United States District Judge James M. Munley from the Middle District of Pennsylvania granted final approval of a class/collection action settlement on March 10, 2016 that Winebrake & Santillo reached with Pennsylvania Red Robin Franchisor Lehigh Valley Restaurant Group, Inc. (“LVRG”). The $1.3 million settlement provided unpaid wages to Servers employed by LVRG that were required to share tips with Expos (a.k.a. Expediters) since February 2011. LVRG operates 20 Red Robin restaurants throughout Pennsylvania including locations in Allentown, Center Valley, Easton, Harrisburg, Hershey, Lancaster, Harrisburg, and Quakertown.
In this lawsuit, Ford v. Lehigh Valley Restaurant Group, Inc., the Servers that worked at LVRG asserted that LVRG violated the Fair Labor Standards Act (FLSA) and the Pennsylvania Minimum Wage Act (PMWA) by requiring them to share their tips with Expos. Servers were required to contribute 3% of their gross sales to a tip-pool. LVRG then distributed a portion of those tips to Expos. The lawsuit alleged that because Expos (who function as back of the house employees) do not have direct interaction with restaurant patrons, LVRG’s tip-sharing policy violated federal and state law. As a result, the Servers sought to recover the difference between the $7.25 minimum wage and the $2.83 (or, in some instances, $3.33) they were paid by LVRG. By only paying its Servers below the minimum wage, LVRG sought to utilize a tip-credit in the amount of $4.42 (or $3.92 in some instances).
Earlier in the lawsuit, Winebrake & Santillo defeated motions to dismiss the lawsuit filed by LVRG which argued that the Servers did not have viable claims. The Middle District of Pennsylvania and the Lackawanna County Common Pleas Court rejected LVRG’s motions finding that under federal law and state law, to take part in a tip pool, a restaurant employee must have direct customer interaction.