Law Firm of Lowell J. Kuvin and Morgan & Morgan File Suit Against NOBU Restaurant in South Beach

The law firm of Lowell J. Kuvin and Morgan & Morgan have filed suit in federal court against NOBU restaurant located in South Beach. The complaint alleges two violation of the Fair Labor Standards Act (“FLSA”) in that NOBU did not properly pay its servers overtime and it allowed managers and kitchen staff to participate in the tip pool. The restaurant has yet to file a response to the claims made by the two former employees.

Restaurants in Florida are allowed to pay employees who receive tips as little as $4.23 — less than the federal and Florida minimum wage of $7.25 per hour.

To apply the so-called tip credit, employers are not permitted to share tips among managers, according to Lowell J. Kuvin, a lawyer for the plaintiffs. The lawsuit asserts that NOBU did just that by sharing tips with floor managers, or floor captains.

“They were basically supplementing managers’ salaries from waiters’ pay,” Mr. Kuvin said. “They’ve created a ridiculous subterfuge, saying, ‘If we call them a floor captain then he’s not a manager.’ It’s a thinly veiled attempt to get around the law.”

The definition of who is properly considered a tipped employee is an interesting one. Along with waiters and bartenders, maître d’s, hosts, sommeliers and busboys are generally considered entitled to share in tips, while a floor manager who simply directs waiters generally is not.

“It’s question of service,” Mr. Kuvin said. “A maître d’ that actually serves you” — even if it means clearing a single plate if the waiter is busy, for example — is entitled to tips, he said.

These are incredibly hard–working waiters,” Mr. Kuvin said. “The standards to get a job at NOBU is pretty high.”

A similar suit was filed against NOBU and two sister restaurants in New York state. That suit was settled before it went to trial for approximately $2.5 million.

Gov. Crist Signs Bill To Limit Slip-Fall Lawsuits

Governor Charlie Crist has signed a bill that will make it harder to win slip-and-fall lawsuits against Florida businesses. The law goes into effect July 1, 2010.

The new law places the burden of proof on the plaintiff; victims will be required to prove a business knew or should have known a dangerous condition had existed for a sufficient time to have it fixed or removed, or that it was a foreseeable hazard.

It will undo a 2001 Florida Supreme Court ruling that removed a similar requirement from state law. That decision came in the case of a woman who slipped and fell in a Publix grocery store on a piece of a banana

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Miami Commissioners Advance New Alcohol Rules

Businesses that intend to serve alcohol past 3 a.m. in most parts of Miami will need to make their case to the city commission.

Owners of bars, nightclubs and other businesses that want to serve liquor after 3 a.m. in most parts of Miami will have to get permission from the Miami City Commission.

With little discussion, four of the five commissioners Thursday tentatively approved a proposed ordinance -- part of a package of zoning revisions as the city commission moves a step closer to enacting Miami 21, the city's new zoning code, in May.

Commissioner Frank Carollo was absent and did not vote on the measure. It will come up for a final vote April 22.

Under the current rules, Miami's zoning board handles all requests from businesses wishing to open an establishment serving liquor in the city.

The new ordinance would work exactly the same way -- unless bars, restaurants, hotels, bottle clubs and private clubs want to serve alcohol after 3 a.m.

But businesses in some parts of Miami -- such as downtown, the Southwest Overtown/Park West and the Omni CRA areas, will not have to get commission approval.

As for Coconut Grove, where the closing time of bars, restaurants, hotels and nightclubs has been a hot topic, the proposed ordinance would not change the 3 a.m. last call for businesses within the central Grove business district.

In June 2008, Commissioner Marc Sarnoff, who represents the Grove, led a successful effort to roll back last call from 5 a.m. to 3 a.m.

The move has split the community.

Patrick Sessions, a chairman of the Coconut Grove Village Council, asked the commission to defer any vote on the measure until the council could get input from residents.

In his opinion, the new measure is a bad idea.

``This ordinance politicizes the approval process for 5 a.m. clubs, which is something we don't need,'' Sessions said.

John El-Masry, the owner of Mr. Moe's Restaurant & Bar, said the 3 a.m. cutoff in the center Grove has been ``devastating.''

``I had 120 employees, now I'm down to 56 employees and my business has gone down 40 percent,'' El-Masry said.

``I'm pleading with you guys for parity. If you make it 3 a.m., make it 3 a.m. for everybody,'' he said.

At least one Grove resident, Nathan Kurland, defended the rollback.

``Our crime is down, our vandalism is down, our noise is down,'' Kurland said.

``Thank you for treating us differently in the Grove.''

