The lawsuit suggests that making waitstaff rely upon tips lends to racial discrimination, inequitable earnings, and even sexual harassment.
Labor advocacy group One Fair Wage has filed a federal lawsuit against Olive Garden parent Darden Restaurants, claiming the company’s tipping policies facilitate sexual harassment and lend to racial discrimination.
According to CNBC, the lawsuit was filed Wednesday in a California federal court. The complaint, notes CNBC, is “the latest salvo in the battle against the tipped minimum wage.”
California, like most other states, permits select businesses to pay service staff considerably under the federal minimum wage. Employers can compensate waitstaff as little as $2.13 per hour, provided servers are able to make up the difference in tips.
The last time the federal minimum wage for tipped workers increased was in 1991. Democrats attempted to outright eradicate subminimum wages earlier this year. However, their drive to reform wages was not able to pass the Senate.
Darden Restaurants, says CNBC, was among the most vocal opponents of any congressional effort to improve earning potential for low-wage workers.
In their lawsuit, One Fair Wage alleges that Darden’s tipping policy causes non-White workers to earn less than their White counterparts.
As evidence, One Fair Wage cited a poll of 200 Darden servers. Non-White workers, on average, reported making 18% less per hour than their Caucasian coworkers.
Furthermore, the lawsuit observes that managers at Darden restaurants can directly influence workers’ income by assigning them to high-demand shifts or tables.
The same survey also claims that servers who are paid less than minimum wage are more likely to report being sexually harassed at work.
“The cash wage policy is the direct cause, or at least a motivating cause, of this disparate impact,” the lawsuit states.
In lieu of any new legislation, One Fair Wage has proposed a number of alternative solutions, including mandatory service charges and pooled tips.
However, Darden has protested the lawsuit’s claims, saying the company takes sexual harassment seriously.
“To be clear, this is not about Darden,” company spokesman Rich Jeffers said in a statement. “The complaint makes clear that their objections are with federal and state wage laws—not with our practices.”
Jeffers further told CNBC that the company’s tipped workers make more than $20 per hour on average. Darden also recently raised its “pay floor” to $10 per hour, including tip income, and is planning to raise the same pay floor to $11 per hour in January.
Interestingly—and perhaps problematically—One Fair Wage is the only named plaintiff in the suit against Darden. The group says that it has standing to sue Darden and Olive Garden because it has had to divert significant legal and financial resources to the company’s waitstaff, many of whom requested financial assistance throughout the coronavirus pandemic.
One Fair Wage’s ultimate goal, says Today.com, is for a court to rule Darden’s policies in violation of the Civil Rights Act of 1964; the lawsuit also requests an inunction against Darden continuing to uphold or maintain its current tipping practices.