A local seafood restaurant recently paid out more than $40,000 in a settlement with two employees in a dispute over back pay.
A suit filed in U.S. District Court in Mobile in January claimed the Gulf Shores location of the Original Oyster House failed to meet the requirements of an exemption to the Fair Labor Standards Act, pertaining to tip employee credits.
Daniel E. Arciniegas, of Wiggins, Childs, Pantazis and Quinn P.C., sued on behalf of two former servers, Jeff Beck and Alesia Daniel, arguing in a 15-page complaint that more than 20 percent of his clients’ shifts were made up of side-work, or work where they didn’t interact with customers.
The suit also claimed the servers were owed wages related to a system known as a tip pool operated by the restaurant, which forced them to share tips with employees who didn’t directly interact with customers. The suit argued the tip pool was invalid because it included oyster shuckers and kitchen staff, who didn’t interact with customers on a regular basis.
“This action is brought to recover unpaid compensation, in the form of unpaid wages and overtime, owed to the plaintiffs, and all similarly situated servers employed by the defendant, pursuant to the FLSA,” the suit reads. “For up to three years prior to the filing of this complaint, (the) defendant has had a uniform policy and practice of requiring employees to participate in an invalid tip pool.”
The suit alleges the servers were paid $2.13 an hour, and were required to participate in a tip pool that included employees who aren’t usually tipped, like oyster shuckers.
“Oyster shuckers are non-tip employees as they are not employed to engage with customer(s), but to prepare oysters in the kitchen, away from customers,” the suit reads. “Whatever interaction oyster shuckers had with customers was incidental. The oyster shuckers do not customarily and did not regularly receive more than ($30) in tips a month, nor did they provide service to customers in a way that warranted a share of the gratuity left by customers.”
The suit claims the restaurant’s inclusion of non-tip employees into the tip pool invalidates it, which resulted in the “misapplication of the tip credit, as well as the misappropriation of the servers’ tip-earnings.”
The suit says the restaurant counted the pre-tipout total as the tip credit without crediting the servers for the money they paid to the tip pool when checks were issued.
The suit also alleges servers were asked by the restaurant to report to work about an hour before they opened and would perform non-serving duties for the same $2.13 per hour, which is minimum wage for tipped employees.
“Duties performed during this time included washing windows, cleaning section(s), wiping down tables, window ledges and baseboards, making tea … setting up tables … stocking server stations with to-go bags, to-go cups, to-go silverware, napkins, paper towels and any supplies needed throughout the day,” the suit reads. “At the end of their shifts, plaintiffs … were required to perform non-serving, non tip-producing duties for approximately 45 minutes to one hour.”
According to the suit, this side work made up more than 20 percent of their working time.
The suit also claims that servers who clocked in early had their time records adjusted to the start time of their shift.
The Original Oyster House denied any wrongdoing in an eight-page answer to the suit filed in early February. In addition, the restaurant, through attorney R. Scott Hetrick of Adams and Reese, LLP, asked the suit to be dismissed “in its entirety with prejudice and without costs or fees of any kind to (award) to the plaintiffs….”
The restaurant did admit in the document that oyster shuckers “at times received a small percentage of servers’ tips generated from raw oyster sales.” The restaurant also admitted expeditors occasionally received a small percentage of tips generated from food sales.
As part of a settlement reached as a compromise between the two parties, the restaurant didn’t admit any fault, but agreed to pay out a total of $18,408.28 to Daniel and $25,857.96 to Beck in unpaid and liquidated wages, according to court records. The restaurant also agreed to pay court costs and attorneys fees of $7,056.46.
Hetrick didn’t comment specifically about the case, but did say it would be a good idea for restaurant owners in the area to seek legal advice pertaining to the Fair Labor Standards Act.
“I think anyone who operates a restaurant locally needs to seek counsel, as it pertains to tipping,” he said. “Ignorance of the law is no excuse. A lot of people could be breaking this law, or skirting it.”
Bob Omainsky, owner of Wintzell’s Oyster House, said he can’t speak to the practices of the Original Oyster House, but said oyster shuckers at Wintzell’s are paid an hourly wage “significantly above minimum wage.”
“They earn their own tips,” Omainsky said. “They shuck for the public. People actually sit at the oyster bar.”
He said Wintzell’s servers are paid $2.25 an hour plus tips and can be paid more depending on performance and seniority.