A federal judge in Charleston on Friday approved a $1 million settlement for Hyman’s Seafood employees who sued the restaurant for illegally shorting their wages through an improper tip pool and breakage fees.
The 179 employees who joined the lawsuit will receive amounts ranging from $100 to $39,000, with two of the biggest payouts going to former employees who said they lost their jobs in retaliation.
Defendant Eli Hyman’s attorney, Alice Paylor, said the restaurant owner is “very, very glad to have it behind him.”
Paylor added that restaurant policies have been brought in line with the Fair Labor Standards Act, which Hyman testified he’d never encountered prior to being sued. Throughout the two-year process, Hyman reiterated the violations arose from ignorance, not malice.
“I didn’t know what the federal wage laws were, so how would I even know I was breaking the law?” Hyman said in a September 2015 deposition. “I never even heard of the FLSA.”
In his deposition, Hyman said managers assured him that charging employees to offset the cost of broken dishes was standard industry practice. He also trusted them to handle tip pooling details. “I said 'as long as it’s fair to everybody,' and it seemed like a good idea at a time,” he said.
Because servers were earning between $20 and $40 an hour on average, Hyman said it didn't occur to him they weren't being paid what they were owed by law.
Although Hyman didn’t frequently attend Greater Charleston Restaurant Association meetings for industry updates – “I’m a loner,” he explained – he called its then-Executive Director Kathy Britzius within weeks of being served with the lawsuit.
“I said, ‘I’ve just been served with this tip pool violation, and I think it’s imperative to please warn any restaurants if they are doing this, they need to stop immediately,' ” he said. “I didn’t want my worst enemy to be facing this.”
Hyman also contacted employees, asking them not to join the suit, which he warned would be “disruptive to my business and my home.”
Paylor said the restaurant will weather the settlement and continue to operate as usual.
“It’s still very popular,” Paylor said. “It’s a great tourist destination, and it’s great for Charleston. And Eli is a great guy.”
Marybeth Mullaney, who represented plaintiffs in the case, said she was pleased the complaint was resolved before it reached trial. "Hopefully this outcome shows that workers in the hospitality industry can prevail when employers violate the law," she said.
The ruling came from Senior U.S. District Judge Patrick Michael Duffy.