FLSA – Employee Wages: Restaurant and Food Industry Workers Proceed With Class Action Wage Claims

Issues often arise regarding wages paid to tipped employees in the restaurant and food industry who are not paid in accordance with legal requirements. Two recent reported cases demonstrate that when employees are not paid properly and the employees are able to join together and pursue their claims together as a collective action, employees have the ability to achieve successful results

In Bellaspica v. PJPA, LLC, 2014 U.S. Dist. LEXIS 32263(E. D. Pa. March 11, 2014)(Diamond, J.), a plaintiff employee filed an action under the Fair Labor Standards Act (FLSA) for a proposed opt-in class of plaintiff employees who were delivery drivers for a Papa John’s Pizza franchisee that owns 53 restaurants. The employee drivers alleged that their wages were effectively reduced below the lawful minimum wage because they were inadequately reimbursed for automotive expenses incurred in making deliveries; and they were required to perform excessive non-tipped work performed in pizza stores.

In many instances the amount of money at issue for an individual employee may appear to make it impractical to file a lawsuit. However, the law recognizes a procedure where employees may proceed in the form of a class action. An employee alleging an FLSA wage violation may bring a collective action on behalf of the employee and other employees similarly situated, subject to the requirement that no employee shall be a party plaintiff to any such action unless the employee gives consent in writing to become such a party and the consent is filed in the court. A federal district court has discretion to authorize notice to potential opt-in plaintiffs by conditionally certifying the matter as a collective action. To qualify for conditional certification, an employee must make the “modest factual showing” that the employee and the proposed “opt-in” employee are similarly situated so that the employer’s alleged policy affected the employee in the same manner in which it affected other employees. If the employee is able to make this showing, the employer will then be ordered to produce data containing the names, last known physical addresses, and known e-mail addresses of all possible opt in plaintiff employees who are then notified about the lawsuit by the Plaintiff’s attorney and given the opportunity to join the lawsuit.

In Bellaspica, two issues arose concerning the employee delivery drivers; insufficient reimbursement for driving their own vehicles to make pizza deliveries, and insufficient hourly wages for work performed in the pizza stores. Under the FLSA, employees who use their personal vehicles for work must be reimbursed for vehicle-related costs if not doing so would cause their net earnings to drop below the minimum wage. In Bellaspica, the court found that the employee and all of the proposed opt-in plaintiff class members were reimbursed at the same flat rate, any individual variations do not impugn this common fact and were not sufficient at least at the early stage of the proceedings to defeat certification; thus the employees were granted the right to proceed with their claims as a collective class action.

The FLSA requires employers to pay a minimum hourly wage of $7.25; however “tipped employees” may be paid as little as $2.13 an hour if they receive sufficient tips to make up the difference and a “tip credit” may apply to a tipped employee’s occasional related work that is not tipped. In Bellaspica, the Defendant employer paid its tipped employees, including its delivery drivers $6.00 per hour. and the employee alleged that because drivers spent approximately one-third of their time performing in-store tasks that were not tipped, their overall hourly wage fell below the lawful minimum wage. Consequently, the court found the evidence sufficient to conditionally certify the action under the theory of excessive non-tipped work and the court ordered the employer to produce data containing the names and contact information of all possible drivers who could become opt in plaintiffs and join the lawsuit.

The ability of restaurant employees to pursue their claims together in a collective action can be powerful. While the result of the ligation in Bellaspica remains to be resolved, claims by employees against the well-known Chickie’s & Pete’s chain of restaurant and sports bar in the Philadelphia areas were recently resolved, with many of the employee plaintiffs receiving thousands of dollars which the court found to be reasonable compensation for their claims. In litigation captioned, In re Chickie’s & Pete’s Wage And Hour Litigation, 2014 U.S. Dist. LEXIS 30366(E. D. Pa. March 7, 2014) (Surrick, J.), the Court approved a proposed settlement agreement under the FLSA filed on behalf of waiters, waitresses, and bartenders – employees compensated, in part, by tips from customers who alleged that they were willfully deprived of minimum wages, overtime pay, and gratuities, in violation of the FLSA, the Pennsylvania Minimum Wage Act, the Pennsylvania Wage Payment Collection Law and related laws. Under the Agreement, the employer entity Defendants paid the plaintiff employees $1,320,511.95 – $778,908.94 as payment for back pay of minimum wages, overtime compensation, and retained tips; with the remaining $541,603.01 as payment for liquidated damages. In addition, the employer entities separately paid $365,000 in attorneys’ fees and costs to the employees’ attorneys.

For more information on unpaid wages, overtime, the FLSA and Abramson Employment Law see http://www.job-discrimination.com/lawyer-attorney-1126494.html

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Filed under Fair Labor Standards Act, Pennsylvania Wage Payment and Collection Law, Unpaid Overtime FLSA

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