What Are Wage Theft Lawsuits in the Restaurant Industry?

A number of wage theft lawsuits and settlements have been occurring during the past five years. However, they haven’t received as much media attention as restaurant workers’ fight for higher minimum wages.

As a restaurant owner, you should be aware of what wage theft is and the ways it can occur. Ensure your restaurant managers aren’t engaging in wage theft activities.

Examples of Wage Theft and Related Lawsuits

Large chain restaurants have been subject to lawsuits for reducing hours, not paying proper wages for side work and for misappropriating tips.

Requiring workers to work off the clock is not legal but some chain restaurants have been settling claims that allege they’ve been doing this. The Huffington Post reported about several well-known restaurant chains that settled or paid huge sums in wage theft lawsuits.

 

Dogs with choice of food diet

Ruby Tuesday settled a case for $3 million in 2014. The restaurant avoided paying bartenders and servers overtime by having them do checklists before or after clocking in for work. They also shaved hour totals down to 40 hours/week when workers went over 40 hours.

Outback Steakhouses settled a $3 million lawsuit to workers claiming that the restaurant required workers to complete pre-shift work before clocking in.

A Papa John’s New York franchise had to pay more than $2 million in overtime rates under the order of New York State Attorney General Eric Schneiderman for rounding down hours worked to the whole number to avoid paying overtime, and for paying workers the “tipped minimum wage” when they mainly did un-tipped work and for not reimbursing employees for the purchase and maintenance costs of bicycles used in deliveries.

Red Robin Restaurants in Pennsylvania paid $1.3 million for requiring tipped workers to share tips with kitchen expeditors when the restaurant was taking tip credits and not paying servers a full minimum wage. Kitchen expeditors had no contact with customers and did not qualify to be paid as tipped workers.

What Are Wage Theft Lawsuits in the Restaurant Industry?

Johnny Rockets had to pay 55 servers more than $570,000 under order of the Department of Labor (DOL) because they required servers to share tips with cooks and dishwashers.

Fourteen TGI Fridays servers received $485,000 to settle claims for having to spend more than 20 percent of their work time doing side work instead of directly relating to customers, which violates the 80/20 rule for tipped employees. Part of this settlement amount was also due to being forced to work off the clock.

Are You Concerned About Wage Theft?

If so, get legal advice as soon as possible. Stephen Hans & Associates is an employment law defense firm and can advise the best course of action for you to take as an employer

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How Can You Find Out What Federal Employment Laws Apply to Your Business?

Running your own business can feel overwhelming when you get a glimpse of all the laws that affect your operation.

It is smart for business owners to consult with an employment attorney to ensure handbooks, contracts, non-disclosure agreements and other legal documents are in order. Even so, there is a certain amount of self-education that is necessary. At Hans & Associates we like to keep our clients apprised of tools that can assist them with gaining legal understanding and remaining in compliance with employment laws.

 

Federal Employment Laws at Elaws

For federal laws, the Department of Labor (DOL) has a tool called Elaws , which includes the FirstStep Employment Law Advisor and other advisors that are useful. You can obtain a basic understanding of federal employment laws that relate you your particular industry.

FirstStep Employment Advisor

For example, the FirstStep Employment Advisor takes you through the basics, such as: do you know which posters federal law requires your company to display? You can answer “no” and then choose the link that applies to your industry. Restaurants, hotels, caterers, etc. is one category; agriculture is another, and so on.

Piggybank and calculator. Isolated on white background

FirstStep is just one of a number advisor categories that provide regulatory information about employment law. Here are other areas you can access:

  • Pay and Benefits
  • Safety and Health
  • Posters and Record keeping
  • Youth Employment
  • Veteran’s Issues
  • Fair Labor Standards Act (FLSA)

With Pay and Benefits, you can use the advisor to help you calculate overtime pay. Or you can get help deciding whether a particular employee is exempt from the minimum wage and overtime requirements. You may have questions about whether a work related activity counts as “hours worked” and whether you owe the employee pay for it.

Consult with Experienced Employment Defense Lawyers

If you have questions about employment law compliance issues or legal concerns, our attorneys at Stephen Hans & Associates are glad to help. We can provide you with seasoned legal representation based on more than 20 years of employment law experience.

 

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How Many Racist Statements Does It Take to Create a Hostile Work Environment?

If is severe enough, one racist statement can create a hostile work environment, according to the United State Court of Appeals for the Second Circuit. This court hears appeals for New York, Vermont and Connecticut.

As reported in The Legal Intelligencer , in the case Daniel v. T&M Protection Resources, Inc., the plaintiff alleged harassment, termination and retaliation because of the worker’s race, national origin and sexual orientation.

