Issues: Unpaid Overtime, Unlawful Deductions, Tip Misappropriation, Spread of Hour

On May 31, 2024, a federal judge in the Southern District of New York granted class certification to a group of servers, runners, bussers, bartenders, and barbacks who worked after October 5, 2015 at two restaurants located in Manhattan called Eight Oranges Inc. DBA The Bao and Chibaola Inc. DBA Uluh. Plaintiffs alleged in this lawsuit that Defendants violated the overtime, minimum wage, and tip credit provisions of the Fair Labor Standards Act (“FLSA”), and the overtime, minimum wage, tip credit, uniform reimbursement, spread of hours, wage notice, and wage statement provisions of the New York Labor Law (“NYLL”).

In Plaintiffs second amended complaint, Plaintiffs’ specifically alleged that Defendants failed to provide tipped workers with adequate notice of the tip credit, required tipped workers to perform a substantial amount of non-tipped work (side work) without paying them the full minimum wage, required tipped workers to pay for tools of the trade such as uniforms without proper reimbursement, applied a one-hour break deduction from tipped workers’ pay even when they did not take a break, failed to pay tipped workers at the minimum wage rate and overtime rate, required tipped workers to participate in a tip distribution pool that included tip-ineligible workers such as managers, expeditors, soup dumpling cooks, dessert cooks, and food packers, failed to pay the tipped workers spread of hours pay when their workday exceeded ten hours, and failed to provide proper wage notices and accurate wage statements.

According to the U.S District Judge, in their motion for certification, Plaintiffs “convincingly established [that The Bao and Uluh] enacted a single set of common practices – which were implemented across both Restaurants and caused injury to all Tipped Workers in similar ways.” The Judge held that the evidence provided by Plaintiffs established that both The Bao and Uluh belonged to “a single system, out of which the claims of the Named Plaintiffs and the putative class members arise[d].” The Judge also found that the basement at Uluh acts as the central management office for both restaurants since that is where all employment records are maintained and employment practices are generated.

Though Defendants argued that The Bao and Uluh and the proposed class of tipped workers were dissimilar, the court found that there are no “objective distinction in the qualifications” between servers, runners, bussers, bartenders, and barbacks and that the two restaurants ran in an “integrated fashion” with common labor policies that violated the law. The Court held that the “thrust of the claims” state that tipped employees were injured by common policies at both restaurants that applied to all tipped workers. Therefore, there were no “objective distinctions” between tipped workers that would eliminate the potential for class-wide resolution.

Restaurants employees are entitled to the full minimum wage when their employer applies a tip credit to their wages without complying with the long-standing NYLL prerequisites necessary to properly claim the tip credit. Employees are also entitled to the full minimum wage when tip ineligible positions that do not interact with customers are included in the tip pool, and when employees perform an excessive amount of non-tipped work (side work) during their work day. Employers are also required to provide its employees with proper annual wage notices, accurate weekly wage statements with each payment of wages, and reimburse its employees for uniform payments on their next pay date.

If you worked for either The Bao or Uluh on or after October 5, 2015 you have the opportunity to join this lawsuit against the restaurants for your potential owed wages. If you believe you’ve been affected by similar circumstances and wish to explore your legal options, we encourage you to reach out to an attorney at Fitapelli & Schaffer for a free consultation. Our team is dedicated to advocating for the rights of workers and ensuring they receive the compensation they rightfully deserve.