Counties. Two of the stores were owned by Matthew Denman and located in Montgomery County. Shueb Ahmed will pay $150,000 in restitution to workers, Matthew Denman will pay $90,000 and Anthony Maestri will pay $240,000.
In the continuing lawsuit against Domino’s, the Attorney General has asserted that Domino’s was heavily involved in the employment practices of the three franchisees and, as a result, is a joint employer of the workers at the franchisees’ stores and is responsible for underpaid wages to these workers. The Attorney General has also alleged that Domino’s encouraged franchisees to use payroll reports from the company’s computer system (called “PULSE”), even though Domino’s knew for years that PULSE under-calculated gross wages. Domino’s typically made multiple updates to PULSE each year, but decided not to fix the flaws that caused underpayments to workers or tell franchisees about the flaws, deeming it a “low priority.”