TGI Friday’s Workers Could Receive $19.1 Million in Settlement Agreement
TGI Friday’s, the popular American casual dining restaurant chain, has agreed to pay $19.1 million to settle allegations that it underpaid its employees, including bussers, barbacks, runners, servers, hosts, and bartenders, for years. The settlement will mark the largest wage and hour payout in history if workers receive the specified amount, according to industry experts. It is the result of more than three years of class action litigation in the U.S. Southern District of New York.
The claims of its employees failing to receive proper overtime wages, tipped workers being forced into sharing earnings with non-tipped workers such, as silverware rollers and expeditors, and improper record-keeping with regard to wage payments. The tipped workers had also alleged the restaurant chain failed to meet the strict requirements outlined by the Fair Labor Standards Act and the New York Labor Law which would allow them to pay a reduced minimum wage rate to a tipped employee. Instead, TGI Friday’s had a policy that tipped workers were to spend at least two hours or 20 percent of their shift doing non-tipped work. This included general cleaning, bulk food preparation, cutting produce, and stocking the bar and service areas, among other activities.
Tipped workers were to also perform “off-the-clock” duties for which they claim to have never been compensated. Some of the odd requirements included having to punch in after they worked their first table and punch out of their shift before engaging in side, closing activities. All employees were supplied with only one uniform, which was not laundered by the restaurant and laundry services were not reimbursed. And, unlawful deductions were taken from employee’s checks, including reductions in pay for customer walk-outs, over which workers had no control.
Court records show that the total alleged wages workers did not receive amounts to $91 million. Approximately 28,000 former employees are entitled to a portion of the payout with Carlson Restaurants, Inc., which owned TGI Friday’s at the time.
Carlson is a privately held business that currently maintains 1,300 hotels including the Radisson hotel chain. It was first sued in 2014 by a dozen TGI Friday workers across nine states. Carlson sold TGI Friday’s in 2014 to Sentinel Capital partners and TriArtisan Capital Partners. For years, the company had allegedly tried to pay off potential plaintiffs to the lawsuit in an effort to convince them from joining. Records indicate it had paid out $416,000 to 19 workers. Some accepted as little as $2,500, but one received a whopping $82,000.
“The settlement, if approved, will eliminate the risk and delay of years of further litigation and put money in the hands of the low-wage workers who earned it,” the plaintiffs stated after it was reached earlier this month. The number is subject to final review and approval.
“This case highlights the extraordinary scope of wage theft in the restaurant industry,” said Louis Pechman, a restaurant labor attorney who was not directly involved in the case. The popular Mexican eatery, Chipotle, was also recently accused of wage theft. A proposed class-action lawsuit filed against the chain in June alleging it failed to pay overtime wages to employees working beyond 40 years per week.