After the vote, Commissioner Richard Dunn asked City Attorney Julie Bru how he could implement a 3 a.m. last call in his district, which includes neighborhoods such as Little Haiti, Overtown and Liberty City.

``I know this initiative is not popular,'' Dunn said.

``I don't care. I'm greatly disturbed by the crime in my district.''

BY TANIA VALDEMORO
tvaldemoro@MiamiHerald.com

Miami-Dade Has New Wage Theft Ordinance

Miami-Dade has become the first county in the nation to adopt a countywide wage theft law, and hopefully it will not be the last. The Ordinance, which became effective on March 1, 2010, applies to private sector employees and employers, prohibits wage theft, and provides administrative procedures and private causes of action. An employer found to be in violation of the wage theft Ordinance will be required to pay the actual administrative processing and hearing costs as well as restitution to the employee, which would include back wages owed as well as liquidated damages of double that amount and possibly treble damages.

What this means for employers in Miami-Dade County is that a simple oversight or misunderstanding regarding which employees can be classified as exempt or as independent contractors under the Fair Labor Standards Act ("FLSA"), may now lead to a finding that the employer has committed "wage theft."

According to a report from the Office of Commission Auditor, which accompanied the Ordinance, for the past five years the Southern District of Florida (the federal trial court with jurisdiction over Miami-Dade County) has had a disproportionately high number of FLSA cases filed. Nevertheless, the summary that accompanied the Ordinance reflects the Commission's belief that the requirement for employees to opt-in to a FLSA class action lawsuit hampers their ability to seek remedial action in courts. Thus, the summary states that the Ordinance "is intended to be a tool to root out violations of U.S. labor laws occurring in Miami-Dade County."

According to the Ordinance, a "wage theft violation" occurs when an employer fails to pay any portion of the wages due to an employee, according to the wage rate applicable to the employee, within a reasonable time from the date on which that employee performed the work for which the wages are compensation. The Ordinance defines reasonable time as no later than 14 calendar days from the date the work was performed; however, this time may be modified to no longer than 30 days by an express agreement between the employer and employee that has been reduced to writing and signed by the employee.

The Ordinance defines wage rate as "any form of monetary compensation which the employee agreed to accept in exchange for performing work for the employer, whether daily, hourly, or by piece." Thus, this provision could be interpreted more broadly than the employee's "regular rate" under the FLSA. Once an employee brings a timely claim that wage theft has occurred, the accused employer will have to defend itself before a county-appointed hearing examiner.

The Ordinance does not set out requirements or qualifications a person must possess to be appointed a hearing examiner; thus, it is possible the hearing examiner may not be a judge or attorney or have a background in labor and employment law. The mechanics of the hearing, as set out in the Ordinance, will be like a trial, including discovery in accordance with the Florida Rules of Civil Procedure. Employers will have to be very careful with this process because an employee can choose at any time to stop the proceedings under the Ordinance and file a civil action in State or Federal Court (for violation of state or federal wage/hour laws, which would likely be the basis for the wage theft allegation).

Also, should a hearing examiner find the employer in violation of the wage theft Ordinance, the hearing examiner can award damages of up to three times the amount of the unpaid wages.

Employers' Bottom Line: Employers in Miami-Dade County need to be more vigilant than ever to ensure that employees are properly classified and promptly paid for all work performed. A stringent review of employees currently classified as exempt or as independent contractors, conducted at the direction and supervision of experienced employment law counsel, is recommended to ensure complete compliance with the FLSA.

Employers should also set out in writing when wages will be paid and have the employees sign this written timeline of payments. (Note that the Ordinance only permits the employer to extend the time for payment of wages to up to 30 days from the date the work is performed and then only with the written agreement of the employee.) Additionally, employers will need to review their time keeping polices and make sure that accurate time records are being kept and that all time worked by employees is being recorded. While most employers only keep time records for nonexempt employees, it may be prudent to require exempt employees to do so as well. If a hearing officer determines that an employee is improperly classified as exempt, the employer will have the burden of proving actual time worked. Without accurate records, the employee can estimate the time and the hearing officer will base the wage calculation on that estimated time.

Do I Have The Right To Know Where My Tips Go?

Do I Have The Right To Know Where My Tips Go?

Many hospitality workers rely on tips as their main source of income and restaurants make up the bulk of the employers who hire them. The Fair Labor Standards Act (“FLSA”) allows an employer to pay its employees a reduced hourly wage if they make enough in tips to bring them to the level of minimum wage. The maximum amount of “tip credit” an employer is allowed to take is $3.02/hr.

