The New York Times has reported that celebrity restaurateur Mario Batali has agreed to settle a Fair Labor Standards Act (FLSA) case with his employees for $5.25 million. That is a lot of meatballs. Mr. Batali’s restaurant group apparently had a policy of taking 4% or more of the wine sales per night and deducting that from the tipped employee’s tips. The restaurant group claimed that was to cover wine research and wine glass breakage. The employees claimed it went solely to bolster the restaurant’s profits.
The U.S. District Court for Southern District of New York had previously ruled that all of the employees could combine their claims in one proceeding thus minimizing the costs for both sides but massively increasing the risk to the employer. The Fair Labor Standards Act, 29 USC 216 (b) allows employees to join together in a case where there is evidence of a common plan. The common plan here was that all the restaurants had similar deduction plans in place for tipped employees. FLSA cases are increasingly dangerous for restaurants which do not comply with the law. As employees become more aware of the law, employers are going to be less able to skirt the provisions related to pay.
For more information about this case or employment related matters contact Rich Carter.