Details of the Daniel v. T&M Protection Resources, Inc. Appeal

The court concluded that the single use of the N-word as a severe racial slur was sufficient evidence to overcome the defense’s request for summary judgment in the hostile work environment claim. Previously, the district court had found in favor of the company, Protection Resources, which is located in Manhattan.

Daniel Otis worked as a fire safety director at the company and was eventually terminated in retaliation for his complaints of discriminatory treatment.

Among various derogatory comments the supervisor made about Daniel were slurs about his looking like a gorilla, complaints about his English accent and telling him to go back to England. He also rubbed his genitals against him and asked him whether he was gay. At one point the supervisor became angry and called him the N-word. A week after filing his complaint, Daniel was under investigation and then the company fired him for receiving personal mail at the workplace.

The district court found that use of a racial slur during one yelling incident was not enough to constitute a hostile work environment claim.

However, the appeals court ruled that the lower court erred in adjudicating that a one-time use of a severe racial slur did not support a hostile work environment claim. It was the court’s opinion that the use of the unambiguously racial epithet, “n—–,“ by a supervisor in the presence of his subordinates was a single act that can quickly alter employment conditions and create an abusive working environment.

Are You a Small or Medium-Sized Business Owner Facing Hostile Work Environment Allegations?

If so, get legal advice as soon as possible. Stephen Hans & Associates is a New York law firm with decades of experience representing business owners in employment disputes.

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Race Discrimination Lawsuit: Rosebud Restaurants Settled, Paying $1.9 Million

In a race discrimination lawsuit, the EEOC sued Rosebud Restaurants and parties settled for the amount of $1.9 million.

The EEOC brought a lawsuit against Rosebud, which operates 13 Italian restaurants in Chicago and nearby suburbs.  The restaurants were not hiring African Americans, and restaurant managers and the Rosebud owner Alex Dana used racial slurs when referring to African Americans. When the EEOC started investigating, a number of the restaurants had not hired any African American employees at all. In addition, Rosebud failed to maintain employment applications for one year, which violated federal law. The restaurants also failed to file employer information reports, which would contain information such employment by job category, race, ethnicity and gender.

Before taking legal action, the EEOC first attempted to use its conciliation process to resolve the issue. When a settlement could not be reached, it filed a lawsuit for racial discrimination in hiring based on Title VII of the Civil Rights Act of 1964.

Outcome of the Race Discrimination Lawsuit

Details of the settlement include:

  • African American applicants who were denied jobs will receive $1.9 million from Rosebud.
  • Rosebud now has hiring goals for qualified African American job applicants, including that 11% of future employees will be black.
  • The settlement decree prohibits Rosebud from engaging in future racial discrimination or retaliation
  • Rosebud must recruit African American applicants
  • Rosebud must train managers and employees against race discrimination and retaliation
  • For four years, Rosebud must periodically submit reports to the EEOC that show compliance with the settlement decree’s terms
  • Rosebud must post notices that inform employees about the decree’s terms

The parties were able to resolve the lawsuit through lengthy negotiations. The negotiations occurred prior to depositions and significant pre-trial motions that could have resulted in considerable litigation costs.

Consult with Experienced Employment Defense Lawyers

If you face employment issues such as discrimination or wage and hour disputes, Stephen Hans & Associates can provide you with seasoned legal representation based on more than 20 years of employment law practice experience.

 

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NYC Carwash Law Ruled Illegal Due to Promoting Unionization

Recently a NY federal judge ruled that the NYC Carwash law was illegal because it promoted unionization of carwashes.

 

In 2015, the NYC Council passed a law to regulate car wash businesses. The Council believed the law would protect low wage car wash employees who were being denied proper wages and tips by requiring carwash owners to carry bonds. Shops that had not unionized had to buy a $150,000 bond. Unionized shop owners only needed to purchase a $30,000 bond because workers would have stronger protections through a union.

A group of NYC car wash owners sued the city over the new law and alleged that it illegally favored unionized car washes.

Federal Court Ruling on Unionization and NYC Carwashes

A federal judge of the Federal District Court in Manhattan heard the case and ruled that the NYC law violated federal law because it favored unionization and “impermissibly intrudes on the labor-management bargaining process.” (The New York Times ) The United States Supreme Court had ruled on similar cases to this in the 1970s and 1980s.

The law would have affected the estimated 100 to 200 NYC carwash businesses, of which less than 10 percent are unionized.

Due to the lawsuit, the 2015 law had never gone into effect and awaited the court ruling.

The president of the union representing carwash workers said he would support one level of bond, valued at $150,000 for all carwash owners. These surety bonds ensured that workers would have money available in the event of wage theft.

