Cadillac Ranch Bartender Has Right Ingredients for Wage Classes

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By Jay-Anne B. Casuga

A former Cadillac Ranch All American Bar & Grill bartender can move forward with federal and state law class actions alleging that the national restaurant chain failed to notify workers about how it calculated their wages ( Koenig v. Granite City Food & Brewery, Ltd. , W.D. Pa., No. 16-1396, 5/11/17 ).

Chelsea Koenig said the restaurant didn’t properly notify workers that it used the federal Fair Labor Standard Act’s tip credit provision to determine their pay. The credit allows employers to pay tipped employees a lower hourly wage as long as the workers’ tips make up the difference between the subminimum wage paid and the $7.25 per hour federal minimum wage.

“Tip credit notice violations are a pervasive problem in the restaurant industry,” Gerald Wells III of Connolly Wells & Gray in King of Prussia, Pa., told Bloomberg BNA May 12. Wells is one of the attorneys representing Koenig. He declined to comment further on active litigation.

Koenig demonstrated that she was similar to other bartenders, servers, bussers and foodrunners at locations that do business as Cadillac Ranch in Florida, Indiana, Maryland and Pennsylvania, the U.S. District Court for the Western District of Pennsylvania ruled May 11. Such a showing is required to obtain initial certification of a FLSA collective action.

Cadillac Ranch said the workers can’t be similarly situated because some managers provided oral notice of the tip credit policy. But the court disagreed. The restaurant’s creation of a written tip credit in 2016, followed by a requirement that employees sign the policy in 2017, suggest a “flawed policy of oral notification,” the court said.

Additionally, the court certified a separate Pennsylvania class of Cadillac Ranch tipped employees for alleged violations of the Pennsylvania Minimum Wage Act. The Pennsylvania class could have as many as 220 class members.

Attorneys for Cadillac Ranch didn’t immediately respond to Bloomberg BNA’s May 12 requests for comment.

This case is one of only two wage and hour cases currently in federal court against Cadillac Ranch’s operator, Granite City Food & Brewery, according to Bloomberg Law’s Litigation Analytics.

The biggest tip credit-related legal controversy in recent years stemmed from a 2011 Labor Department tip-pool regulation. It barred all employers, whether they claimed the tip credit or not, from creating tip pools that require back-of-house staff, such as cooks and dishwashers, to share the tips of bussers, bellhops and other front-of-house workers.

That rule may be reconsidered under the Trump administration.

Robert J. Gray of Connolly Wells & Gray, and Gary F. Lynch and Jamisen A. Etzel of Carlson Lynch Sweet & Kilpela of Pittsburgh also represented Koenig. Christopher Michalski, Andrew J. Voss, Brian M. Hentosz, Kimberly J. Gost and Niloy Ray of Littler Mendelson in Philadelphia, Pittsburgh and Minneapolis represented Cadillac Ranch.

To contact the reporter on this story: Jay-Anne B. Casuga in Washington at jcasuga@bna.com

To contact the editors responsible for this story: Peggy Aulino at maulino@bna.com; Terence Hyland at thyland@bna.com; Christopher Opfer at copfer@bna.com

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