Fireman Hospitality Group Settles with NYC Restaurant Workers

What You Don’t Know Can Cost You

Posted on 05-Jul-08 by The Timekeeper

According to two stories in the New York Times, on June 18, Judge Paul A. Crotty of the Federal District Court in Manhattan provisionally approved a $588,000 settlement in a lawsuit against the Redeye Grill in NYC, and said he would soon approve a second settlement of more than $3 million against Cafe Fiorello, Bond 45, Brooklyn Diner, Shelly’s and Trattoria Dell’Arte. All restaurants involved are owned by Fireman Hospitality Group, a prominent Manhattan restaurant owner.

Fireman’s problems began in 2005, when a member of the wait staff at the Redeye Grill filed a complaint with the Restaurant Opportunities Center. Eventually over 200 employees joined the lawsuits. The second settlement will cover over 1,000 claimants, some of whom could receive over $10,000 each, depending on how long they worked at the restaurants.

The employees’ litany of charges against the restaurant group included various violations of wage and hour laws, including erasing hours from employees’ time cards and denying rest breaks; not paying minimum wage, not paying the required three-hours’ pay for shifts canceled at the last minute and not paying overtime; and docking employees’ paychecks if customers walked out without paying or if the employee called in sick.

Another bone of contention was the status of zone headwaiters. The restaurant asserted their zone headwaiters were not managers, and they were therefore allowed to share in the tip pool. Wait staff, however, claimed the headwaiters were managers with the power to hire and fire, which would make it illegal for the restaurant to force wait staff to share their tips with them.

Worse, the restaurants allegedly retaliated against workers who joined the lawsuits or complained: they say they were assigned to less desirable shifts, demoted, or even fired. Judge Crotty even went so far in 2006 as to issue an injunction against the company, ordering them to stop retaliating against their workers. As I’ve noted before, retaliation seldom solves anything. It often leads to even more disgruntled employees — and it may even be illegal.

On the other hand, John Fireman, co-owner of the restaurant group, is quoted as saying, “At our restaurants, the tips are good, and people want to work here.”

Tellingly, though, the proposed settlement reportedly mandates human resources training for all supervisory employees. It calls for setting up grievance procedures that would encourage workers to complain about any perceived discrimination, sexual harassment or wage issues without fear of retaliation. And the restaurant group agrees not to require the workers share tips with “Zone MaÃ®tre Dâ€™s, floor mangers or anybody with supervisory authority.” According to Justin Swartz, a lawyer for the workers, it’s rare in wage and hour cases for a company to agree to this scope of changes.

I know company spokespersons are supposed to put as positive a spin as possible on situations, but there seems to me to be a tremendous disconnect between Mr. Fireman’s comments and the reality of the allegations of the lawsuit, the judge’s 2006 injunction and the 2008 settlements. It appears either he was just putting on a brave face, or he was terribly out of touch with what was going on with his employees.

So, how much do you know about what’s going on with the rank and file at your company? Sometimes what you don’t know can cost you big.

Filed under: Wage and hour lawsuits