Michigan Famous Dave’s Franchise Operators Sued Over Alleged Wage and Hour Infractions

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The operators of a number of Michigan Famous Dave’s restaurants have been hit with a proposed collective and class action in which a tipped employee alleges she is not paid lawful minimum and overtime wages.

The plaintiff works for the defendants as a bartender, server, food runner and manager assistant out of their Taylor location, according to the lawsuit. Depending on what work will be performed each shift, the plaintiff, the suit says, clocks in using different job codes, for which she says she’s paid at different rates. More specifically, the plaintiff claims she receives an hourly rate of $5 as a bartender, $3.34 as a server, between $10 and $12 as a manager assistant, and the full minimum wage when working as a food runner.

The lawsuit alleges that despite working upward of 40 hours per week under multiple job codes, the plaintiff is paid overtime wages “based on the hourly rate of a single job code, rather than the weighted average of the hourly rates for each of the codes she worked under” in a given pay period. All told, the defendants’ single-job-code pay structure allowed the companies to pay the plaintiff an overtime rate based on her lower hourly rate as a bartender, rather than at a rate dictated by her time spent working as a managing assistant and bartender.

The suit further argues the defendants are not eligible to pay the plaintiff a reduced minimum wage in part because they failed to provide proper notice of their intention to apply a tip credit against her hourly pay and of the amount they intended to claim. Additionally, the 26-page complaint charges that tipped employees are not allowed to keep all gratuities, particularly for catering events for which the defendants cap the amount of tips they may keep and retain the rest, according to the lawsuit.

Further still, the case alleges tipped employees are required to pay out-of-pocket to cover any cash shortages. From the complaint:

“Defendants’ managers would tell Tipped Employees that their ‘drop’ (meaning the cash they should pay Defendants at the end of their shift) should be ‘x.’ If a Tipped Employee did not have ‘x’ in their bank, they would have to forfeit a portion of their tips to cover this shortage.”

Lastly, the plaintiff alleges she is required to tip out three percent of her gross sales each shift to other employees, including hosts and “to go” workers. When questioned about the defendants’ tip out policy, a manager reportedly responded, “[I]t is what it is,” and stated that tip outs were mandatory each day regardless of how little gratuities they should receive that shift.