Federal Judge Ends Union Attempt To End Tip Credit In Courts

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A federal judge has effectively put an end to an attempt by a union-backed group to enlist the U.S. justice system in its quest to eliminate tip credit.

The decision came in a lawsuit filed by One Fair Wage, an advocacy group backed by the Service Employees Union International (SEIU), against Darden Restaurants, the parent company of Olive Garden and LongHorn. Steakhouse.

The action alleges that Darden’s zealous use of tip credit – an authorization under federal law and most state rules to count tips in the wages of tip employees – is a violation of anti-tip regulations. discrimination.

One Fair Wage cited data showing that employees of color tend to earn less in tipped Darden positions than their white counterparts.

He also revealed that many servers employed by the state-owned company feel vulnerable to sexual harassment. One Fair Wage argued that tips must support inappropriate customer behavior as it would otherwise jeopardize a portion of their income, and the majority of Darden’s waiters are women.

The research was conducted specifically for the organization.

The group has argued for years that these problems would be alleviated if tip credit was denied and full-service restaurants were required to pay minimum wage directly to waiters instead of subtracting reported tips. That message was hammered home with state and federal lawmakers, and One Fair Wage decided earlier this year to turn to the courts.

The action in the United States District Court for the Northern District of California asks that the federal tip credit be declared illegal and that Darden be ordered to pay damages to One Fair Wage. The group said it was owed to the penalty funds because they spent a lot of money and time fighting Darden’s use of the tip credit.

The lawsuit was brought on behalf of One Fair Wage itself, not any of its members or Darden employees.

It turned out to be the defeat of the action. U.S. District Court Judge Edward Chen agreed with Darden’s contention that One Fair Wage lacked standing to sue because the advocacy group itself had not been discriminated against or threatened. of sexual harassment.

In addition, Chen said the group is in fact seeking to promote a particular ideology, not to repair the practices it has fallen victim to.

“Put simply, OFW does not cite any case law establishing that a non-employee – here, an advocacy organization – has standing to challenge an employment practice,” Chen wrote, using an abbreviation of the complainant’s name. .

He ordered that the action be dismissed.


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