Many restaurants have policies that servers must share their tips with other employees such as bussers and bartenders. Policies which require mandatory sharing of tips is proper if the person who gets a taste of the server’s tips normally receives at least $30 in tips monthly and whose job description entails contact with the customer.

Becoming more and more popular is the practice of pooling tips for the entire restaurant and then distributing them based on a points system. The idea behind a “pooled restaurant” is that the service will be better since everyone on the floor is participating in the tip the customer leaves. A majority of “pooled restaurants” require that all of the tips (including cash) be deposited with the house so they can be tallied and then distributed, usually at a later date. Some states require that the entire staff must agree to be pooled. Others states such as Florida have no laws whatsoever and employers are free to make the decision without any employee input. But if the house is in charge of the tips, some in cash, how does everyone know there is no funny business going on?

The number one question I get from prospective clients is “Do I have the right to know where my tips go?” My answer is, Yes. However, just because you have that right doesn’t always mean you can exercise it easily. I am not aware of any method, other than a lawsuit, that a tipped employee can use to exercise their right to know.

Sure you could always ask for an accounting from the manager or owner, but without the monthly income reports there would not be any way to verify the amounts were even close to being accurate. It should be easy to verify the credit card tips, but what manager is going to hand over all of the restaurant credit card receipts for you to add them up? And what about the cash tips? I know of several pooled restaurants that only accept cash. Why they do this I am not exactly sure, but I have pretty good idea why (IRS?) and you expect the employees to trust them not to steal from them?

The only idea that I can come up with to solve this problem is an amendment to the laws which regulate the industry and/or the FLSA. If a business such as a restaurant wants to be pooled then make them register with a local or state government agency and pay a yearly fee. The agency can then require the business to inform its employees of the policy in writing and act as an overseer should there be an issue with the distribution of tips.

I plan to put together a group of like minded persons and begin a non-profit lobbying group. The group’s main purpose will be to author and then propose legislation to our local, state, and federal government representatives to secure the rights of hospitality workers throughout the United States. The first area of concern will be the transparency of tip collection and the allocation of those tips in pooled restaurants.

I have spent many hours over the last few weeks trying to come up with a name for the “cause.” Please feel free to suggest a name. You can email me your suggestions to me at lowell at kuvinlaw.com  If your name suggestion is used, you will receive a permanent acknowledgment on the website.

Florida Tops List Of Hot Spots For New FLSA Lawsuits

By Ben James

Law360, New York (February 09, 2010) -- The number of new Fair Labor Standards Act
filings in New York and Texas rose in 2009, but neither state came close to rivaling the
volume of new FLSA cases in Florida. Law360 ranked the five busiest federal courts for
wage-and-hour litigation and found the Sunshine State to be a hotbed of plaintiffs bar
activity.

The U.S. District Court for the Southern District of Florida saw 1,252 new FLSA cases show
up on its docket — either through removal, or the filing of a brand new case — in the 2009
calendar year, according to PACER. The Middle District of Florida wasn't far behind, with 776
new filings.

According to Michael Casey, managing shareholder of EpsteinBeckerGreen's Miami office,
just a handful of plaintiffs firms — including Morgan & Morgan PA, the Pantas Law Firm PA
and The Shavitz Law Firm PA — were responsible for the bulk of FLSA filings in the state.
Some of the suits target large companies, but the majority of Florida's FLSA litigation is
aimed at smaller employers, particularly those in the hospitality industry, according to
Casey.

"I would venture to say that the vast majority of restaurants in Florida are violating the
wage-and-hour law with respect to things like tip credit," Casey said.

Big companies have the resources and wherewithal to put up a big fight when sued, so
Florida's wage-and-hour plaintiffs bar has opted for a "volume approach," which entails
bringing a slew of smaller cases against smaller defendants, he said.

"There are so many hidden pitfalls and technical requirements in the FLSA that the smaller
employers are just unaware of," Casey said. "They lack access to sophisticated advice."
Florida is home to a lot of low-wage, hourly workers, and while many companies have
operations in the state, few have headquarters there, meaning that the workers' compliance
with time-keeping policies may not be closely supervised, added Anne Marie Estevez, a
Miami-based partner with Morgan Lewis & Bockius LLP.

The second-busiest venue for FLSA cases is the U.S. District Court for the Southern District
of New York, which logged 361 new filings in 2009. The U.S. District Court for the Eastern
District of New York came a close third, with 300 new wage-and-hour suits.

New York's four district courts saw a combined 695 new FLSA cases in 2009, up from 547
new suits in 2008 and 388 in 2007.

Lawyers pointed to the New York Labor Law's six-year statute of limitations — double the
three-year statute of limitations for a willful FLSA violation — as one factor behind the rise
of FLSA suits in the state.

