Chili’s Restaurant Servers Win Case Holding Expediters Should Not Be in Tip Pool

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.