Tip Pooling Lawsuit Against HotShots Sports Bar & Grill Allowed to Proceed, Says Court

Tip Pooling Lawsuit Against HotShots Sports Bar & Grill Allowed to Proceed, Says Court

As indicated in a previous blog post in March 10, 2012, Riggan Law Firm, LLC, a St. Louis wage and hour law firm, working in connection with Dashtaki Law Firm, LLC, previously filed a class action wage lawsuit against HotShots Sports Bar & Grill, which has several locations in the St. Louis metropolitan area.

The lawsuit alleges that HotShots violated the Fair Labor Standards Act ("FLSA") and Missouri law by misappropriating wages from its employees by implementing and enforcing an unlawful tip pooling policy. Specifically, the plaintiffs allege that servers, bartenders, and other tipped employees of HotShots were required to share tips with employees, such as diswashers and cooks, who do not regularly and customarily receive tips, and as a result, HotShots' reliance on customer tips as a credit toward paying its employees at least minimum wage was unlawful. In addition to their unpaid wages, the class members in the lawsuit seek recovery of liquidated damages, attorneys' fees, and court costs.

In response to this lawsuit, the attorneys for HotShots filed a motion to dismiss, alleging that the Plaintiffs did not sufficiently allege an employment relationship with respect to all of the named Defendants under the FLSA and Missouri law. The lawsuit names as Defendants two individual owners/managers at HotShots, as well as ten HotShots restaurant/bar locations in Missouri and Illinois. The Honorable John A. Ross, United States District Judge for the Eastern District of Missouri, disagreed with Defendants' position, and denied the Motion to Dismiss. Judge Ross held that Plaintiffs had sufficiently pled a joint employer relationship with respect to all of the named Defendants. The case remains pending, and is scheduled for jury trial on December 2, 2013. To read a copy of the Court's Order, click here.

Tip pooling is a common practice in the restaurant industry. A tip pool is a policy that requires employees such as servers to share their tips with other employees who assist them in serving customers, such as bussers. In order for an employer to take advantage of the tip credit (i.e., in order for an employer to count customer tips toward its obligation to pay employees minimum wage), an employer must strictly follow certain rules. First, the employer must give employees notice that it intends to take a credit against the a tipped employee must earn at least minimum wage when tips and the guaranteed hourly wage are added together. Second, in implementing a tip pool, tipped employees cannot be required to share their tips with employees who do not regularly and customarily receive tips, such as "back of the house" employees (cooks, food preparers, dishwashers, etc.) and managers. A failure to follow these rules invalidates a tip pool, and under the law, all tips paid to employees are disregarded for purposes of calculating whether they were paid at least minimum wage. The U.S. Department of Labor has issued a Fact Sheet that outlines some wage violations that are common within the restaurant industry.

If you are a tipped employee, and you are required to share tips with back of the house employees or managers, you may be entitled to additional pay under the law. If you wish to assert a claim or better understand your rights to fair pay, you should contact a Missouri wage and hour lawyer.

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