A restaurant class action lawsuit — alleging serious violations of the Federal Labor Standards Act (FLSA) — has put a Cincinnati restaurateur in the hot seat.
The class action alleges that waitstaff at Jeff Ruby’s Steakhouse and Carlo & Johnny had been compelled (illegally) to share their tips with managers and other workers who didn’t normally receive tips. The plaintiffs allege that this tip pool sharing not only violated the FLSA but also bumped the workers’ wages below minimum wage. Sarah Leyshock, a lawyer for the plaintiffs, stated the case plainly: “The law simply states that managers cannot be tipped out… Under the Fair Labor Standard Act, employees are required to retain their own tips. The one exception is that employees can be required to share their tips in a valid pool.”
Allegedly, this raiding-of-the-tips lasted from the beginning of 2010 through 2012.
Jeff Ruby, the owner of six Ohio restaurants and a casino resort, took to the Internet to defend his company and its conduct. He wrote on his website:
“Dear friends, even though I have been advised to not litigate through the media, after watching one-sided, accusatory news coverage, I agree with my team that I must respond. I will keep it brief. I know you’re smart enough to connect the dots. We have the greatest employees in the world. We invest a tremendous amount of resources into ensuring they have the necessary training, knowledge and experience to perform to the best of their ability. Simply put, our servers are the best in the business. Therefore, they are highly compensated – averaging $65K a year, with shifts that average 7 hours a day. Because of my gratitude toward them, I pay one million per year out of my own pocket, so every employee from dishwasher up has 100% company-paid health insurance coverage. The billion dollar restaurant chains (including casinos) don’t provide the coverage I do. My team is my family, and I love them dearly. We look forward to defending our loyalty to them.”
Those are touching, emotional words, and it’s great that Mr. Ruby is so passionately devoted to his employees and that he has offered them extensive health coverage.
At the same time, the law is the law. As attorney Leyshock put it, “when you violate [the FLSA’s] regulations on tip pooling, you are no longer entitled to that credit towards meeting the minimum wage requirement.”
It’s obviously hard to build and grow a restaurant. And entrepreneurs should certainly be entitled to make a profit from their investment. But the rights of service workers are often trampled on for no good reason. If you’re making close to minimum wage — and then you see your tips siphoned away, illegally, for two years — that’s not fair.
Of course, obviously we cannot comment on the specifics of this case. But the attorneys here at Joseph & Kirschenbaum have seen and litigated many similar cases.
We love restaurants. We love good food. We love the entrepreneurial spirit. Attorney Kirschenbaum himself grew up working in the restaurant industry. But employers need to be held accountable, whether they’re illegally nickel and diming their employees by cutting into their fairly earned tips, or they’re engaging in much more outrageous behavior, like harassment, discrimination, or retaliation.
If you or someone you care about has been victimized by a restaurant’s unfair practices – or by unfair practices at any other workplace – connect with our team at email@example.com or (212) 688-5640 for a free consultation.