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After three years of litigation, TGI Fridays has finally agreed to pay $19.1 million in back wages to resolve allegations that the restaurant chain cheated thousands of servers and bartenders out of their hard-earned pay. Legal insiders, cited by the New York Post, say it’s the largest settlement ever brokered in a wage and hour lawsuit.
28,800 Tipped Employees Get Compensation
Around 28,800 tipped employees will be able to receive compensation through TGI Fridays settlement, which is technically being paid out by Carlson Restaurants Worldwide, a Texas-based company that used to own the casual dining franchise’s brand. All servers, bussers, runners, bartenders, barbacks and hosts who received tips but believe they were paid improperly may be able to secure compensation. Subtracting attorneys’ fees, each claimant will be entitled to an average of $442. In practice, individual awards will vary based on the amount of time an employee spent working at the restaurant.
As the lawsuit alleged, TGI Fridays is accused of forcing tipped employees to share their tips with un-tipped employees (a violation of federal labor law), paid some workers sub-minimum wages and failed to pay overtime properly. Former workers also said that their employers took money out of their paychecks when customers walked out on their bills and illegally failed to reimburse them for their uniform purchases and cleanings.
Lawsuit: TGI Fridays Violated Federal, State Law
Plaintiffs’ attorneys estimate that the actual amount of back wages owed to the employees is between $16.5 million and $91 million. In their multiple complaints, the employees alleged systemic violations of the federal Fair Labor Standards Act, as well as state labor laws in California, Colorado, Connecticut, Florida, Illinois, Maryland, Michigan, New Jersey and New York. The lawsuit was registered under the case number 1:14-cv-02740.
The class action lawsuit took a long and complicated route to resolution. Initially filed by twelve former employees in 2014, the class action’s growth was initially hampered, according to plaintiffs’ attorneys, as Carlson Restaurants attempted to pay off potential class members before they could join the suit. By January 2015, the company had paid $416,000 in overtime settlements to 19 workers, lawyers said, in an attempt to prevent them from joining with their fellow employees. Allegations also surfaced that TGI Fridays had lied to plaintiffs’ attorneys about the company’s efforts to quash a parallel wage suit, proceeding in a Massachusetts state court.
Awards Calculated On Work Time
The workers, however, were not deterred and today, after three years, their legal fight has come to fruition. The settlement has not yet been approved by the US District Court for the Southern District of New York. A hearing to decide whether or not the agreement should receive preliminary approval will be scheduled in the near future.
The settlement applies only to tipped employees, court records show. Eligible employees will be required to file a claim form to receive compensation. Law360 provides a more-detailed review of how the settlement will work. Eligible workers will receive a share of the settlement depending on how many weeks they worked during the time period covered by the suit’s allegations, which varies depending on the state where the work took place. Awards may be reduced or enlarged in light of relevant state laws.