Olive Garden, Red Lobster, and LongHorn Steakhouse Sued for Underpaying Employees

Alyssa Enzor and Adam Maniscalco

In Florida, Darden Restaurants Inc. is being sued for underpaying employees in violation of federal labor laws. The company runs a number of popular restaurants, including Olive Garden, Red Lobster, and LongHorn Steakhouse and has allegedly engaged in widespread illegal underpayment activity. Thus, the number of potential plaintiffs may be in the thousands, and this suit, or variations of it, may spread across the entire country. Lead lawyer for the plaintiffs, David Lichter, was quoted as saying “Darden has a companywide pattern and practice of paying its employees below minimum wage and less than what the law requires . . .we’re seeking not only to correct the wrongs that have occurred at Darden, but hopefully this will stimulate change across the country.”[1]

The lawsuit was filed in Miami federal court as a collective action and seeks to represent current and former employees of Darden dating back to August 2009. The suit seeks millions of dollars in back pay, plus interest and attorneys’ fees. A copy of the complaint can be viewed here.

Attorneys for the plaintiffs have established a website where current and former employees of Darden from across the United States can go to evaluate their claims and to submit their names and contact information to be considered for addition to the lawsuit. As the world’s largest restaurant group, with nearly 168,000 employees, the amount of money Darden could be on the hook for is staggering.

The complaint alleges two primary types of violations, which are common throughout the restaurant industry. The first is for work performed off the clock, for which Darden did not pay employees. In this case, plaintiffs claim that they were required to arrive at work for a scheduled shift, but were not allowed to clock in until the first customer arrived. Likewise, plaintiffs were required to clock out at the end of their shifts, but prior to having completed all required tasks. This practice allowed Darden to keep many employees’ recorded time beneath the forty hour per week threshold to avoid paying them overtime.

Unfortunately, this practice is widespread in the restaurant world, with employees being required to come early for set-up and opening tasks prior to clocking in, and stay late to clean, and perform other closing tasks.

The second violation alleged by plaintiffs is referred to as a tip credit violation. Tipped employees can ordinarily be paid at a rate below minimum wage, and this is what Darden did. However, the complaint states that plaintiffs were required to spend over 20% of their time at work performing maintenance and prep duties. At Darden, this work was referred to as “side work”, and included doing dishes, vacuuming, rolling silverware, portioning salad dressing, cleaning menus, and filling condiments. Under the Fair Labor Standards Act, plaintiffs who spend more than 20% of their shift performing such tasks should be paid at the full minimum wage for that time. For more information on how tipped employees should be paid, see this fact sheet provided by the U.S. Department of Labor.

This suit stands as a vivid reminder that although tipped employees need not always be paid at the full minimum wage rate for all hours worked, they are still protected in many ways under the Fair Labor Standards Act. If you currently work for Darden, or have worked for them within the past four years, give us a call for a free consultation to determine whether you may be eligible to participate in this suit. If you have not worked for Darden, but have concerns about the way your employer is paying you, we are happy to answer your questions. Contact us at (256) 770-7232.

[1] http://jobs.aol.com/articles/2012/09/07/olive-garden-red-lobster-workers-sue-alleging-unpaid-wages/