The U.S. Supreme Court, by refusing to hear a case, has freed servers and bartenders at Applebees to pursue wage complaints against the restaurant chain.The nations highest court on Tuesday declined to take an appeal from Applebees International Inc. in a minimum-wage case involving employees who are classified as tipped workers those who also rely on tips from customers for part of their pay.About 5,500 current and former restaurant employees of Applebees, which is based in Kansas City, have argued that they were underpaid. The decision lets stand an opinion by the 8th U.S. Circuit Court of Appeals and opens the door for a scheduled trial in September in the U.S. District Court of Western Missouri.The case focuses on the U.S. Labor Departments interpretation of the Fair Labor Standards Act, which allows a tip credit for jobs in which workers earn tipped income.The provision allows employers to pay a base wage of $2.13 an hour to workers who receive tips as long as those workers total pay tips included reaches the $7.25 hourly minimum wage required by federal law.The Labor Department has ruled in the past that the tip credit doesnt apply when employees spend more than 20 percent of their time doing assigned duties that dont result in tips. For example, if a restaurant employee is required to come to work and do setup or cleaning before patrons arrive, or if more than one-fifth of the employees work time is assigned to nontipped work, the Labor Department has said the employer may have to pay more than the $2.13-an-hour minimum.Employers argue its too hard to track the time spent on nontipped work. And in practice, workers usually make up the difference and more in tips. In the Applebees lawsuit, the employees contended that their jobs were structured so that they spent more than 20 percent of their time cleaning, taking inventory, stocking serving areas and preparing silverware.In its official response, the company said Tuesday: We respect the Supreme Courts decision today not to intervene at this time in this case and many others. While we do not comment on pending litigation, we will further defend our case in the lower court. The National Restaurant Association and U.S. Chamber of Commerce had backed DineEquity Inc., which operates Applebees restaurants, in appealing to the Supreme Court. They argued that it would be economically ruinous for employers to be required to cover the full minimum wage.DineEquity, based in Glendale, Calif., said in a regulatory filing last year that its officials believe we have meritorious defenses to the lawsuit and didnt estimate any potential loss if the plaintiff employees should win at trial.Tim VanRonzelen of Jefferson City, who was among the lawyers representing the Applebees employees, said that one take-away from the appellate decision was that restaurant operators who take the tip credit should assign duties consistent with earning a tip.If the assigned duties arent consistent with tipped work, VanRonzelen said, employers should pay the full minimum wage required.At the planned bench trial, the plaintiffs intend to seek as-yet-undetermined back wages and damages, he said.Reaction to the case from Kansas City area restaurant operators and servers was varied and pointed out the difficulty of delineating between tip credit work and other duties.Longtime area server Bill Johnson estimated he spends 60 percent of his time actually waiting on customers and 40 percent of his time preparing to wait on customers rolling napkins, polishing silverware and handling other duties that are essential to the restaurants service.Its continual, throughout the day, unless you have a busser to do it, and then they get a percentage of your tips, Johnson said. During one snowstorm last winter, there were no customers for three hours, so I polished glasses.Jason Pryor, owner of Pizza 51 and Pizza 51 West, said a servers pay usually worked out over a shift. But his operations arent full-service, so his staff might make only a couple of dollars in tips per table.Anyone who works in the restaurant industry understands theres a good balance between what they make in tips during their peak times to what they are making over the shift, Pryor said. Customer service is not just setting a plate on the table. It goes from all prep prior to the customer interaction to cleaning up and bussing after they have left.Kevin Lyman, president of Kansas City Originals, a local independent restaurant group, also said that servers work and pay balanced out.So if they come in from 10:30 a.m. to 2 p.m. and spend 30 minutes on prep work, they will still take home at least $60 in tips, not counting their wages of $2.13 an hour, Lyman said.But Bill Teel, incoming president of the Greater Kansas City Chapter of the Missouri Restaurant Association, said it shouldnt be hard to draw a line between tip credit work and work that wouldnt qualify.We absolutely want them to make enough money, Teel said of servers and bartenders. Most restaurants also would want them to do work that is directly related to their job, like keeping their area clean but not mopping floors in the back. In our opinion it is not difficult to differentiate the two.

KansasCity.com

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Supreme Court rebuffs Applebee’s appeal in wage and tip case

Decision allows tip-earning restaurant servers, bartenders to legally challenge the pay rates they receive.

By DIANE STAFFORD and JOYCE SMITH

The Kansas City Star

More News

The U.S. Supreme Court, by refusing to hear a case, has freed servers and bartenders at Applebee’s to pursue wage complaints against the restaurant chain.

