Hostesses

TGI Friday’s Settles Wage Theft Case for $19.1 Million

TGI Friday's Wage theft lawsuit

A nationwide wage theft lawsuit against TGI Friday’s has been settled for $19.1 million according to a court filing by the workers’ attorneys in New York federal court. The settlement, which covers 28,000 restaurant workers, is a record amount for resolution of a wage theft lawsuit in the restaurant industry. This settlement is the latest example of fast casual restaurants across the United States paying out millions of dollars on wage theft cases.

The lawsuit alleged that TGI Friday’s failed to pay its tipped hourly food service workers the proper minimum wage, overtime pay, and misappropriated tips. Attorneys for the servers, bussers, runners, bartenders, barbacks and hosts, claimed that TGI Friday’s failed to satisfy the strict requirements under the Fair Labor Standards Act (“FLSA”) and the New York Labor Law (“NYLL”) that would allow them to pay a reduced minimum wage rate to tipped employees. In particular, TGI Friday’s had a policy and practice that required tipped employees to spend over two hours and/or in excess of 20% of their work shift performing non-tip producing “side work.” Side work included, general cleaning of the restaurant, preparing food in bulk for customers, cutting produce, refilling condiments, and stocking and replenishing the bar and service areas. According to attorneys for the workers, this practice violated the “80/20 rule” and TGI Friday’s should have paid the tipped employees the full minimum wage rate, rather than reduced tipped minimum wage rate.

The front of the house workers also alleged that TGI Friday’s required them to perform “off the clock” work for which they were never compensated. “Off the clock” work consisted of requiring them to arrive at the restaurant one hour before customer service to perform side work, requiring them to punch in after they got their first table, and punch out before they performed closing side work. As a result of these practices, workers were not compensated for all the hours they worked and when they worked over forty hours per workweek, they were not paid overtime pay. Furthermore, the lawsuit claimed that TGI Friday’s required tips to be distributed to employees who are not entitled to tips under the FLSA and/or NYLL such as, silverware rollers and expeditors. Additionally, workers were given only one uniform, which TGI Friday’s failed to launder or pay workers the statutory uniform allowance. Finally, TGI Friday’s was accused of making unlawful deductions from employee wages for customer walkouts.

If approved, the settlement would resolve a nationwide class action brought by more than a dozen workers, alleging violations of the FLSA and claims brought under the labor or unfair competition laws of nine states: California, Colorado, Connecticut, Florida, Illinois, Maryland, Michigan, New Jersey and New York.

 

“Best Restaurant in America” To Pay $2 million to Settle Tip Theft Lawsuit

Blue HIll tip theft lawsuit

Dan Barber’s Blue Hill restaurant has agreed to pay its waitstaff $2 million to settle an unpaid wages and tip theft  lawsuit.

Recognized by Eater as the Best Restaurant in America for its locally-sourced farm-to-table cuisine, Blue Hill at Stone Barn and its sister restaurant in Manhattan was sued by two former servers in 2016 on behalf of themselves and all servers, bussers, bartenders, runners, and hosts and hostesses.  In their lawsuit, the servers claimed that Blue Hill required them to share their tips with expeditors, who were kitchen employees that did not interact with the restaurant’s customers.  The servers argued that this tip pooling system was unlawful.  Under the law, waitstaff should not be required to share their tips with restaurant employees who do not interact with customers, such as kitchen employees.

Attorneys for the workers also claimed that whenever there was a private event or banquet at Blue Hill, the restaurant led customers to believe that the “service” or “administrative” fee that they paid was a tip that would be distributed to the waitstaff.  According to the servers, Blue Hill unlawfully pocketed all service charges that customers paid, even though those amounts should have been given to the waitstaff as tips.

The wage theft lawsuit claimed that Blue Hill did not pay them minimum wages, as required under New York State law.  Because Blue Hill required the waitstaff to share tips with kitchen employees, like expeditors, in an unlawful tip pool, the restaurant could not pay waitstaff at a reduced minimum wage rate and take a tip credit.  Normally, if a restaurant meets several legal requirements, it may pay employees who regularly receive tips at a reduced hourly wage rate.  The restaurant loses this privilege if it pockets any part of the waitstaff’s tips or creates an unlawful tip pool.  For this reason, the servers claimed that they were owed the difference between the reduced hourly rates they were paid and the full minimum wage rates in New York.

Since the settlement, Blue Hill has eliminated tipping at its restaurants, a growing trend among New York restaurants.

 

EEOC Sues Ruby Tuesday For Age Discrimination

Ruby Tuesday EEOC age discrimination

Ruby Tuesday, a national casual dining restaurant chain, violated federal law by refusing to hire a qualified applicant at its Boca Raton, Fla., location because of his age, the U.S. Equal Employment Opportunity Commission (EEOC) charged in a lawsuit filed in federal court in Florida.