Plaintiffs in New York are filing hybrid class and collective actions that are lodged in federal
court under the FLSA but include claims under the state's labor law that permit them to take
advantage of that relatively lengthy statute of limitations, attorneys said.
Restaurants in particular have become a frequent target in those suits, said Orrick
Herrington & Sutcliffe LLP partner Tim Long.

Any state that has wage-and-hour laws that go beyond the FLSA in terms of employee
protections naturally piques the plaintiffs bar's interest, explained Long, adding that New
York has not only about 19.5 million residents, but also plenty of plaintiffs lawyers with class
action expertise.

Though some lawyers argue that opt-in collective actions and opt-out class claims are
inherently incompatible, federal courts in New York have generally been receptive to the
concept of hybrid FLSA/NYLL suits, said Tim Selander, an attorney with Nichols Kaster PLLP,
a firm that represents plaintiffs.

"New York courts have been pretty consistent in saying you can bring an FLSA action with a
Rule 23 state law action," Selander said.

Jackson Lewis LLP partner Paul DeCamp added that cases involving hybrid claims were
starting to make their way up to appeals courts, so some meaningful guidance on those
types of cases might be in the cards.

Another factor in the increased number of wage-and-hour actions in New York's federal
courts is the low number of plaintiffs pursuing cases in state courts relative to their
California brethren, attorneys said. That's due in part to the fact that New York's state law
does not give plaintiffs the option of bringing the plethora of pay practice-related claims that
California's labor law does, Selander said.

With such employee-friendly state laws, plaintiffs in California have little incentive to file
wage-and-hour claims in federal court, Estevez noted.

"Some California lawyers have decided they really don't need the FLSA," she said.
The trend is borne out in the statistics, with the number of new FLSA cases filed in the
Golden State's four federal district courts in 2009 totaling just 298, dipping from 351 the
previous year.

However, when both state and federal wage-and-hour suits are taken into account, Florida
and California are on par with respect to the total volume of cases, lawyers noted.
Rounding out the top five busiest federal courts for wage-and-hour litigation is the U.S.
District Court for the Southern District of Texas, with 231 new filings. Statewide, new FLSA
cases rose to 534 in 2009, up from 348 in 2008.

Estevez said members of the zealous and well-organized plaintiffs bar, which lawyers say is
a major force behind the proliferation of wage-and-hour actions in Florida, had now set their
sights on Texas.

Overall, the number of new FLSA cases in federal courts across the country jumped to 6,165
in 2009, up from 5,227 in 2008, according to PACER.

Some lawyers are skeptical that the dramatic jump in wage-and-hour activity over the past
several years can be maintained in the long term, but they expect to keep seeing high levels
of wage-and-hour filings in the short term.

The FLSA, which was written in the 1930s, has gray areas that companies can potentially
exploit to boost profits at the expense of wages, Selander said.

"As long as those gray areas exist, there are going to continue to be more FLSA cases filed,"
he said.

Undocumented Workers Can Sue Under The FLSA

A federal district judge in Miami has ruled that undocumented aliens working in this country have the same right to file court claims for overtime compensation and liquidated damages under the Fair Labor Standards Act (FLSA) as workers who are in this country legally. Galdames, et al. v. N & D Investment Corp., No. 08-cv-20472-MGC, 21 Fla. L. Weekly Fed. D529a (S.D. Fla. 2008).

Rejecting an employer’s request for summary judgment, United States District Judge Marcia G. Cooke said the employer’s contention that two of its former employees who sued the company “are illegal immigrants and therefore [are] not entitled to FLSA protections” was wrong.

The federal Fair Labor Standards Act requires employers to pay one-and-a-half times the regular hourly pay rate to non-exempt employees for hours worked in excess of 40 in any workweek.
Plaintiffs Jacqueline Galdames and Guillermo Osorio worked for a Miami commercial laundry business called “Mr. Clean Laundry,” where their work duties included washing, drying, pressing, and folding linens and clothing.  They sued their former employer for overtime pay and liquidated damages.

Sushi Chefs CAN Participate in Tip Pool

The DOL found that itamae-sushi chefs and teppanyaki chefs were tipped employees under the FLSA, eligible to participate in employer-mandated tip pools.

Section 3(t) of the FLSA defines tipped employees as “any employee engaged in an occupation in which he/she customarily and regularly receives more than $30 a month in tips.” 29 U.S.C. § 203(t). Section 3(m) allows tip-pooling among employees who customarily and regularly receives tips. 29 U.S.C. § 203(m); see also 29 C.F.R. § 531.54.

