Cheddar's Casual Cafe Plagued by Minimum Wage Lawsuits

Recently, Cheddar's Casual Cafe has been plagued by minimum wage lawsuits brought by current and former servers for violations of the Fair Labor Standards Act. In consolidated lawsuits filed by former employee/servers of Cheddar’s Casual Café in Tampa Florida federal court, it was alleged that the national chain violated the Florida Minimum Wage Act (“FMWA”) and the Fair Labor Standards Act (“FLSA”) by: (1) failing to pay them for all hours that they worked; (2) improperly utilizing the tip credit; (3) failing to pay them overtime; and (4) improperly engaging in tip pooling. The former employees also alleged that that Cheddar’s Casual Café improperly took a tip credit from their wages for time spent performing related, non-tipped work. The former servers listed various examples of the related, non-tipped work that they were required to do, which they referred to as “side work.” The former employees also alleged that Cheddar’s Casual Café regularly and consistently required them to perform “side work” including restocking supplies, stocking ice, sweeping floors, stocking food/condiments on the expo line, brewing tea and coffee, running food to tables for other servers, wiping down/washing trays, stocking lemonade mix, unclogging drains, cleaning soft perform side work before, during, and after their shifts and that the side work exceeded 20% of the time spent working.

In addition to the side work, the workers alleged that Cheddar’s Casual Café required them to perform tasks belonging to an entirely different category of employment that was unrelated to and not incidental to tipped service. The former employees referred to this type of work as “dual occupation” work, which includes maintenance, cooking, and cleaning. As a result, the former employees contend that Cheddar’s Casual Café owes the full minimum wage (without regard to a tip credit) for the time that they spent performing the dual occupation work.

Following an earlier investigation by the U.S. Department of Labor’s Wage and Hour Division, Cheddar’s Casual Cafe Inc. paid $99,168 in back wages and $62,417 in liquidated damages to 268 current and former employees of Cheddar’s restaurants in Oklahoma City, Okla., and Lubbock, Texas, under the terms of a consent judgment. The chain will pay an additional $166,620 in civil money penalties for child labor violations, as well as for willfully and repeatedly violating the Fair Labor Standards Act’s minimum wage and record-keeping provisions.

An investigation led by the Wage and Hour Division’s Dallas District Office found that managers recorded fewer hours in the payroll system than employees actually worked, tipped employees did not take home the required federal minimum wage, and managers did not compensate employees for attendance at mandatory meetings and training.  Cynthia Watson, the Wage and Hour Division's regional administrator in the Southwest, stated: “The Labor Department will hold employers accountable when they do not properly pay their workers and put young employees in danger by allowing them to perform hazardous jobs.”
The consent judgment was filed with the U.S. District Court for the Northern District of Texas, Dallas Division. In addition to requiring back wages and damages, the judgment will enjoin the company from future FLSA violations.

Employees who are covered by the FLSA must receive at least the federal minimum wage of $7.25 for all hours worked. In Florida, the current minimum wage is $7.93. Tipped employees must be paid a cash wage of at least $2.13 per hour, and the cash rate when combined with their tips must total at least $7.25 per hour. Additionally, employers must maintain accurate time and payroll records for all workers.

Do you have a claim for unpaid wages against Cheddar's Causal Cafe?

Mortgage loan officers allowed overtime

WASHINGTON, June 7 (Reuters) - The Obama administration acted within its discretion two years ago when it reclassified mortgage loan officers as eligible for overtime pay, a federal judge has ruled in a case that tested the authority of U.S. labor officials to set overtime rules.

The decision on Wednesday was a loss for mortgage lending companies, which had hoped to invalidate the rule change as they face lawsuits from loan officers for back overtime pay.

The U.S. Labor Department said in 2010 that, based on the typical job duties of mortgage loan officers, they should receive overtime wages. The change restored the status of loan officers to what it had been prior to 2006, when the Bush administration termed loan officers ineligible.

The Mortgage Bankers Association, a lobbying group for banks and other lenders, sued, calling the 2010 change "an abrupt reversal" of a policy that it had come to rely on.

U.S. District Judge Reggie Walton in Washington, D.C., disagreed, ruling that the lenders failed to show that they relied on the 2006 policy in ways that had substantially hurt them.

To the extent that lenders did rely on it, it was "short lived" given that they relied for years until 2006 on the idea that loan officers were eligible for overtime wages, Walton wrote.

Bank of America, JPMorgan Chase & Co and Quicken Loans Inc are among the lenders that have faced claims from loan officers who say they are due back overtime pay.

The Mortgage Bankers Association has not decided whether to appeal the ruling, association lawyer Howard Radzely said on Thursday.

The case is Mortgage Bankers Association v. Hilda Solis, et al., U.S. District Court for the District of Columbia, No. 11-cv-73.

Exempt Employees

Supreme Court to Decide Overtime Fate for Pharmaceutical "Sales Representatives"

 On April 16, the U.S. Supreme Court will hear arguments in an important case under the Fair Labor Standards Act, Christopher v. SmithKline Beecham Corp.  The specific question in the case is whether pharmaceutical sales representatives are eligible to receive overtime pay.  The larger issue is the deference that is owed to the U.S. Department of Labor's interpretation of that statute.  The Fair Labor Standards Act and Department of Labor regulations require, in general, that employers pay 1.5 times an employee's regular hourly rate of pay for each hour worked in excess of 40 hours per week, unless the employee qualifies for an "exemption" from the overtime rules.  One of those exemptions covers "outside salespersons," employees whose primary job duty is to sell products away from their employers' offices. The Christopher case involves the overtime claims of pharmaceutical representatives who are employed by drug manufacturing giant GlaxoSmithKline, but who never received overtime pay despite working significantly more than 40 hours per week. The Glaxo reps visit doctors' offices on "detail calls," and promote Glaxo's products in the hope that doctors will prescribe and that patients will buy those products.  The sticking point is that the reps don't sell any pharmaceuticals to the physicians they visit. In fact, they are barred by federal law from doing so.  So, while at a superficial glance, their work consists of some of the same activities as traditional salespeople, federal regulations actually prohibit them from selling their employer's drugs to doctors or anyone else.  The Department of Labor has weighed in, strongly supporting the reps' position.