The nation’s highest court on Tuesday declined to take an appeal from Applebee’s International Inc. in a minimum-wage case involving employees who are classified as tipped workers — those who also rely on tips from customers for part of their pay.

About 5,500 current and former restaurant employees of Applebee’s, which is based in Kansas City, have argued that they were underpaid.

The decision lets stand an opinion by the 8th U.S. Circuit Court of Appeals and opens the door for a scheduled trial in September in the U.S. District Court of Western Missouri.

The case focuses on the U.S. Labor Department’s interpretation of the Fair Labor Standards Act, which allows a “tip credit” for jobs in which workers earn tipped income.

The provision allows employers to pay a base wage of $2.13 an hour to workers who receive tips as long as those workers’ total pay — tips included — reaches the $7.25 hourly minimum wage required by federal law.

The Labor Department has ruled in the past that the tip credit doesn’t apply when employees spend more than 20 percent of their time doing assigned duties that don’t result in tips.

For example, if a restaurant employee is required to come to work and do setup or cleaning before patrons arrive, or if more than one-fifth of the employee’s work time is assigned to nontipped work, the Labor Department has said the employer may have to pay more than the $2.13-an-hour minimum.

Employers argue it’s too hard to track the time spent on nontipped work. And in practice, workers usually make up the difference and more in tips.

In the Applebee’s lawsuit, the employees contended that their jobs were structured so that they spent more than 20 percent of their time cleaning, taking inventory, stocking serving areas and preparing silverware.

In its official response, the company said Tuesday: “We respect the Supreme Court’s decision today not to intervene at this time in this case and many others. While we do not comment on pending litigation, we will further defend our case in the lower court.”

The National Restaurant Association and U.S. Chamber of Commerce had backed DineEquity Inc., which operates Applebee’s restaurants, in appealing to the Supreme Court. They argued that it would be economically ruinous for employers to be required to cover the full minimum wage.

DineEquity, based in Glendale, Calif., said in a regulatory filing last year that its officials “believe we have meritorious defenses” to the lawsuit and didn’t estimate any potential loss if the plaintiff employees should win at trial.

Tim VanRonzelen of Jefferson City, who was among the lawyers representing the Applebee’s employees, said that one take-away from the appellate decision was that restaurant operators “who take the tip credit should assign duties consistent with earning a tip.”

If the assigned duties aren’t consistent with tipped work, VanRonzelen said, employers should pay the full minimum wage required.

At the planned bench trial, the plaintiffs intend to seek as-yet-undetermined back wages and damages, he said.

Reaction to the case from Kansas City area restaurant operators and servers was varied and pointed out the difficulty of delineating between tip credit work and other duties.

Longtime area server Bill Johnson estimated he spends 60 percent of his time actually waiting on customers and 40 percent of his time preparing to wait on customers — rolling napkins, polishing silverware and handling other duties that are essential to the restaurant’s service.

“It’s continual, throughout the day, unless you have a busser to do it, and then they get a percentage of your tips,” Johnson said. “During one snowstorm last winter, there were no customers for three hours, so I polished glasses.”

Jason Pryor, owner of Pizza 51 and Pizza 51 West, said a server’s pay usually worked out over a shift. But his operations aren’t full-service, so his staff might make only a couple of dollars in tips per table.

“Anyone who works in the restaurant industry understands there’s a good balance between what they make in tips during their peak times to what they are making over the shift,” Pryor said. “Customer service is not just setting a plate on the table. It goes from all prep prior to the customer interaction to cleaning up and bussing after they have left.”

Kevin Lyman, president of Kansas City Originals, a local independent restaurant group, also said that servers’ work and pay balanced out.

“So if they come in from 10:30 a.m. to 2 p.m. and spend 30 minutes on prep work, they will still take home at least $60 in tips, not counting their wages of $2.13 an hour,” Lyman said.

But Bill Teel, incoming president of the Greater Kansas City Chapter of the Missouri Restaurant Association, said it shouldn’t be hard to draw a line between tip credit work and work that wouldn’t qualify.

“We absolutely want them to make enough money,” Teel said of servers and bartenders. “Most restaurants also would want them to do work that is directly related to their job, like keeping their area clean but not mopping floors in the back. In our opinion it is not difficult to differentiate the two.”

To reach Diane Stafford, call 816-234-4359 or send email to stafford@kcstar.com. To reach Joyce Smith, call 816-234-4692 or send email to jsmith@kcstar.com.