Itamae-sushi chefs and teppanyaki chefs have direct contact with customers, at the bar counter area (itamae-sushi chefs) and at customer tables (teppanyaki chefs). In support of its opinion, the DOL cited its “longstanding position that counter persons who serve customers may participate in tip pools. Citing FLSA Field Operations Handbook § 30d04(a); Wage and Hour Opinion Letter 1/25/83 (waiter chef who brings food order from kitchen to table and cooks it on hibachi grill in front of customers may share in tip pooling).


Employers should note that not all chefs and cooks may participate in tip-pooling arrangements. Only those who have regular customer contact may do so. Similarly, servers, bellhops, bus persons, counter persons and service bartenders may participate in tip-pooling arrangements. Dishwashers, for example, cannot participate in tip pools. Employers also should note the variations in state laws regulating tip-pooling arrangements. See, e.g., California Division of Labor Standards Enforcement Opinion Letter dated 9/8/05 (tip pool should include only “those employees who contribute in the chain of the service bargained by the patron,” and should exclude any supervisory employee “with the authority to hire or discharge any employee or supervise, direct, or control the acts of employees”).

OSI Restaurants settles suit for $19M

TAMPA, Fla.  (Dec. 30, 2009) Outback Steakhouse parent company OSI Restaurant Partners LLC has agreed to pay $19 million to settle a class-action lawsuit filed by women claiming that corporate promotions were tainted by sex discrimination.

The Tampa-based restaurant operator said this week that the consent decree with the U.S. Equal Employment Opportunity Commission “includes no finding of fault on the part of Outback.”

The lawsuit was originally filed in September 2006 on behalf of two Colorado women, Rosalind Martinez and Mindy Byers. The suit alleged they were not promoted beyond low-level restaurant management jobs while less qualified men were made “managing partners,” who could share in restaurant profits. Female employees “hit a glass ceiling at Outback and could not get promoted to the higher-level profit-sharing management positions in the restaurants,” the EEOC lawsuit alleged.

The settlement could include numerous female employees at various locations throughout the United States. The Outback Steakhouse chain totals about 971 restaurants, of which 792 are based in the United States. OSI also operates and franchises the Carrabba’s Italian Grill, Bonefish Grill, Fleming’s Prime Steakhouse & Wine Bar and Roy’s Hawaiian Fusion Cuisine brands.

Liz Smith, the new chairman and chief executive of OSI, said in a statement: “I am very pleased the company and the EEOC have resolved this legacy issue. There is no glass ceiling at OSI, and we do not tolerate discrimination in any form.”

The EEOC also claimed women were denied favorable job assignments, particularly kitchen management experience, which was required for employees to be considered for the top management job in the restaurants.

In addition to the $19 million in the four-year consent decree, which was signed by Federal Court Judge Christine M. Arguello, Outback must:

# Institute an online application system for employees interested in managerial and other supervisory positions
# Employ a human resource executive in the new post of vice president of people
# Hire an outside consultant for at least two years to determine compliance with the decree and analyze data from the online application system to determine if women are being provided equal opportunities for promotion
# Report every six months to the EEOC on progress.

OSI said Tuesday that the consent decree “reflects the policies, procedures and systems that were developed by Outback to provide all employees the opportunity to express interest in and be considered for promotions.”

Smith said further: “I have a profound commitment to ensuring not only equal, but very compelling and rewarding employment opportunities for all individuals and I look forward to building on the processes already in place at Outback to ensure we live up to that standard every day.”

The company, which said it decided to settle the lawsuit with funds provided by insurance rather than litigate the case further, said it was “pleased that the EEOC recognizes [OSI’s] electronic registry as an important tool to provide and track equal employment and advancement opportunities for all employees.”

Mary Jo O’Neill, a regional attorney in the EEOC’s Phoenix district, which covers Colorado, said, “We are pleased with the initiatives that Outback has agreed to in this settlement and look forward to seeing its efforts to promote women into management positions realized.”

Rita Byrnes Kittle, a senior trial attorney in the agency’s Denver field office, said, “We are particularly pleased about Outback’s commitment to a new process for employees to apply for promotion online and for hiring managers to make their selections from the online applications. We think this new process will help give women a fair opportunity to advance in the company.”

An administrator will set up a claims process for women who might be eligible for relief in the $19 million pool provided in the consent decree. Letters will be sent to women who worked in corporate Outback restaurants from 2002 to the present and have at least three years with the company.

Stephanie Struble, the EEOC Denver trial attorney who worked with Byrnes Kittle on the case, said, “We encourage women who believe they were discriminated against by Outback to come forward and complete the claims form to obtain monetary relief.”