Huddle House Lawsuit for Unpaid Wages

Last Updated on June 26, 2017

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At A Glance

This Alert Affects
Anyone who worked as a server or other tipped employee at a Huddle House restaurant owned by Over Easy Management, Inc.
What's Going On?
It has been alleged that Over Easy Management, which owns several franchise locations of Huddle House, failed to pay its servers the federal minimum wage and overtime pay in violation of the Fair Labor Standards Act (FLSA).
Type of Case
Class Action.

Over Easy Management, a franchisee of more than a dozen Huddle House locations throughout Tennessee, Kansas, Oklahoma and Texas, is currently facing a number of class action lawsuits over unpaid wages. According to the lawsuits, these Huddle House franchises failed to pay their servers and other tipped workers the federal minimum wage of $7.25 per hour in violation of the Fair Labor Standards Act (FLSA). The lawsuits also allege that these Huddle House locations automatically deducted a half-hour’s worth of pay from tipped employees’ paychecks for meal breaks, even when workers did not take these breaks or worked through their breaks. As a result, the lawsuits allege that some tipped workers were not paid for all hours worked and, in some cases, did not receive proper overtime pay.

Tipped Employee Rights Under the Fair Labor Standards Act (FLSA)

Under the Fair Labor Standards Act (FLSA), most employees are required to be paid at least the federal minimum wage of $7.25 per hour; however, certain companies in the restaurant industry can take advantage of a “tip credit” and pay their tipped employees (e.g., servers, busboys, bartenders) a minimum wage of $2.13 per hour with the belief that the worker’s tips will bring their hourly wages up to the federal minimum wage. If these tips do not bring their hourly wages up to $7.25, the FLSA requires employers to make up the difference in their workers’ paychecks. When providing a “minimum wage makeup” on a tipped employees’ paycheck, employers are prohibited from claiming that their workers received more tips than they actually did.

Furthermore, the FLSA requires that most employees be paid overtime pay at a rate of one-and-one-half times their typical pay rate for any hours worked in excess of 40 in a single workweek.

What Do the Suits Say These Huddle House Franchises Did Wrong?

The lawsuits allege that these Huddle House franchises violated a number of provisions under the FLSA, including:

  • Failing to pay servers and other tipped workers adequate “minimum wage makeup” to bring their wages up to the federal minimum wage of $7.25 per hour

  • Falsifying servers’ tip records on their paychecks to appear as if they received enough tips to bring their wages above the federal minimum wage

  • Wrongfully deducting a half-hour’s worth of pay from tipped workers’ paychecks in cases where workers did not take bona-fide meal breaks or were required to work through their breaks

  • Failing to provide workers with adequate overtime pay for all hours worked in excess of 40 in a single workweek

In one lawsuit, the plaintiff allegedly received $473.19 in total compensation, including tips and Huddle House’s hourly pay. According to the suit, the plaintiff worked 79 hours during this two-week period. Therefore, her effective hourly pay rate was just $5.98 – well below the federal minimum wage of $7.25 per hour. To appear as if the plaintiff’s hourly wages met or exceeded the federal minimum wage, Huddle House reported that the server received approximately $80 more in tips than she actually did.

Additionally, the lawsuit alleges that, during this pay period, Huddle House deducted one hour’s worth of pay from the plaintiff’s paycheck for two meal breaks. The plaintiff was required to clean and perform other work during her meal break, which means she was working without pay, according to the suit. As a result of these alleged wrongful meal break deductions, the lawsuit claims that Huddle House reduced the total amount of hours the plaintiff worked, which resulted in unpaid overtime.

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