According to the EEOC’s lawsuit, the restaurant declined to hire a qualified applicant with over 20 years of experience in the food and beverage industry for a general manager position at its Boca Raton restaurant. In response to an inquiry by the applicant as to why Ruby Tuesday declined to hire him, the company informed him it was seeking a candidate who could “maximize longevity.”  According to the lawsuit, the applicant was 59 when he applied for the job, and the individual who got the job was 17 years younger.  Attorneys for the EEOC contend that the failure to hire the applicant violated the Age Discrimination in Employment Act.

A spokesman for the EEOC said, “Age cannot be a factor in whether or not someone can earn a living.  The Age Discrimination in Employment Act was put in place precisely to protect people against this type of conduct. The bustling hospitality industry needs to be reflective of all of the members of our community.”

In 2013, Ruby Tuesday paid $575,000 to resolve another age discrimination lawsuit brought by the EEOC on behalf of older restaurant workers in Western Pennsylvania and Ohio.

Opening A Restaurant in New York: Legal Issue Boot Camp

New York City Bar Association Logo

The New York City Bar Association will hold the CLE program “Opening A Restaurant in New York: Legal Issue Boot Camp” on March 24. The program will focus on the corporate, real estate, liquor license, and labor/employment issues involved in opening a restaurant in New York City. Speakers on the panel include Jack Gordon, partner at Kent, Beatty & Gordon LLP; Carolyn Richmond, partner at Fox Rothschild LLP; Sonal Shah, General Counsel of Ark Restaurant Group; Alex Victor, partner at Davidoff, Hutcher & Citron LLP; and Larry A. Welch, Associate at Golenbock Eiseman Assor Bell & Peskoe LLP.  Lou Pechman will be chairing the event. For more information on the program please visit the event page.

Restaurant Workers Get 2017 Pay Hike

back of house cooks

On December 31, 2016, restaurant workers throughout New York State will begin to see changes in the payment structure of their wages.
Back of the House Workers

 

Back of the house workers (cooks, dishwashers, stockers, and others without direct customer contact) will receive an increase from the current minimum wage rate of $9.00/hour beginning December 31, 2016, according to the following specifications:

New York City – Large Employers (with 11 or more employees): $11.00
New York City – Small Employers (with 10 or fewer employees): $10.50
Long Island & Westchester: $10.00
Remainder of New York State: $9.70

 

Front of the House Workers

 

New York State law allows employers in all industries, except building service and fast food, to satisfy payment of the minimum wage by combining a “cash wage” paid by the employer with a credit or allowance for tips that the employee receives from customers. For example, employers in the Hospitality Industry could satisfy the 2016 minimum wage of $9.00 by combining a cash wage of at least $7.50 with a tip allowance of no less than $1.50 per hour. Employers need only pay a cash wage of $7.50/hour to workers, so long as the employees receive at least $1.50/hour from customers in tips.

 

Beginning on December 31, 2016, tipped front of the house restaurant workers (servers, bussers, bartenders, hosts, hostesses, and others with direct customer contact) will still be required to receive the same 2016 minimum hourly wage rate of $7.50/hour from their employers. However, as of December 31, 2016, tipped restaurant workers must receive at least the following amount in tips per hour in order for employers to use the tip credit:

 

New York City – Large Employers (with 11 or more employees): $3.50
New York City – Small Employers (with 10 or fewer employees): $3.00
Long Island & Westchester: $2.50
Remainder of New York State: $2.20

 


Fast Food Workers

 

Additionally, restaurant workers in the fast food industry will see an increase in hourly wage rates. Employees who qualify for this increase include any person working at a fast food establishment whose job duties include at least one of the following: customer service, cooking, food or drink preparation, delivery, security, stocking supplies or equipment, cleaning, or routine maintenance.

 

On December 31, 2016, the minimum hourly wage rates for all fast food workers will increase according to the following specifications:

 

New York City: $12.00
Rest of the State: $10.75

 

For more information about your rights as a restaurant worker, take a look at our Top 10 Restaurant Pay Violations.

Bayou City Wings Discriminated Against Older Workers at Restaurants, EEOC Charges in Lawsuit

Bayou City Wings logo

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.”

 

Texas Roadhouse to Pay $1.4M to Settle Sexual Harassment and Retaliation Suit

texas roadhouse logo

A Texas Roadhouse restaurant in Columbus, Ohio will pay $1.4 million to settle a class sexual harassment suit filed by the U.S. Equal Employment Opportunity Commission (EEOC). EEOC had charged the restaurant with victimizing a group of female employees as young as 17 years old by subjecting them to sexual harassment and then retaliating against them for complaining.

According to EEOC’s lawsuit, the manager of the restaurant in the Reynoldsburg section of Columbus, Eric Price, harassed women and teen girls working in server, hostess and other front-of-the-house positions. In the suit, EEOC identified 12 victims of his abuse who suffered unwelcome touching, humiliating remarks about their and other females’ bodies and sexuality, and pressure for sexual favors in exchange for employment benefits or as a condition of avoiding adverse employment action. EEOC charged that the harassment began in 2007, continued for over three and a half years until the manager was fired in May 2011, and was coupled with retaliation against employees who opposed the abuse.

