Judge OKs $3.9M settlement in Fireman wage and hour lawsuit

June 30, 2008
Nation's Restaurant News

© Nation's Restaurant News. Author Elissa Elan.

In a decision likely to attract the attention of foodservice employers nationwide, a federal judge here is expected to approve a $3.9 million settlement of two lawsuits brought against Fireman Hospitality Group for alleged wage-and-hour infractions.

The lawsuits involving Fireman Hospitality, operator of several upscale restaurants in New York, are the latest in a string of claims brought against a variety of operators alleging violations of tip-pooling regulations and other wage-and-hour laws. In recent years, Starbucks, Applebee’s International, Brinker International and several fine dining establishments in New York — including Buddha Bar, Pastis and Balthazar — have been embroiled in similar cases.

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“Restaurateurs in New York, and throughout the country, have been placed in an untenable position by a variety of forces including state legislatures and agencies,” said attorney Carolyn D. Richmond of Fox Rothschild LLP in New York. “There is simply no consistent definition of ‘supervisor’ for purposes of tip pooling.” Richmond, who has represented restaurants in several lawsuits, cautioned against viewing the Fireman settlement as a model for resolving other pending actions, in New York or elsewhere. “The settlement is just that, a settlement,” she said. “It has no precedential value as it is not a court decision and will not affect any case.”

According to Richmond, current wage-and-hour laws are in need of updating.“Many of the [tip-pooling] regulations in place were written over 40 years ago and are not relevant to today’s restaurants,” she said. “As a result there are very large loopholes that plaintiff classaction lawyers have swooped in and taken advantage of.

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