Are You a Small or Medium-Sized Business Owner Facing Unionization?

If so, get legal advice and ensure you protect your rights. Stephen Hans & Associates is a New York law firm that assists business owners with employment and labor law issues. We have decades of experience helping businesses with unions and unionization issues.

 

 

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How Can You Make Sure You’re Ensuring Equal Pay and Fair Promotions?

Running a business requires having legal rudiments in place for many aspects of your company. The Equal Pay Act (EPA) is another federal law you must comply with and doing so can help you avoid wage and promotion lawsuits like the one recently faced by Sterling Jewelry.

Steps to Take to Ensure Equal Pay and Fair Promotions

XpertHR , a site by Lexis Nexis, suggests you take the following steps:

Knowledge of the EPA and State/Local Wage Laws. Under the EPA, men and women who work comparable jobs should receive equal pay. What determines whether jobs are comparable? Skills, job responsibilities, and similar working conditions in the same geographical regions are all factors. Equal pay encompasses more than just salaries and includes overtime, bonuses, stock options, insurance, vacation and holiday pay and other benefits such as promotional opportunities. Consult with your lawyer so you can also be aware of any state or local wage laws.

Anti-Discrimination Policies. Your company should have a policy that explicitly prohibits wage discrimination. All employees should receive pay based on their experience and skill.

Fair Decision-Making. Ensure no discriminatory factors are part of decision-making in regards to raises, bonuses and promotions. Such decisions should be based on skills, merit and performance and should never be based on protected classes of sex, race, national origin, etc.

Management Training. As the employer, you must ensure your supervisors and managers receive training on your policies and ways to avoid wage discrimination. They must understand what are non-discriminatory reasons and base decisions on legitimate factors.

Salary and Bonus Guidelines Documentation. To legally protect your business, you must create documentation. Document the guidelines you have established for deciding bonuses, such as whether merit, productivity, sales and commissions are the criteria. These are fair and predictable criteria for decision-making. In addition, letting managers, supervisors and employees know about the criteria helps them to meet job expectations and understand how decisions are made.

Documentation of Decisions. Document your employment decisions and have adequate records in case you ever need to defend them in disputes or lawsuits.

Auditing Pay Practices. Regularly review your pay practices to ensure no discrimination exists and take corrective action if any is uncovered.

Diverse Work Environment. Incorporate best practices that aim to hire employees based on merit, skills and experience and not based on excluding protected classes.

Performance Evaluations. Provide annual or biannual performance evaluations to help employees understand employment expectations.

Discussion of Wages. It’s illegal to prohibit employees from discussing wages, salary or benefits with other employees. The National Labor Relations Act affords employees this right. Do not prohibit it.

Prevent Lawsuits and Employment Disputes

Today, laws affect businesses in many ways. If you’re a business owner and have questions or concerns about legal issues, Stephen Hans & Associates can provide you with answers and help you safeguard your workplace.

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Sterling Jewelers Reaches Settlement with EEOC for Sex Discrimination

Sterling Jewelers is the parent company of Jared the Galleria of Jewelry and Kay Jewelers. It is the largest retail jewelry company in the United States. Recently, the EEOC brought a lawsuit against Sterling for discrimination over its pay and promotion practices.

The New York Times reported Sterling was able to reach a settlement with the EEOC.

Sterling agreed to hire an independent employment expert who would examine its compensation and promotion practices. Signet Jewelers, which is Sterling’s parent company, made a public relations announcement stating that it did not tolerate discrimination of any kind and that the steps taken as part of the agreement with the EEOC were consistent with its commitment to continuous review and improvement.

This was a legal victory for Sterling because it avoided having to admit wrongdoing and did not have to pay fines or compensation.

Another Class Action Lawsuit Sterling Faces

This is not the only lawsuit that Sterling has faced recently. Another class-action arbitration case accusing the company of gender bias is yet to be resolved. In March 2017, 12 women filed a class-action lawsuit against Sterling Jewelers. The assistant manager, Ms. Souto-Coons discovered a newly hired male salesman with no retail experience was hired and making $1.50 more than a woman who was the store’s top seller. She then reviewed all the files of co-workers and realized all the men were making higher hourly rates than the women who held the same positions.

The class action lawsuit also contains evidence that hundreds of former employees described incidents of sexual harassment that were reported and ignored. Signet said the company investigated and continues to investigate reports of misconduct. However, the class-action case does not focus on sexual harassment and the comments about sexual harassment are in the context of the complaints about pay disparities. There are 69,000 employees who are class members in the lawsuit.

Stephen Hans & Associates is a New York law firm that assists business owners with employment and labor law issues.

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