Restaurant Employee Tip Laws That Could Get You Sued

  • Restaurant employee tip laws and pay practices could get you sued.

  • Your legal obligation as a restaurant employer to make a policy and protect against sexual harassment.

Lexington Wolff is a restaurant employment lawyer with quite the story. After representing a number of restaurants in employee lawsuits, she began to see a pattern. Many of the lawsuits could have been easily avoided had the restaurant just been better informed about their obligations.

But as Lexi says, once you’re in a penny, you’re in a pound. Basically, it won’t matter whether or not your practices are legal. If your employees feel slighted or misunderstand a policy, they may take you to court which is costly whether or not you are at fault.

On this episode of the Barron Report, Paul asks Lexi your burning law questions around pay practices and sexual harassment. We start with the discussion of unpaid overtime.

Did you hear about the lawsuit aimed at Jessica Biel’s restaurant, ‘Au, Fudge’? The now defunct restaurant was accused of stealing over $430,000 in tips from their employees and allegedly denying them meal and rest breaks. Though the lawsuit was dismissed, Biel’s team paid nearly $4,000 to file the dismissal. Consider how a restauranteur without fame and fortune would have taken those costs, or if said restaurateur had to pay to actually defend his/her case?

Later we discuss how the #MeToo movement has played out in our industry. With large names like Mario Batali, John Besh, and Todd English seeing their names crumble, it’s important that your restaurant does not get swept up in the wave of allegations. While it is crucial to create a culture that absolutely does not tolerate that type of behavior, it is also important to have a written policy outlining specifically what is and is not allowed and how these types of situations are to be dealt with.

To learn more about how you should legally be running your restaurant, listen in to this episode of The Barron Report. And remember, this podcast does not constitute legal advice. For individualized advice, consult your lawyer.

Show Notes

  • 14:29 - Recent Changes in Tip Pooling Laws
  • 17:53 - Tracking Changes in Policy
  • 20:15 - What is the Legal Bar for Sexual Harassment?
  • 21:42 - From the Courtroom to the Chat Room: Litigation in the social media space
  • 28:25 - Training and Policy are the Building Blocks of Culture
  • 33:05 - Taking Decisive and Effective Action