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.
A jury decision finding that Chili’s Restaurants unlawfully required its servers to share tips with expediters was upheld in a September 14, 2011 decision by the United States Court of Appeals for the Fifth Circuit.
The servers alleged that Chili’s violated the Fair Labor Standards Act (“FLSA”) when its managers coerced servers to pay a portion of their tips to employees who were not entitled to tips. The FLSA permits employers to pay sub-minimum wage to employees who “customarily and regularly received tips.” 29 U.S.C. § 203(m). Employers may not avail themselves of the sub-minimum wage unless “all tips received by [a tipped] employee have been retained by the employee, except that this subsection shall not be construed to prohibit the pooling of tips among employees who customarily and regularly receive tips.” The servers alleged that they did not retain all of their tips because they were forced to pool their tips with expediters who did not customarily and regularly receive tips.
The expediters at the heart of the case are known as “Quality Assurance” workers (“QAs”). According to Chili’s corporate documents and job descriptions, QAs at Chili’s inspect completed food orders from the kitchen, garnish plates, and delegate to servers and bussers the delivery of food to customers. The central question decided by the Court was whether QAs “customarily and regularly” receive tips or are otherwise entitled to share in the tip pool.
The jury found that Chili’s did not prove that QAs “work in positions or an occupation that customarily and regularly receive tips.” The Appeals Court concluded that Chili’s had the burden to prove it operated a legal tip pool, but failed to convince the jury of QA’s eligibility.
The decision covers approximately 55 servers nationwide who joined the case. According to Rex Burch, the attorney for the servers, the judgment in the case was $1,772,000.