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Riggan Law Firm Obtains Conditional Class Certification for Customer Service Representatives in FLSA Case

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On November 30+, 2012, in a class action wage lawsuit being handled by Riggan Law Firm, LLC, a St. Louis employment law firm, and Dashtaki Law Firm, a federal Judge entered an Order granting conditional class certification under the Fair Labor Standards Act. In an Order in June 2012, the Court rejected HotShots’ bid to have the lawsuit dismissed.

The lawsuit was originally filed by Riggan Law Firm, LLC on behalf of two former employees of HotShots Sports Bar & Grill, a chain of sports-themed restaurants/bars with 11 locations in and around St. Louis, Missouri. The suit alleges that HotShots has violated federal and state minimum wage laws by requiring tipped employees (such as servers and bartenders) to share (pool) tips with employees who do not customarily and regularly receive tips, such as cooks, dishwashers, and doormen. To read a blog post about the original filing of the lawsuit, click here.

Federal and Missouri law allows employers to pay “tipped employees” a guaranteed cash wage of less than the full minimum wage and then take a credit for an amount up to the full minimum wage for tips that the employees receive from customers. However, in order to take advantage of this so-called “tip credit,” employers must meet certain requirements. For example, if the employer requires tipped employees to share tips in a tip pool, there are certain types of employees whose participation invalidates (makes unlawful) the tip pool. The types of employees who are not allowed to participate in a tip pool include managers and “back of the house” employees such as dishwashers and cooks. The lawsuit alleges that participation in HotShots’ tip pool by ineligible employees legally invalidated the tip pool, caused HotShots to forfeit the tip credit (thus causing any tips received by employees to be disregarded for minimum wage purposes), and resulted in federal and state minimum wage violations.

HotShots raised a number of arguments in opposition to the Plaintiffs’ Motion for Conditional Certification. First, HotShots argued that not all of the potential class members are similarly situated because some of them worked for HotShots corporate-owned locations, and some worked for franchised locations owned by companies not owned/controlled by HotShots’ ownership group. The Court rejected this argument because even though the franchised locations are separately owned, there is evidence that the HotShots ownership group sent managers and other HotShots employees to work and train other employees at the franchised locations. The Court found that HotShots’ franchise arrangement demonstrates sufficient “control” for conditional class certification, and that while there is a factual dispute between Plaintiffs and Defendants regarding the employment relationship for franchised employees, the Court cannot make credibility determinations at the conditional certification stage of the case.

Second, HotShots argued that back of the house employees, such as cooks and dishwashers, are not proper class members in the case. The Court rejected this, finding that the proper class definition is all HotShots employees who shared in any tip pool because employees who participated in the tip pool were allegedly victims of the same policy or plan and denied compensation as a result of the tip-pooling arrangement.

HotShots raised a number of objections to the form class notice proposed by the Plaintiffs. Specifically, HotShots argued that dissemination of the class notice to the class members should be handled by a third party administrator rather than Plaintiffs’ counsel to prevent any improper solicitation of potential class members. The Court rejected that argument, found no legal basis for utilizing a third party administrator for distributing the class notice, and held that the customary and approved method for dissemination of the class notice is for it to be handled by Plaintiffs’ counsel. Also, the Court adopted Plaintiffs’ proposed three-year statutory recovery period for the class, and rejected HotShots’ argument that a two-year period should apply. Finally, in response to dispute between Plaintiffs and Defendants about what contact information should be produced with respect to the class members, the Court ordered Hotshots to provide last known addresses and e-mail addresses for the class members (as well as dates and locations of employment), but held that HotShots was not required to provide telephone numbers for the class members.

According to the Court’s Order, HotShots has a deadline of December 17, 2012 to provide to Plaintiffs’ counsel a list of all persons who are potential class members. The scope of the class is defined by the Court to include all current and former hourly-paid employees of Hotshots who shared in any tip pool within the last three years. Upon production of the class list by HotShots, Plaintiffs’ counsel are directed to distribute a notice (by mail, and if applicable, e-mail) to all class members advising them of their rights in the lawsuit, including but not limited to their right to opt-in to the suit and make a claim for unpaid wages. Once the notice is mailed, potential class members will have 90 days to join the suit, which can be accomplished by providing a signed opt-in consent form to Plaintiffs’ counsel for filing with the Court.

To read a copy of the Court’s Order granting conditional certification, click here.

If you are a potential class member in the lawsuit (i.e., you were an hourly employee at HotShots who participated in a tip pool within the past three years), you can click here to download/print the class notice and opt-in consent form, and/or you may contact Plaintiffs’ counsel, Russ Riggan, of Riggan Law Firm, LLC, for additional information.

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