Although the companies’ owners and individuals with high-level authority received multiple complaints about the manager’s abusive conduct throughout his employment, they failed to take prompt, effective action to put a stop to the abuse, EEOC said. Price was not fired until May 2011, when he was seen on a surveillance video touching a 17-year-old female employee in his office at the restaurant during work hours, the agency charged.

Harassment and discrimination based on sex violate Title VII of the Civil Rights Act of 1964. Title VII also forbids employers from firing or otherwise retaliating against an employee because she complained about discriminatory conduct. EEOC filed suit (EEOC v. East Columbus Host, LLC d/b/a Texas Roadhouse and Ultra Steak, Inc., Civil Action No. 2:14-cv-1696) in U.S. District Court for the Southern District of Ohio, Eastern Division, after first attempting to reach a pre-litigation settlement through its conciliation process.

On Sept. 2, U.S. District Court Judge James L. Graham issued an order denying East Columbus Host and Ultra Steak’s motion for summary judgment on EEOC’s sexual harassment claims. He found that EEOC had presented sufficient evidence to overcome the motion. In rejecting the employers’ argument that they had established an affirmative defense because some of Price’s victims allegedly delayed or failed to complain, Judge Graham held that questions remained regarding the companies’ efforts to stop any sexually harassing behavior.

Referring to evidence that previous complaints had been made against the restaurant manager, the court noted that EEOC had described a pattern of complaints, including evidence that “less than a month into his tenure, Price made sexual remarks to … [a] high school-aged hostess … [who] did complain, and the only response she got was not from the corporate office, but from the very person she feared: Eric Price,” who told her “not to get other people involved if she had a problem.” A jury, Judge Graham held, “could see this as the first failure in a long line of tepid responses in the face of near-constant complaints, bookended by sexual harassment of teenage girls.” The court also rejected the defendants’ argument that EEOC had failed to conciliate its claims against them as required by Title VII.

In addition to the $1.4 million in monetary relief to the victims, the five-year consent decree resolving the lawsuit requires the companies to offer reinstatement to injured women identified by EEOC in agreed locations and positions. The decree prohibits the companies from rehiring the offending manager.

The decree further requires East Columbus Host and Ultra Steak to put in place an electronic recordkeeping system to track all gender discrimination and retaliation complaints of any kind and includes mandatory reporting of any allegedly discriminatory or retaliatory adverse employment action, such as failure to hire or promote.

Further, the companies must provide training to all employees on discrimination and retaliation. Supervisory, management, and human resources personnel are to be trained on their duty to monitor the work environment; how to receive and investigate complaints of harassment or discrimination; and how to respond to complaints effectively with corrective action. East Columbus Host and Ultra Steak also are required to report to EEOC on how they handle any internal complaints of gender discrimination or retaliation, and they must post a notice about the settlement at all restaurants covered by the decree.

EEOC recently updated its [email protected] website (at http://www.eeoc.gov/youth/), which presents information for teens and other young workers about employment discrimination. The website also contains curriculum guides for students and teachers and videos to help young workers learn about their rights and responsibilities in the workforce.

Happy National Waiters and Waitresses Day!

old school waiter photo

Today is National Waiters and Waitresses Day. To commemorate, check out this blog about the top ten wage violations in the restaurant industry written by waiterpay.com founder Louis Pechman, featured on the Huffington Post.

Long Island Restaurant Held Liable for “Appalling Sexual Abuse”

ayhans fish kebab logo

Three sisters who were subjected to sexual harassment at Ayhan’s Fish Kebab Restaurant on Long Island are entitled to damages, according to a decision by New York federal court judge William F. Kuntz.  The lawsuit against Ayhan’s was brought by three hostesses, all sisters, who were subjected to “appalling sexual abuse” at the restaurant.

Judge Kuntz found that there were numerous incidents of sex harassment at the restaurant, including male employees making lewd remarks to the women and touching their arms, legs and buttocks.  In the most flagrant example of harassment, one of the sisters was grabbed in a bear hug in July 2008 by a cook who groped her.  The cook halted the attack when a busboy came down to the basement.  In October 2008, the cook was convicted of felony attempted sexual abuse, served 4 months in jail and was deported.

Waiterpay Founder Featured on Brooklyn TV

Louis Pechman, the founder of Waiterpay, was a featured guest on BK Live’s June 2, 2014 segment on Tipped Wages.  The segment focused on pay issues in New York City restaurants, including concerns about the increase in lawsuits for illegal pay practices.  Among the topics discussed were the differences between minimum wage and tipped minimum wage, the complicated set of laws involving the tip credit, spread of hours, and other worker rights issues.

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