Suit: Diner staff charged for credit card payments; My opinion Bogus Lawsuit

Suit: Diner staff charged for credit card payments

A woman who worked as a busperson and server for a popular vegetarian restaurant in the Lake View neighborhood filed a federal lawsuit Friday against the restaurant and its owner, claiming that the restaurant violated federal and state minimum wage and overtime laws and charged staff a processing fee on customers' credit card payments. Julia Hendrickson began working as a busperson at the Chicago Diner, 3411 N. Halsted St., in September of 2008, according to the suit, filed in U.S. District Court in Chicago Friday. The suit was filed against the Chicago Diner, Inc., and owner Marshall Hornick. In July of 2009, Hendrickson began working shifts as a server. When she was hired as a server, the suit says, she was paid an hourly rate of $5 per hour. When she began working shifts as a server, she was paid $4.35 an hour. The suit does not say when she left the Chicago Diner or how. About January 17, 2009, the restaurant raised the pay rate of its servers to $4.80 per hour and reduced the pay rate of buspersons earning $5 per hour to $4.80 an hour, retroactive to January 4, 2009, the suit says. On January 4, 2010, the Chicago Diner began charging a credit card processing fee to servers and withholding that fee from servers' paychecks, the suit claims. The suit states that the fee was charged against each server's wages for 100 percent of the servers' tips paid with credit cards regardless of the fact that the restaurant policy required servers to "tip out" an average of 30 percent of their tips to buspersons at the end of their shift. On January 24, Hornick sent an e-mail to the restaurant's tipped employees, stating that the changes the employees saw in their rates of pay were the result of the implementation of new accounting software. Hornick further explained that, in order to offset $1,200 per month in increased payroll expenses the restaurant had incurred in adjusting rates of pay to meet the minimum wage for tipped employees, he had begun deducting the credit card tip processing fee, the suit claims. By implementing that fee, Hornick allegedly explained, Chicago Diner transferred approximately $800 per month in credit card processing fees to the servers. The tipped employees affected by these changes in rates of pay and credit card tip policy, the suit claims, including Hendrickson, were given no notice prior to January 17 of the changes or that those changes were retroactive to Jan. 4. Additionally, tipped employees, including Hendrickson, were regularly required to perform work outside the scope of their tipped occupations, including working for an hour before the restaurant opened and one hour after it closed, performing janitorial tasks. Hendrickson states in the suit she is bringing this action on behalf of herself and all other current and former tipped employees of the Chicago Diner, some of whom, the suit says, may be reluctant to raise individual claims for fear of retaliation. The suit seeks an order declaring the restaurant to be in violation of state and federal labor laws, a judgement for unpaid minimum wages for all time worked, compensatory damages to adjust for the tip-credit, attorneys' fees and other unspecified damages.

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This blog will be used to disseminate information to businesses throughout Florida on the application of the FLSA to employers.

I am a Florida employment lawyer who worked in the restaurant industry for 25 years before going to law school. My law practice is primarily focused on Florida labor law, which includes both State and Federal laws such as the Fair Labor Standards Act.

I have litigated labor issues in Federal and State courts from both the Plaintiff a Defense sides. I have gained important insight into the issues and a greater understanding of the law by doing this. Most lawyers will only argue one side, however, it is my opinion that they will never really understand the depth of the case law if they only prepare one side of the argument(s).

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