Bagatelle Employees to Share Million Dollar Settlement

By Leeds Brown Law | May 31, 2017

Wage Theft Victims Will Share $1.1 Million if Court Approves Settlement

It seems like every day another well-known restaurant in New York City finds itself facing allegations of wage theft. Bagatelle is one of them. In May 2016 former and current employees sued the fancy French bistro in the meatpacking district. In the complaint, workers accused the owners of violating the Fair Labor Standards Act (FLSA) and New York Labor Law. Allegations included misuse of the tip-credit, failure to pay minimum wage and misappropriation of tips. Bagatelle recently offered to settle the lawsuit for over $1 million.

Restaurant Allegedly Violates Tip Credit Rules

The FLSA and NY law allow restaurants to pay food service workers who typically receive tips, such as waiters and waitresses, a cash wage that is lower than the standard minimum wage. Employers are permitted to apply a tip-credit, the amount of which is determined by law, to offset the lower cash payment.

  • To see how this works, let’s pretend for a moment that the law sets the minimum wage for employees across the nation at $10.00 per hour. It sets the minimum wage for a tipped employee at $6.00 per hour. It establishes a tip credit of $4.00 per hour.
  • Under this hypothetical, a restaurant must pay a waiter at least $6.00 per hour in wages and can credit $4.00 worth of tips toward the full minimum wage, bringing the total to $10.00 per hour. If tips fall short, the employer must make up the difference, so the worker is getting at least $10.00 per hour.

To use a tip credit, however, restaurants are bound by certain rules set out by the FLSA. The U.S. Department of Labor (DOL) requires an employer to provide the following information to all tipped employees before the employer may use the FLSA tip credit:

  • “the amount of the cash wage the employer is paying a tipped employee
  • the additional amount claimed by the employer as a tip credit
  • that the tip credit claimed by the employer cannot exceed the amount of tips actually received by the tipped employee
  • that all tips received by the tipped employee are to be retained by the employee except for a valid tip pooling arrangement limited to employees who customarily and regularly receive tips.
  • assurance that the tip credit will not apply unless the employee has notice of these tip credit provisions.”

The DOL allows the employer to give written or oral notice of the information above. Failure to notify an employee of these facts means the business may not use the tip credit. The employer must pay the full hourly minimum wage and allow the employee to retain all of his or her tips.

The workers at Bagatelle allege that the restaurant violated these FLSA notice requirements and that the restaurant’s use of the tip credit, therefore, violated the law. The employees’ lawsuit asks for all of the back wages and tips the restaurant owes them as the result of the violations.

Lawsuit Claims Restaurant Forced Illegal Tip Sharing

Tips belong to the workers who earn them. However, restaurants may require employees to share their tips under very particular circumstances. Tip pooling and tip sharing are permissible only when a given arrangement meets established requirements. For example, in a tip pool, tips may only be distributed to other tipped employees. Owners, managers, and other non-tipped workers may not partake.

Bagatelle’s tipped employees “allege that Bagatelle retained and misappropriated waiters’ tips by requiring them to share tips with tip ineligible employees, such as captains/managers and silver polishers.” If this is true, it would be an invalid arrangement.

Restaurant Agrees to $1.1 Million Wage Theft Settlement

The Chelsea Patch reported on May 23, 2017, a year after employees filed the case, Bagatelle has decided to pay over $1 million to settle the wage theft lawsuit. The settlement, if the court approves it, will result in the distribution of much of the proposed $1.1 million dollars to approximately 100 individuals who are part of the class action.

Bagatelle does not admit any liability in the settlement which still has to be approved by a judge. The restaurant is also currently defending itself in an employment discrimination lawsuit.

Contact Us

If you are one of the thousands of New Yorkers working in a restaurant, you may be worried about tip theft and wage theft. If so, contact Leeds Brown Law, P.C. We can help you, and your co-workers, collect your wages and gratuities when your employer violates your rights.

We have decades of experience helping employees in New York City and the surrounding areas when they face things like unpaid overtime, wage theft, employment discrimination and sexual harassment. Attorneys at Leeds Brown can be reached 24/7 at 1-800-585-4658 so call us today for a free case evaluation.



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