‘Profits Over People’: Lawsuit Alleges Cracker Barrel Has Underpaid Tipped Servers

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Cracker Barrel Old Country Store, Inc. faces a proposed collective action over its alleged failure to properly pay servers for non-tipped and off-the-clock work.

According to the 26-page suit, the restaurant has violated the Fair Labor Standards Act (FLSA) by applying a tip credit to servers’ hourly wages despite requiring the workers to spend more than 20 percent of their time on non-tipped duties. The case alleges Cracker Barrel “intensified this scheme” during the COVID-19 pandemic by implementing policies whereby servers were required to spend even more time on untipped side work without being paid appropriately.

“Cracker Barrel is essentially taking advantage of the COVID-19 pandemic to make its servers work more for less money,” the complaint, filed on May 28, scathes.

The lawsuit goes on to claim that Cracker Barrel has failed to provide a timely tip credit notice to tipped employees and instead informed them only that they will be paid less than the minimum wage when they receive their paycheck after their first week of work. Servers have also been deprived of wages for off-the-clock work performed before or after their shifts, the suit says.

According to the case, Cracker Barrel requires servers across its more than 650 restaurants to perform a significant amount of side work that exceeds 20 percent of their time. Per the suit, this precludes the defendant from being permitted to apply a tip credit to workers’ wages given they are unable to earn tips while engaged in these side duties, which include stocking and cleaning refrigerators; tea, soda and coffee stations; the bread toaster and cereal station; condiment shelves; to-go and silverware stands; the juice machine; and the break room and bus carts. Other non-tipped work includes preparing food, washing dishes, keeping assigned tables and sections clean, rolling silverware and performing certain “manager assigned cleaning” duties, the suit says.

The lawsuit claims the amount of side duties to be handled by servers has intensified since the implementation of the Microsoft AX program in 2017. Although the “MAX” program—which replaced earlier software for relaying food orders and improved efficiency by allowing servers to use electronic tablets to “ring in” customers’ orders—included a new position called “server assistant,” Cracker Barrel eliminated the position and required its servers to perform the side-work that would otherwise have been assigned to a server assistant, the case states.

Moreover, the suit claims servers’ untipped duties increased even more with the start of the COVID-19 pandemic in early 2020. While reducing its staff, Cracker Barrel required servers to perform “enhanced sanitizing” of its restaurants, which involved “cleaning or disinfecting almost everything in the restaurant, repeatedly,” the case says. Rather than hire minimum wage employees to perform this non-tipped work, Cracker Barrel assigned it to servers in order to cut down on costs, according to the suit:

The lawsuit goes on to claim that Cracker Barrel has violated another provision of the FLSA by failing to provide timely notice to tipped employees that the restaurant intended to apply a tip credit to their wages. Although a tip credit notice is included in workers’ first paychecks, the case says, the servers begin performing tipped work at least a week before they receive notice of the tip credit, which the suit contends comes “too late.” 

Finally, the lawsuit alleges Cracker Barrel has failed to pay employees for off-the-clock work, including for work performed before and after their shifts and while waiting to be paid tips after they’ve clocked out. Per the suit, workers spend as many as 10 to 45 minutes per shift waiting to be paid their tips.

Even more troubling, the lawsuit says, is Cracker Barrel’s apparent practice of “tak[ing] advantage of minors” by having them clock out when they’ve reached the state limit for the amount of time they are permitted to work while requiring them to continue working. The case claims the defendant applies a similar practice to servers of all ages by automatically clocking them out after a certain amount of time regardless of whether they are working longer than their scheduled shift or a double shift.

“Cracker Barrel does not maintain any records of this unpaid time that servers spend working off-the-clock,” the complaint alleges.

The lawsuit looks to represent all current or former tipped employees who’ve worked at Cracker Barrel Old Country Store restaurants within the past three years.

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