Hall’s Southern Kitchen has agreed to settle a class action lawsuit brought by 33 High Cotton employees who claimed they were underpaid according to the Fair Labor Standards Act.
According to a settlement agreement approved Monday by U.S. District Judge Richard Gergel, Hall’s will pay $150,000 to resolve the litigation. The restaurant group, which also operates Halls Chophouse, SNOB and Rita’s Seaside Grille, continues to deny the allegations contained in the suit filed last year.
Lead plaintiff Jonathan Graham, who in 2015 joined High Cotton’s staff as a server, sued Hall’s Southern Kitchen for requiring tipped employees to contribute to a tip pool, which was shared with silverware polishers and food expediters. A tip pool, which includes employees who do not customarily and regularly receive tips, is considered invalid by the U.S. Department of Labor.
Additionally, Graham alleged that High Cotton employees were required to pay to have their work uniforms “professionally cleaned on a regular basis.”
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Under federal law, if an employer administers an invalid tip pool or requires tipped employees to absorb costs that primarily benefit the employer, such as laundry bills, the employer is barred from claiming a tip credit. In other words, if an employer’s policies are not compatible with the rules governing the federal tipped minimum wage of $2.13 an hour, he or she must pay the hourly minimum wage of $7.25.
By failing to pay that higher rate, Graham argued, High Cotton shorted his wages.
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Of the total amount required by the settlement, $5,000 will be awarded to Graham in recognition of his role as named plaintiff. Another $35,000 will cover the plaintiffs’ legal fees and $110,000 will be divided among the participating employees on a pro rata basis, with payouts ranging from $50 to $14,516.66.
The settlement bars all parties from discussing the agreement.